Archive for July, 2012

Higher Highs and Higher Lows – Part 2

Tuesday, July 31st, 2012

S&P 500 Index

A couple weeks ago, I had a graph on the blog here that included an explanation that as long as we continued to see a pattern of higher highs and higher lows on the chart, I’d continue to be constructive on the market which was trading at 1,350 at that time.

You can see on the graph above that the pattern has continued and we now stand at 1,379, or a couple of percent higher on the index. I’d expect that we will see the pattern continue and the market pull back a bit – and what we want to see a new higher low that leads to a new higher high. The obvious question is “will we”?

Earnings have been mediocre so far this earnings season. Even when a company comes out and says that it had the biggest quarter ever (Caterpillar said that a few days ago) many in the market won’t believe it. CAT actually ended down that day in spite of having its best financial performance in its existence. My guess is that this negativity in the face of positive news will lead to some profit taking.

The Fed and the European Central Bank probably will not institute any sort of stimulus this week, which is what many have been anticipating. My guess is that this disappointment will lead to some profit taking.

But, on the positive side of things, there was news out of Washington DC today that there may be a deal in the works to extend everything that comprises the January 1st fiscal cliff to March 31, 2013, so that there is more time post-election to work on a solution. This sort of cooperation between the usually recalcitrant pol’s is good news that should make any profit taking subdued – no one wants to be out of the market if one of the major headwinds to further profits is being addressed, if even temporarily.

So, at this point, I am happy staying the course and letting the pattern develop. We have sold a few lower rated (according to our analytical system) holdings here at the top of this most recent higher high, and plan to reinvest the proceeds as we work to form the next higher low. But, all-in-all, we are staying fully invested other than these timing issues.

Click Here for Today\'s Video on YouTube


Fracking Kerfuffle Debunked (Yes, those are real words)

Tuesday, July 31st, 2012

Ultra Petroleum

The EPA has finally ruled on whether fracking harms ground water and their answer is “No” it does not.

This should be very good for some of our energy investments – just look at the chart of Ultra Petroleum above.

Many people saw the documentary Gasland that started the whole controversy, and put downward pressure on the prices of many domestic energy companies who were perceived to be harming the ground water with their energy production.

The EPA got involved and analyzed the situation, performed tests and issued a report (see below) that showed the problems in the Pennsylvania community featured in the movie are not caused by fracking.

Fracking is a process where natural gas is extracted from shale beds by pressurized water being used to fracture the shale beds. You can find a video on YouTube about fracking in North Dakota here. Obviously it will be a bit biased given its source, but you’ll get a sense of what fracking is about if you want further information.

Here is the reprint of the EPA report ( or you can go to their website here to see the original):

EPA Completes Drinking Water Sampling in Dimock, Pa.

Release Date: 07/25/2012
Contact Information: Terri White (215) 814-5567

PHILADELPHIA (July 25, 2012) – The U.S. Environmental Protection Agency announced today that it has completed its sampling of private drinking water wells in Dimock, Pa. Data previously supplied to the agency by residents, the Pennsylvania Department of Environmental Protection and Cabot Oil and Gas Exploration had indicated the potential for elevated levels of water contaminants in wells, and following requests by residents EPA took steps to sample water in the area to ensure there were not elevated levels of contaminants. Based on the outcome of that sampling, EPA has determined that there are not levels of contaminants present that would require additional action by the Agency.

“Our goal was to provide the Dimock community with complete and reliable information about the presence of contaminants in their drinking water and to determine whether further action was warranted to protect public health,” said EPA Regional Administrator Shawn M. Garvin. “The sampling and an evaluation of the particular circumstances at each home did not indicate levels of contaminants that would give EPA reason to take further action. Throughout EPA’s work in Dimock, the Agency has used the best available scientific data to provide clarity to Dimock residents and address their concerns about the safety of their drinking water.”

EPA visited Dimock, Pa. in late 2011, surveyed residents regarding their private wells and reviewed hundreds of pages of drinking water data supplied to the agency by Dimock residents, the Pennsylvania Department of Environmental Protection and Cabot. Because data for some homes showed elevated contaminant levels and several residents expressed concern about their drinking water, EPA determined that well sampling was necessary to gather additional data and evaluate whether residents had access to safe drinking water.

Between January and June 2012, EPA sampled private drinking water wells serving 64 homes, including two rounds of sampling at four wells where EPA was delivering temporary water supplies as a precautionary step in response to prior data indicating the well water contained levels of contaminants that pose a health concern. At one of those wells EPA did find an elevated level of manganese in untreated well water. The two residences serviced by the well each have water treatment systems that can reduce manganese to levels that do not present a health concern.

As a result of the two rounds of sampling at these four wells, EPA has determined that it is no longer necessary to provide residents with alternative water. EPA is working with residents on the schedule to disconnect the alternate water sources provided by EPA.

Overall during the sampling in Dimock, EPA found hazardous substances, specifically arsenic, barium or manganese, all of which are also naturally occurring substances, in well water at five homes at levels that could present a health concern. In all cases the residents have now or will have their own treatment systems that can reduce concentrations of those hazardous substances to acceptable levels at the tap. EPA has provided the residents with all of their sampling results and has no further plans to conduct additional drinking water sampling in Dimock.

Whatever your feelings on this issue, whether you believe the EPA or not (and I’ll bet you that many of the folks in that Pennsylvania community do not believe them,) this is definitely good news for domestic energy production and domestic energy independence….and the companies, like UPL, that produce energy domestically.


Glossary of Investment Terms

Monday, July 30th, 2012

Glossary of Investment Terms

You participate in a 401(k) retirement savings plan by deferring part of your salary into an account set up in your name. Any earnings in the account are federal income tax deferred.

If you change jobs, 401(k) plans are portable, which means that you can move your accumulated assets to a new employer’s plan, if the plan allows transfers, or to a rollover IRA. With a traditional 401(k), you defer pretax income, which reduces the income tax you owe in the year you made the contribution. You pay tax on all withdrawals at your regular rate.

With the newer Roth 401(k), which is offered in some but not all plans, you contribute after-tax income. Earnings accumulate tax deferred, but your withdrawals are completely tax free if your account has been open at least five years and you’re at least 59 1/2.

In either type of 401(k), you can defer up to the federal cap, plus an annual catch-up contribution if you’re 50 or older. However, you may be able to contribute less than the cap if you’re a highly compensated employee or if your employer limits contributions to a percentage of your salary.

Your employer may match some or all of your contributions, based on the terms of the plan you participate in, but matching isn’t required. With a 401(k), you are responsible for making your own investment decisions by choosing from among investment alternatives offered by the plan. Those alternatives typically include separate accounts, mutual funds, annuities, fixed-income investments, and sometimes company stock.

You may owe an additional 10% federal tax penalty if you withdraw from a 401(k) before you reach 59 1/2. You must begin to take minimum required distributions by April 1 of the year following the year you turn 70 1/2 unless you’re still working. But if you prefer, you can roll over your traditional 401(k) assets into a traditional IRA and your Roth 401(k) assets into a Roth IRA.

Active Management
The process of hand selecting securities with the purpose of trying to outperform a benchmark index. Active portfolio managers use economic data, investment research, market forecasts, and other indicators to help make investment decisions.

Annual Percentage Yield

Annual Percentage Yield (APY) is the effective annual rate of return taking into account the effect of compounding interest. The quoted rate assumes that the funds will remain in the investment for a full year (365 days). While similar to an APR (Annual Percentage Rate) it allows you to standardize different types of rates into an annualized percentage rate number.

Asset Allocation
Asset allocation is a strategy, advocated by modern portfolio theory, for reducing risk in your investment portfolio in order to maximize return. Specifically, asset allocation means dividing your assets among different broad categories of investments, called asset classes.
Stock, bonds, and cash are examples of asset classes, as are real estate and derivatives such as options and futures contracts. Most financial services firms suggest particular asset allocations for specific groups of clients and fine-tune those allocations for individual investors.

The asset allocation model — specifically the percentages of your investment principal allocated to each investment category you’re using — that’s appropriate for you at any given time depends on many factors, such as the goals you’re investing to achieve, how much time you have to invest, your tolerance for risk, the direction of interest rates, and the market outlook.

Asset Class
Refers to the categorization of an asset. Representative asset classes include stocks, bonds, commodities, etc.

Basis Point
Measurement used to quote bonds. One basis point is equal to 0.01%, or one one-hundredth of one percent. 100 basis points is equal to 1%, whereas 50 basis points would equal one half percent, or 0.50%.

A standard index used for measuring the performance of an investment. The goal of most money managers and investors is to outperform their respective benchmark.

A beneficiary is the person or organization who receives assets that are held in your name in a retirement plan after your death. If you have established a trust, the beneficiary you name receives the assets of the trust. A retirement plan, such as an IRA or 401(k), pays your beneficiary the value of the accumulated assets or requires the beneficiary to withdraw assets either as a lump sum or over a period of time, depending on the plan.

Some retirement plans require that you name your spouse as beneficiary or obtain written permission to name someone else. You may name any person or institution — or several people and institutions — as beneficiary or contingent beneficiary of a trust, a retirement plan, annuity contract, or life insurance policy. A contingent beneficiary is one who inherits the assets if the primary beneficiary has died or chooses not to accept them.

A debt instrument issued by corporations and governments to raise capital. Interest on the outstanding debt is paid to bondholders at specific intervals, with the principal amount of the loan paid on the bond maturity date.

Closed-End Fund
Closed-end mutual funds are actively managed funds that raise capital only once, by issuing a fixed number of shares. Like other mutual funds, however, fund managers buy and sell individual investments in keeping with their investment objectives. The shares are traded on an exchange and their prices fluctuate throughout the trading day, based on supply, demand, and the changing values of their underlying holdings.

Goods that are essentially uniform across producers. Typical examples include grains, beef, oil and natural gas. Products like textiles and electronics will vary in quality, but commodities are essentially interchangeable.

Generating earnings from previous earnings by reinvesting earnings in the original investment vehicle.

A statistical measure of how two securities move in relation to one another. The correlation coefficient, or indicator of related movement, ranges from 1 to -1. A correlation coefficient of 1 indicates the securities move exactly the same way at the same time, and -1 means they move exactly opposite. A correlation coefficient of 0 indicates the securities’ movement is not related at all. Extreme 1 and -1 correlation coefficients are rare.

Interest rate on a debt security the issuer promises to pay to the holder until maturity, expressed as an annual percentage of face value.

CUSIP Number
Identifying all stocks and registered bonds, using the Committee on Uniform Securities Identification Procedures (CUSIP). Brokers use a security’s CUSIP number to get further information.

Distribution Yield (TTM)
The trailing 12-month’s income distributions divided by the sum by the last month’s ending NAV, plus any capital gains distributed over the same period, is the distribution yield (TTM).

A risk management technique involving mixing a variety of investments within a portfolio. The theory suggests that a diversified portfolio will, on average, pose a lower risk and yield higher returns than any individual investment in the portfolio.

A distribution of earnings to shareholders, prorated by class of security and most commonly paid in the form of cash or stock. The amount is decided by the board of directors and is usually paid quarterly. Dividends must be declared in the year they are received.

Dividend Yield
The distribution rate of a fund calculated by dividing the amount of the dividends per share by the per share market price of the fund. For example, a fund price of $20 that pays a $2 dividend per year has a 10% dividend yield.

Dollar-Cost Averaging
Method of accumulating assets by investing a fixed amount of dollars in securities at set intervals.

Emerging Market
Refers to the financial market or economy of a developing nation, which is often new or has a short history.

Equity is another word for stock or any security representing an ownership interest.

Exchange-Traded Fund

ETFs are an emerging class of low-cost index funds that trade like stocks. Inexpensive, tax-efficient, and flexible, they offer investors instantaneous exposure to local or global indexes via a single trade. Sometimes referred to as “tracking stocks.”

Expense Ratio
The expense ratio includes investment management administrative costs and 12b-1 fees. The expense ratio does not include the cost of acquiring a fund, such as commissions and loads.

Foreign Stock
Stock issued from a corporation organized under the laws of a foreign country. Tax statement provided to customers at the end of the year for use in tax preparation.

Global Fund
A type of mutual fund, closed-end fund, or ETF designed to give exposure to any international or emerging market, including the United States.

Gold Fund
A type of mutual fund or ETF designed to give exposure to gold related securities. This can include stocks in companies engaged in the production, processing, or mining of gold. Often used to hedge against inflation and currency risks.

Gross Expense Ratio
The gross expense ratio of a fund is calculated by dividing the total gross expenses (net expenses with waivers added back in) by the fund’s average net assets. If it is not equal to the net expense ratio, the gross expense ratio portrays the fund’s expenses had the fund not waived a portion, or all, of its fees. Thus, to some degree, it is an indication of fee contracts.

Growth and Income Fund
A mutual fund, closed end fund, or ETF with both the growth of capital and income as the primary investment objective.

Growth Fund
A mutual fund, closed end fund, or ETF with the growth of capital as the primary investment objective.

High-Yield Bonds
Bond that has a rating of BB or lower and that pays a higher yield to compensate for its greater risk.

Income Fund
A mutual fund, closed-end fund, or ETF that has generating income as the primary investment objective. Income can be derived from various sources, including interest, dividends and capital gains.

A statistical measure used to track the aggregate performance of stock, bond, and commodities markets. Widely followed indexes include those developed and managed by Standard & Poor’s, Russell, and Dow Jones.

Index Fund
A mutual fund or ETF that seeks to match the exact performance of a specific market or benchmark index. Index funds are sometimes referred to as passive funds, and are popular for their tax efficiency and low fees. Popular index funds include those that track the S&P, Russell, and Dow Jones indices.

The rate at which the general level of prices for goods and services rises. Increasing prices lead to decreasing buying power.

Investment Expenses
Investment expenses are expenses connected with the production of investment income, such as amounts paid for management of securities. Investment expenses do not include investment interest expense, or any expenses associated with a passive activity.

Investment Grade
Bonds whose issuers are rated AAA to BBB by Standard & Poor’s or Moody’s Investors Service for safety and ability to repay principal.

Investment Style
Indicates the approach of an investment manager in selecting securities. For example, a certain manager may be value oriented, whereas another may emphasize growth.

Large Cap
Refers to companies with a market capitalization over $5 billion.

Using borrowed capital, such as margin, to increase the potential return of an investment while also increasing the potential risk. In real estate terms, leverage is the amount of debt used to finance assets and operations. A company with greater debt than equity is known as being “highly leveraged”.

Lipper, Inc.
Lipper provides financial data and performance analysis for more than 30,000 open- and closed-end mutual funds and variable annuities worldwide. The company evaluates funds on the strength of their success in meeting their investment objectives and identifies the strongest funds in specific categories as Lipper Leaders. The research company’s mutual fund indexes are considered benchmarks for the various categories of funds

Market Capitalization
Market capitalization is calculated by taking the total shares outstanding multiplied by the current market price of one share. This value is used when designing a portfolio strategy as a basis for risk/return and asset allocation parameters.

Mid Cap
Refers to companies with a market capitalization between $1 billion and $5 billion.

Money Market
A mutual fund that sells its shares to purchase short-term securities. Income from the purchase is distributed among fund shareholders, often via additional shares in the fund.

Morgan Stanley Capital International, Inc.
Morgan Stanley Capital International, Inc. (MSCI) distributes index and company-level data and also licenses the MSCI indexes to third parties for the purposes of creating mutual funds, listed and OTC derivatives, exchange-traded funds, research and proprietary products.

Morningstar Ratings Summary
Morningstar rates mutual funds from one to five stars based on how well they’ve performed (after adjusting for risk and accounting for sales charges) in comparison to similar funds.
Within each Morningstar category, the top 10% of funds receive five stars and the bottom 10% receive one star. Funds are rated for three-, five-, and 10-year periods, and these ratings are combined to produce an overall rating. Funds with less than three years of history are not rated.

Ratings are objective, based entirely on a mathematical evaluation of past performance. They’re a useful tool for identifying funds worthy of further research, but shouldn’t be considered buy or sell signals.

Mutual Fund
A mutual fund is a professionally managed investment product that sells shares to investors and pools the capital it raises to purchase investments.

A fund typically buys a diversified portfolio of stock, bonds, and money market securities, or a combination of stock and bonds, depending on the investment objectives of the fund. Mutual funds may also hold other investments, such as derivatives.

A fund that makes a continuous offering of its shares to the public and will buy any shares an investor wishes to redeem, or sell back, is known as an open-end fund. An open-end fund trades at net asset value (NAV). The NAV is the value of the fund’s portfolio plus money waiting to be invested, minus operating expenses, divided by the number of outstanding shares.

Load funds — those that charge upfront or back-end sales fees — are sold through brokers or financial advisers. All mutual funds charge management fees, though at different rates, and they may also levy other fees and charges, which are reported as the fund’s expense ratio. These costs plus the trading costs, which aren’t included in the expense ratio, reduce the return you realize from investing in the fund.

Net Asset Value
The Net Asset Value figure represents a fund’s total asset base, combined value of fees and expenses, divided by the number of shares outstanding minus fees and expenses.

Net Expense Ratio
The Net Expense Ratio figure represents the percentage of fund assets used to pay for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund excluding brokerage costs.

Mutual fund offered by an open-end investment company that imposes no sales charge (load) on its shareholders. (All funds offered in your Plan are in this category).

Passive Management
A market strategy that involves selecting a benchmark index to assure investment performance is the same as the underlying index. Passive investing assures that an investor will not under perform (or outperform) a market index. Passive management is opposite of active management.

Required by securities laws and issued by mutual fund companies and ETFs, the prospectus is a legal document that discloses the investment objectives of the fund, operating history, fund management, management fees, portfolio holdings, and other related financial data. Brokers are required to give a prospectus to investors before they invest.

Qualified Retirement Plan
Tax-deferred plan set up by an employer for employees under 1954 IRS rules. Such plans usually provide for employer contributions and may also allow employee contributions. They build up savings, which are paid out at retirement or on termination of employment. The employees pay taxes only when they draw the money out. When employers make payments to such plans, they receive certain deductions and other tax benefits.

Real Estate Investment Trust. REITs allow investors to invest in real estate, either through properties and mortgages, with a higher degree of liquidity because REITs sell on major exchanges like stock.

Russell Indexes
In 1984, Frank Russell Company created the Russell family of stock indexes as part of a more accurate and comprehensive system for evaluating the performance of investment managers. Russell now maintains 21 U.S. stock indexes and has launched similar broad-market and style indexes in Japan.

S&P 500
Standard & Poor’s (S&P) is a company that rates stocks and bonds according to risk. The S&P 500 is an index of 500 stocks chosen by S&P to represent the risk and return of large cap companies overall in the market. It is widely acknowledged as a leading indicator of U.S. equities.

SEC Yield
A yield calculation developed by the SEC to standardize yield data for mutual funds, closed-end funds and ETFs. The calculation uses the fund’s net investment income over the last 30 days, minus income generated from capital gains or other sources. SEC yields are often quoted for bond funds.

Small Cap
Refers to companies with a market capitalization between $300 million and $2 billion.

A type of security indicating partial ownership of a corporation. Owners of stock are entitled to claim a portion of the company’s assets and earnings.

Treasury Bills
Short-term securities with maturities of one year or less issued at a discount from face value.

Treasury Bonds
Long-term debt instruments with maturities of 10 years or longer issued in minimum denominations of $1,000.

Treasury Inflation Protection Securities
Bonds issued by the U.S. Treasury that hedge the purchaser against the impact of inflation by semi-annually increasing the par value of the issue by the amount of inflation. These securities represent a real, inflation-adjusted yield. Because of this the coupon on TIPS is significantly lower than a non-TIP security.

Treasury Notes
Intermediate securities with maturities of 1 to 10 years. Denominations range from $1,000 to $1 million or more. The notes are sold by cash subscription, in exchange for outstanding or maturing government issues, or at auction.

Relates to the frequency with which a money manager is buying and selling securities within a fund portfolio.

High turnover translates into higher trading costs, which fund investors must pay. Low portfolio turnover is better because it lessens the impact of trading and tax related costs.

The term volatility indicates how much and how quickly the value of an investment, market, or market sector changes.

For example, because the stock prices of small, newer companies tend to rise and fall more sharply over short periods of time than stock of established, blue-chip companies, small caps are described as more volatile.

The volatility of a stock relative to the overall market is known as its beta, and the volatility triggered by internal factors, regardless of the market, is known as a stock’s alpha.

Yield is the rate of return on an investment expressed as a percent. Yield is usually calculated by dividing the amount you receive annually in dividends or interest by the amount you spent to buy the investment.

In the case of stocks, yield is the dividend you receive per share divided by the stock’s price per share. With bonds, it is the interest divided by the price you paid. Current yield, in contrast, is the interest or dividends divided by the current market price.

In the case of bonds, the yield on your investment and the interest rate your investment pays are sometimes, but by no means always, the same. If the price you pay for a bond is higher or lower than par, the yield will be different from the interest rate.

Market Action

Thursday, July 12th, 2012

S&P 500 Index Today

I like the action in the market. Take a look at the chart of today’s movement of the S&P 500 Index. It looks very constructive to me from the standpoint that in spite of some bad news sending the market down at the open, the buyers come in and bring it back up. Yes, we were down 1/2% today, but the fact that there are buyers out there that are committing their money during a sell-off looks like a positive thing.

And, it didn’t happen just today. Take a look at the action in yesterday’s S&P 500 Index:

S&P 500 Index Yesterday

You can see the market was treading water waiting for the minutes of the most recent Federal Reserve Meeting to be released. When they were and no news of imminent additional monetary stimulus was included, the market sold off. But the buyers stepped in and brought it back to breakeven on the day.

As long as there are buyers out there, I am feeling fairly constructive. Earnings have been mixed (trying to be charitable) but it is just the beginning of earnings season.

Cummins Engine came out and stated that their earnings will be flat the rest of the year – no losses, just that they aren’t going to make any more money that they did in the second half of last year. Look what happened to their stock price:

Cummins Engine

Their stock price is down 13.5% since they made this announcement. I think that this will be one of those earnings seasons where bad news is punished in a big way, just like we see happened to Cummins, but good news will not be rewarded in the same ratio. It happens. Tomorrow will be the earnings report from JP Morgan and in it we will find out exactly how large of a loss they are booking on that failed trade out of their London office – $2Billion? $6Billion? $9Billion? Everyone is eager to know the extent of it. To me, it looks like $6Billion may already be built into the stock price, but that’s just a guess.

Earnings season is always a roller coaster!

Click Here for Today\'s Video on YouTube


Higher Highs & Higher Lows

Tuesday, July 10th, 2012

S&P 500 Index

As I look at the above chart, I see a market that is recovering from a sell-off. The pattern that is being formed after the market bottom ( see our blog post at this link: \"I\'m A Buyer\" for discussion of the market bottoming ) is one of higher highs and higher lows.

Typically, when you see that pattern, and when it is accompanied by the Accumulation/Distribution Line indicator showing that there are more buyers than sellers, you have a constructive market situation where the buyers really want to be invested and come in whenever the market pulls back. On the graph above, you can see that yesterday we pulled back to the red 13-day moving average line and today are bouncing up again – a repeat of the pattern since the June 1st bottom.

Fundamentally, the market looks polarizing:

· the bearish case is that the world economy is slowing, US unemployment is high and not improving, Europe has significant financial issues, and there are significant tax increases and spending cuts schedule to automatically take effect on January 1, 2013, which will also likely cut US GDP numbers;

· the bullish case is that all of the world’s economies are providing significant levels of monetary stimulus in order to prevent a recession and that corporate earnings have been strong in spite of a slow-growth global economic situation.

Our stance that supports our fully invested position since June 1st is that the commitment to monetary stimulus and growing corporate earnings will be supportive of higher stock prices. However, if the monetary support of the various Central Banks around the world decreases or if corporate earnings begin to shrink, then we would move to a much more defensive position.

As it stands, within portfolios, we have made changes that make the equities held therein more defensive in their strategic positioning and the fixed income holdings less tied to variable rates:

· Core Equity Portfolios: we have positioned this strategy much more defensively, adding to defensive equity sectors like Consumer Staples, Health Care, and Telecommunications while reducing exposure to economically sensitive areas like Energy, Materials, and Industrials.
· Best Ideas Portfolios: we have positioned this strategy so that it is more focused on larger capitalization companies. We have added some new macro themes and dropped others that were not working. New themes include Legacy Technology companies that present extreme value trading at single digit P/E multiples, high growth rate Momentum Stocks that can continue to grow their earnings in the face of a slowing world economy, and an increase in exposure to the Agriculture industry.
· Fully Diversified Portfolios: contain both of these elements and will be impacted accordingly.
· Mutual Fund Portfolios: we have positioned this strategy to have more exposure to Large Cap Domestic Equity in recognition that the US economy is the strongest in the developed world and that our larger cap companies’ stock prices are less volatile.
· Fixed Income Portfolio Allocations: in all strategies that include fixed income in the asset allocation, we have reduced the floating rate/variable rate exposure in favor of fixed rate exposure.

So, anticipate that we will have a news-driven market for the foreseeable future, focused on the very short-term. This will make movements more volatile and people will be reading into the news reports many things that just aren’t true. However, as long as our higher highs and higher lows price pattern continues, corporate earnings continue to grow, and monetary stimulus stays in place, being fully invested is the right decision.

Click Here for Today\'s Video on YouTube