That Was The Week That Was- 4th Week January

 

IF YOU HAVE SAVINGS YOU WANT TO PASS ON TO YOUR CHILDREN, FRIENDS,  RELATIVES, A CHARITY OR CHURCH AND YOU DON’T KNOW VERY BEST WAY TO DO THIS YOU SHOULD REGISTER FOR MY CLIENT BREAKFAST MEETING FEBRUARY 21ST AT SYCAMORE HILLS G.C., MACOMB, MICHIGAN. Larry E. Powe, Attorney at Law, Principal/Partner Keller Thoma, P.C., is the guest expert who will explain: What is an estate plan, who needs an estate plan, what is probate, who should be concerned and why, should you create a will or a revocable living trust, what is the difference, can you change them, who should be your Trustees, and the most common mistakes people make after creating  a Revocable Living Trust. Plus- I will review last year’s economic results, what went right what went wrong and what we can look forward to this year. Call me or send me an email telling me how many will be attending. 586 295 0430

JANUARY RESULTS WILL NOT BE PRETTY.

 

 10 pre-retirement steps.

• Prepare a budget-potential retirement expenses.
• Meet with your investment planner/advisor.
• Establish an emergency fund- 6 – 12 months income.
• Plan your health insurance.
• Choose where you want to live.
• Review your estate plan with your attorney.
• Review your life insurance along with auto and home.
• You and your accountant establish your tax plan.
• Review your company benefits.
• Meet, call or go online to decide on your social security strategy.  from USA TODAY, Tom Orecchio Advice IQ, 9-20-2014.

  A strong dollar has some good things and some bad things. The bad thing is that exports don’t sell well when the dollar is strong. The good thing is that we get to buy more stuff for the same price. It’s cheaper to travel in other countries. We can buy things that used to cost us more. But, if exports fall this could have consequences on our economy. A very strong dollar could throw our economy into a recession.Fed officials say that they are not worried about the effects of a stronger dollar on the broader overall economic growth- for now. The reason is that our exports only account for 13% of the U.S economic output. Analysts also see a benefit for the recent QE program instituted by the ECB (European Central Bank) that helps the U.S. by lowering global borrowing costs and also enticing overseas investors to U.S. Treasuries.WSJ 1/25/2015 Two major tech names reported they lost 4% off revenue growth due to the stronger dollar. 1/28/2015 WSJ/Barrons.com

‘We’re mad as….and not going to take it anymore…’, and so the Greek populace voted an anti-austerity party into power over last weekend as a sign that they’ve had enough of the five years of bitter medicine they’ve been prescribed by their EU neighbors. The Syriza party is considered a radical leftist organization that may indeed tell the EU to shove it when it comes to Greece repaying their bills, such as bond payments, and exit the euro as a currency. Worries are not so much about Greece leaving the union but other countries under identical circumstances also deciding that enough is enough. The dangers are more to the Europeans than to the entire global economies. However, experts are unsure how this will all play out if indeed it happens. WSJ, MARKETWATCH.COM, CNBC 1-26-2015. Greeks and others blame Germany for their plight and have staged demonstrations.

MONDAY MARKETS SLIGHTLY UP ACROSS ALL INDICES. FBI made one arrest and charged two other Russian diplomats for spying for Russia. Mission was to learn how to use high-speed trading to destabilize our stock markets. MarketWatch.com 1/27/2015 MarketWatch.com printed a few lines of the taped phone conversations by the FBI and it read like someone trying to teach a monkey how to mix a Margarita. In Flash Boys, author Michael Lewis said a significant number of people who designed the high frequency trading systems were Russian. Could it be that the Russian spy system is as messed up as ours?

THE WALL STREET JOURNAL REPORTED, BY ADAM ENTOUS, how the CIA thoroughly messed up the mission to arm Syrian rebels by red tape and issuing supplies with strings attached. According to the WSJ 1/27/2015, entire CIA-backed rebel units who went through CIA training programs have either changed sides by joining Islamist brigades, quit the fight or gone missing. According to Entous the President initially balked at the idea of Syrian training program but finally gave the go-ahead in 2013. The CIA limited the number of weapons, demanded the return of used weapon's and handed out bullets as low as 16 per fighter per month. When a trusted Hazzm leader was asked why they had joined the U.S. program the response was, ‘ We thought going with the Americans was going with the big guns. It was a losing bet.’

 

  Tuesday’s market was as ugly as a car wreck. The trading machines drove all the indices lower. The DJIA off triple digits, almost losing 300 points. Art Cashin, UBS director of floor operations at the NYSE, told CNBC Tuesday 1/27 that the reason stocks were falling was because of an ugly ‘buffet’ of news from Greece getting pounded to weaker U.S. economic data to the strong dollar wreaking havoc on corporate earnings. Up to now the strong dollar has been seen only as a minor nuisance. Later Jim Cramer put it in perspective when he said on Mad Money that not all companies have multi-national operations. And, some companies had blow-out positive numbers even with the strong dollar. Cramer said, ‘Stick with the winners and not the whiners.’

SHOULD YOU LISTEN TO THOSE THAT SAY, DON’T BUY UTILITIES! For the last two years I’ve heard and read the so-called experts saying for investors to stay away from utilities. And for the last year and a month they’ve been wrong as utilities have bloomed. The argument is that in a rising interest rate environment utilities do poorly. So far, we’re not in a rising interest rate environment and some predict that we may not be in such a cycle until sometime in 2016.

 

Wednesday Stocks Tanked- Again on Energy Prices. The Federal Reserve is fighting reality, according to WSJ’s Heard on the Street. The Federal Reserve issued a statement that said they expected inflation over the medium term to move toward 2%. Credit markets think otherwise. Treasuries have fallen wholesale this past month.  The 30-year has fallen to 2.29% and the 10-year sits at 1.72%. Markets believe, and are signaling, that rates may be hiked in September, at the earliest. Inflation readings, the WSJ reported, are likely to get a lot cooler as the low cost of energy filters through goods and services sectors. We may see an inflation reading of 1%.  WSJ 1/29/2015

Dow off 195 points Wednesday. The VIX jumped 19%. We’ve been here before.

The Best is Ben Levisohn Writing for the Barrons.com ‘Stock Watch’.   If you’re wondering what the catalyst for Thursday’s market pop of 225 points on the DJIA Ben’s answer is the best- For no good reason! Just about everyone has a particular ‘reason du jour’ but Ben explains it where it’s just futile to have a reason. He also quotes Stefel’s Barry Bannister and Jesse Cantor who recommended that investors watch the dollar. They report that upon a dollar pullback they’d expect trend winners in healthcare, consumer discretionary, technology and consumer staples. If and when the 10-year yield increases they expect utilities and REITs lose support. BARRONS.COM 1/30/2015

 

Questions call Paul @ 586 295 0430 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.

SECURITIES OFFERED THROUGH WESTMINSTER FINANCIAL SECURITIES, INC. MEMBER FINRA/SIPC.