A&I Financial Services Periscope

A & I Financial Services LLC Newsletter

For the Week of
November 28, 2012
 
Greetings!  
 
"The greater the scientific advance, the more primitive the fear."

 Don DeLillo, White Noise

 

Have you ever caught yourself saying anything like this?

 

"I know I should be listening but none of this makes sense to me anymore. It all sounds the same: The market will recover, hang in there, rely on stocks for the long run. I don't know if I can stay in it for the long run. I can't sleep at night. I'm scared. What if I can't take care of my family or fund my kid's college education? What if we can't retire?"

 

After many years of rocky markets, we are swamped with white noise.  We receive more information than we can process, and we are paying a price for it.  

 

In the emerging field of neuroeconomics, scientists use insights from the fields of neuroscience and economics to study and explain our behaviors. They found that we feel pain 2 1/2 times as much as we feel pleasure. In other words, it hurts to lose money.  We process the pleasure of investment gains in the frontal lobe. However, we process investment losses in the limbic system. Investment losses trigger our primeval fight or flight behavior.  

 

If you want to express your worries, share the investment insight you've recently learned, or talk about a Don DeLillo novel, give us a call. We're here for you! 

 
Weekly Economic Update 

 
MORE GOOD NEWS FROM THE HOUSING MARKET  Existing home sales rose 2.1% in October, according to the National Association of Realtors. NAR noted a 10.9% annual gain in the sales pace and an 11.1% year-over-year rise in the median sale price to $178,600. The National Association of Home Builders (NAHB) Housing Market Index came in at 46 for November, a six-and-a-half year peak. Housing starts increased 3.6% in October to a five-year high. (1,2)
   
DID CONSUMER SENTIMENT IMPROVE THIS MONTH?
The University of Michigan's bellwether consumer sentiment survey came in at a final mark of 82.7 for November, up 0.1 point from the final October reading. The index's preliminary November reading had been 84.9. (3)
    
WILL HOLIDAY SHOPPING SURPASS FORECASTS?
The National Retail Federation projects 5 million fewer Black Friday weekend shoppers this year, but also a 4.1% annual gain in holiday retail sales. A Reuters survey showed that 21% of shoppers think they will spend less this holiday season, while 11% think they will spend more.(4) 
 
CHEAPEST HOME LOANS IN DECADES
With a helping hand from QE3, the average interest rate on the 30-year FRM fell to 3.34%, a new record low, in Freddie Mac's November 20 Primary Mortgage Market Survey. A year ago, interest rates on these loans were hovering near 4%.(2)
  
DOW CLOSES ABOVE 13,000
Congress took its Thanksgiving recess last week, and no discouraging news on the fiscal cliff talks amounted to relatively good news for Wall Street. The Dow (+3.35% to 13,009.68), S&P 500 (+3.62% to 1,409.15) and NASDAQ (+3.99% to 2,966.85) all advanced across three-and-a-half trading days. Gold settled Friday at $1,751.80 an ounce, oil at $88.36 a barrel.(5,6,7)

Market Summary

% Change

Y-T-D

1Yr Chg

5-Year Avg

DJIA

+6.48

+15.56

+0.04

NASDAQ

+13.88

+20.60

+2.85

S&P 500

+12.05

+21.29

-0.44

(Source: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov -11/23/12).  Past performance is no guarantee of future results.  Indices are unmanaged, and investors cannot invest in them directly
Create a beautiful week!

Karl Frank, MBA, MSF
Certified Financial Planner (R)
A & I Financial Services LLC
303.690.5070  
 
Citations:   

 

1 - www.latimes.com/business/money/la-fi-mo-existing-home-

sales-homebuilder-confidence-20121119,0,207630.story [11/19/12]
2 - abcnews.go.com/blogs/business/2012/11/housing-starts-

surged-3-6-pct-in-october/ [11/20/12]
3 - www.latimes.com/business/money/la-fi-mo-economy

-consumer-20121121,0,596839.story [11/21/12]
4 - www.reuters.com/article/2012/11/23/usa-retail-holiday-

blackfriday-idUSL1E8MN0D220121123 [11/23/12]
5 - www.thestreet.com/story/11774464/1/stock-market-story-

nov-23.html [11/23/12]
6 - http://www.cnbc.com/id/49938926 [11/23/12]
7 - montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [11/23/12]  

 

Securities offered through Geneos Wealth Management, Inc., member FINRA/SIPC.  Investment advisory services offered through A & I Financial Services LLC, registered investment advisor.

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Words for Thought

"An inventor is simply a fellow who doesn't take his education too seriously."
    
Charles Kettering

Karl Frank is Featured in the June 2012 edition of The Journal of Financial Planning

 

Click Here to Read "Leadership in Action"  Article 

 

Riddle of the Week

 

Ray slipped off of a 30-foot escalator and landed on a sidewalk. He was embarrassed, yet uninjured. How could this be?  

 

  Last week's riddle:

  

Rhyming Riddle: My first is twice in apple but not once in tart. My second is in liver but not in heart. My third is in giant and also in ghost. Whole I'm best when I am roast. What am I?
 

       

    Last week's answer:
 
A pig.