Greetings!
This week, the world's markets are focused on Cyprus and its financial woes. If you haven't heard of Cyprus, you must not be a money launderer.
Let's go up to the highest levels and put the Cyprus problem in perspective.
All of the government spending less expenses plus
All of the private sector spending less expenses plus
All of the foreign spending less foreign expenses equals ZERO.
G + P + F = 0
This simple formula creates the most profound ramifications. From our USA perspective, if the federal government spends more than it brings in, it either increases the wealth of the private sector or the foreign sector:
G (down) + P (up) + F (up) = 0
It has to be that way, by definition. From a Cyprus perspective, they've reached a point where the G (down) is too great and now the F (foreign) European Union must flood them with billions of Euros to keep them afloat.
If the European Central Bank (ECB) creates Euros, as they are keen to do, then P and F benefit, the private and the foreign accounts grow in size. Remember, to Europe, we are a key "F" foreign country.
Keeping perspective on these events helps keep both our minds, and our investments, sane and safe. Next week, we'll look at another application of this very powerful, simple, and profound formula.
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| Lunch and Learn: Behavioral Portfolio Management |
How does investor behavior affect portfolio management?
A & I Financial Services is pleased to introduce you to a leader in Behavioral Portfolio Management research. Please join us for lunch and conversation with Dr. Tom Howard Ph.D., who will share his insights on this topic.
Dr. Howard will discuss the practical application of behavioral factors in constructing and managing portfolios. These include asset allocation, investment selection, and tactical management.
Let us know if you are interested in attending lunch or receiving a complimentary portfolio analysis.
Behavioral Portfolio Management Luncheon
Tom Howard Ph.D. - University of Denver, CEO and Director of Research AthenaInvest
Date: Wednesday, March 20, 2013
12:00 pm to 1:00 pm
Location: A & I Financial Services
9800 Mt. Pyramid Ct., Suite 450
Englewood, CO 80112
Lunch will be provided.
or call 303-690-5070
Please RSVP by Monday, March 18th. Seating is limited.
Friends and colleagues are welcome to attend!
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| Weekly Economic Update | |
RETAILERS RECEIVE A MAJOR BOOST
Higher payroll taxes don't seem to have hurt shopping or driving: the Commerce Department noted a 1.1% improvement in retail sales for February. As gas station receipts increased 5.0% and auto sales 1.1% last month, there was also a 0.4% gain in core retail sales and a 0.5% rise in department store and discount store sales.1
NO SURPRISE: HIGHER GAS PRICES PROMPT CPI GAIN
February's 0.7% gain in the Consumer Price Index was heavily influenced by the rising cost of fuel - minus food and energy costs, the core CPI rose just 0.2%. The Labor Department also reported a 0.7% rise in the Producer Price Index last month, compared with 0.2% for January.2,3
MORTGAGE RATES HIT A 7-MONTH PEAK
In its March 14 national survey, Freddie Mac estimated the average interest rate on a conventional 30-year home loan at 3.63% (the highest since August). Average rates for 15-year fixed mortgages were at 2.79%.4
HOUSEHOLD CONFIDENCE FLAGS
The University of Michigan's preliminary March survey of consumer sentiment fell to 71.8, down 5.8 points from its final February mark. This was the lowest reading since December 2011.2
DOW LOGS FOURTH STRAIGHT WEEKLY ADVANCE
The DJIA rose 0.81% from March 11-15, settling Friday at 14,514.11. (A down Friday broke a 10-day winning streak for the index.) The S&P 500 (+0.61% to 1,560.70) posted its third straight weekly gain, as did the NASDAQ (+0.14% to 3,249.07). Gold settled Friday at $1,591.30 on the COMEX, oil at $93.58 on the NYMEX.5,6
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| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+10.76 |
+9.52 |
+4.29 | |
NASDAQ |
+7.60 |
+6.30 |
+9.37 | |
S&P 500 |
+9.43 |
+11.27 |
+4.23 |
(Source: cnbc.com, usatoday.com, treasury.gov, treasurydirect.gov -03/15/13). 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.csmonitor.com/Business/2013/0313/Retail-sales-rise.-
Shoppers-unfazed-by-payroll-tax-hike [3/13/13]
2 - www.nytimes.com/2013/03/16/business/economy/consumer-inflation-jumps.html [3/15/13]
3 - www.nasdaq.com/article/stock-market-news-for-march-15-
2013-market-news-cm227573#.UUOIDVdXqXk [3/15/13]
4 - www.usatoday.com/story/money/business/2013/03/14/30-year-fixed-mortgage-rates/1987243/ [3/14/13]
5 - www.cnbc.com/id/100557676 [3/15/13]
6 - online.wsj.com/mdc/public/page/mdc_commodities.html [3/15/13]
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 |
"Every choice you make has an end result."
Zig Ziglar
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Riddle of the Week
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The 22nd and 24th U.S. presidents had the exact same parents - and yet, the 22nd and 24th U.S. presidents were not siblings. Why?
Last week's riddle:
You can't outrun it or hide from it. You only notice it when there is light, but it shows only darkness. What is it?
Last week's answer:
Your shadow. |
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