Spring 2011 Update
Dear Clients,
RE: Spring 2011 Outlook
The first quarter of 2011 has come to a close and spring is in the air. In addition to myself enjoying my 50th birthday (!!), I’ve enjoyed seeing the markets acting more rationally than they have in a long time. The market rally we saw at the end of 2010 carried over into the first quarter of 2011. According to Investors Business Daily, economic growth, as measured by gross domestic product, grew at a much faster than expected rate of 3.2% in the fourth quarter of 2010 and it was mostly due to the consumer spending. There’s a growing feeling that confidence is slowly coming back and that the worst seems to be over. Granted, unemployment is still very high and a massive foreclosure backlog still exists; but consumers seem to accept that fact. As long as they are not personally affected, the consumer is moving on and getting back to spending money.
I continue to be amazed at the changes in our lives as a result of technology and the Internet. What used to take weeks and months to do now take hours and days. How many of us still have a landline for our personal phone? How many of us still read a print newspaper in the morning? The new ways of handing information, I think, will have a profound effect on us in ways we are just now beginning to understand. Opinions form more quickly and emotional reactions to events seem much more strong than in the past. Just look at the events in Egypt. In a matter of days, what was once the largest stable, yet authoritarian, country in the Middle East was on the verge of a change in power, with massive protest in the streets of Cairo.
So myself and my staff here at Wealth Management Institute continue to embrace the future. History books are full of stories of societies, countries, companies, and individuals resisting change only to be found obsolete and irrelevant. We continue to look at ways to harness technology to deliver our financial planning and money management services in the most effective, value-added way to you, our clients.
So in order to change with the times, we are implementing the following changes:
1. Our next newsletter, “Loose Change”, will be our last paper newsletter. It will be replaced with an electronic newsletter.
2. You will also start receiving a monthly market update report via e-mail.
3. I continue to embrace a relative strength concept of investing money, favoring technical analysis and actual price movements over fundamental analysis. The world moves quickly nowadays. I have found that by the time the fundamentals change, the price has already moved in a lot of cases.
4. We have encouraged more and more clients to sign up for electronic delivery of their monthly brokerage statement as well as their trade confirmations. Not only is this the green way to go, but we have heard rumors that Pershing will start charging money for paper statements. Please check our website and your account statement for details. Call Ashlie to sign up for e-delivery and e-access.
5. We have signed on with a “green” consulting firm to look at ways of doing things in a more environmentally –friendly manner.
The major themes I see going forward include (1) a rising interest rate environment (2) a continued strengthening of the economy (3) Rising worldwide demand for food and energy and (4) increased confidence in the U. S. markets. In our portfolios, we are adding domestic small and mid size companies (small and mid cap), decreasing our bond holdings, and adding commodities. Specifically, I favor the technology, real estate, oil services, mining, and drug sectors of the domestic economy. After a brief pause, the Emerging Markets continue to carry the leadership when it comes to international investing.
Nan and the children are doing well. Daddy is feeling the effects of turning 50 with three little kids! I wish we would have had them ten years sooner. They are a daily reminder of the best things in life and an absolute joy to raise.
Take care and thank you for your business. Please don’t hesitate to call with any questions.
Sincerely,
C. Cameron Bell, MAS, CFP
Executive Director
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The views expressed are not necessarily the opinion of FSC Securities Corporation, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investing is subject to risks including loss of principal invested. No strategy can assure a profit nor protect against loss. Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs or expenses.
The price of commodities is subject to substantial price fluctuations of short periods of time and may be affected by unpredictable international monetary and political policies. The market for commodities is widely unregulated and concentrated investing may lead to higher price volatility. Historically, small cap stocks have been more volatile than the stock of larger, more-established companies. International investing involves special risks such as currency fluctuation and political instability. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.
