Greetings!
Last week, we had two CPA tax professionals in our office to talk about the Fiscal Cliff and Tax Planning for the end of 2012. To get copies of the presentation, and to download handouts, please visit our home page: http://www.assetsandincome.com
Because we are bombarded with information every day, we sometimes feel we need to act every day. Given the volatility in the markets, we are prone to making more decisions than we've had to make in the past. Frankly, all this information has not given us any more confidence, just more stress.
Threatening to fall off a Fiscal Cliff makes it even more scary and makes us feel like we should act in big ways, now! The good news is, for our Trend Following investors, they have taken short-term action already. The even better news is, for all investors, that short-term price movements do not determine our long-term retirement success.
Over the short term, stock markets anticipate the economy. Traders place bets before the certainty of the results. A decline began in the markets near the end of September, followed an up trend the that began during the Thanksgiving Holiday week. Trend Following portfolios followed those trends and smoothed the ride for our investors.
Over the long term, the prices of equities right now are very low in comparison to their earnings. We believe it's a good time to be owners of well-run companies. Since the crash, company profits have risen dramatically, and in some cases, risen to all-time highs. Dividends for the SP500 now exceed the yield on 10-year treasuries. People who focus on the long-term will likely make more money than folks worried about short-term performance. |
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You're Invited to a Pre-Party Presentation:
"Conquering Technology"
December 7th, 4PM
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Technology is moving forward at an incredible rate. It impacts how we live, work and play on a daily basis. It's easy to fall behind the technology curve and be forced to rely upon the nearest teenager to solve your smart phone, tablet, computer and Internet dilemmas.
Get the most out of your smart phones, iPads and tablets. A short discussion will cover the basics and then our guest speakers, Chet Bogden of SC Distributors and an Apple Genius, will answer questions about your device.
Afterwards, stay for our Holiday Open House. Please click here to reserve your seat or RSVP to Jane at (303) 690-5070. |
| Weekly Economic Update | |
SPENDING DOWN, CONFIDENCE & GDP UP
Personal spending decreased 0.2% in October, the first monthly retreat since June, possibly attributable to Superstorm Sandy. (Consumer spending dipped 0.3% when adjusted for inflation.) Personal income was flat in October for the first time since April. Even so, November's Conference Board index of consumer confidence measured 73.7, a 57-month high. The Bureau of Economic Analysis revised Q3 GDP up to 2.7%, although federal spending and restocking of goods were the major factors in the quarter's improved output. (1,2)
ANOTHER ROUND OF POSITIVE HOUSING NEWS
New home sales have increased 17.2% in the last 12 months, even with a 0.3% retreat in October. In addition to that news from the Census Bureau, the latest edition of the S&P/Case-Shiller Home Price Index showed home values in the third quarter rising 3.6% from Q3 2011. The National Association of Realtors reported a 5.2% jump in its pending home sales index in October, which at 104.8 reached its highest point since March 2007. (3,4,5)
BUSINESSES KEEP PURCHASING AS CLIFF NEARS
Durable goods orders were flat in October, but they rose 1.5% minus transportation orders. Increasing orders for electrical components (+4.1%), computers (+0.9%) and machinery (+2.9%) showed confidence on the part of companies. (6)
NEGOTIATIONS STALL, BUT STOCKS ADVANCE
Even with very little progress in the fiscal cliff talks in Washington, the S&P 500 managed a 0.50% gain last week to reach 1,416.25 at the closing bell on Friday. The NASDAQ (+1.46% to 3,010.24) and Dow (+0.12% to 13,025.04) also advanced last week. The NASDAQ and S&P respectively gained 1.11% and 0.29% in November; the DJIA, on the other hand, slipped 0.55% on the month. Gold closed Friday at $1,710.90; oil settled Friday at $88.91.(7,8,9) |
| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+6.61 |
+8.13 |
-0.52 | |
NASDAQ |
+15.55 |
+14.88 |
+2.63 | |
S&P 500 |
+12.62 |
+13.58 |
-0.88 |
(Source: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov -11/30/12). Past performance is no guarantee of future results. Indices are unmanaged, and investors cannot invest in them directly. |
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Create a beautiful week!
Karl Frank, MBA, MSF
Certified Financial Planner (R)
A & I Financial Services LLC
303.690.5070
Citations:
1 - www.foxbusiness.com/economy/2012/11/30/consumer-
spending-makes-unexpected-fall-in-october/ [11/30/12]
2 - www.reuters.com/article/2012/11/27/us-usa-economy-instant-
idUSBRE8AQ0SP20121127 [11/27/12]
3 - www.latimes.com/business/la-fi-mo-new-home-sales-201211
28,0,3039964.story [11/28/12]
4 - blogs.wsj.com/economics/2012/11/27/price-rise-shows-a-better-
balanced-u-s-housing-market/ [11/27/12]
5 - www.philly.com/philly/business/20121130_Pending_home_
sales_in_Oct__hit_nearly_6-year_high.html [11/30/12]
6 - news.investors.com/economy/112712-634800-fiscal-cliff-fears-dont-sink-durable-goods-confidence.htm [11/27/12]
7 - www.cnbc.com/id/50025105 [11/30/12]
8 - online.wsj.com/article/BT-CO-20121130-711977.html [11/30/12]
9 - montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [11/30/12]
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 |
"It's not what happens to you that determines how far you will go in life; it is how you handle what happens to you."
Zig Ziglar |
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iddle of the Week
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Liz went into a convenience store at 1:58am on a Sunday morning to get a coffee. She drove six miles away and then returned to the store to get a lotto ticket ... also at 1:58am. The store's clock was working perfectly, so how could it be 1:58am again when she returned?
Last week's riddle:
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 answer:
He slipped off the escalator's bottom step. |
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