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Lessons of the Great Recession

By | 2018, Money Moxie, Newsletter | No Comments

In January 2008, stock markets were near all-time highs, U.S. unemployment was at just 5 percent, and George W. Bush was about to sign the Economic Stimulus Act, which provided tax rebates for Americans and tax breaks for businesses. Americans were unaware that the “Great Recession” had already begun (National Bureau of Economic Research).

The consequences of excessive debt began to slowly spread across corporate America. Several companies were on the brink of failure before being saved, including Bear Stearns (March 2008), Countrywide Financial (July 2008), Freddie Mac (September 2008), and Fannie Mae (September 2008). Each of these was saved by unpopular government intervention.

Then came Lehman Brothers. It was “too big to fail,” and yet it did. At 1:45 AM on September 15, 2008, Lehman Brothers filed for bankruptcy protection—the largest and most complex bankruptcy in American history. It had over $619 billion in loans it could not repay and it marked a tipping point: a moment when investors around the world woke up to reality.

There was too much debt, especially American mortgage debt. In 2008, over 800,000 families lost their homes to foreclosure.1 In 2009, there were around 2.5 million.2 Unemployment doubled to a rate of 10 percent.3

The cost of recovery weighed on the government as it shifted the debt from overburdened Americans to the U.S. deficit (Now over $21 trillion).
The Federal Reserve lowered its rates to zero and kept them there for seven years. When that was not enough, it purchased $4.5 trillion dollars of debt—essentially injecting the American economy with money. It seems to have worked by many measurements.

As the economic recovery firmed, the Federal Reserve began to raise rates. At first, it was cautious. Now, it plans to keep going higher at regular intervals. This change may be an important shift.

One day in the future there will be another recession, but it will be different than the Great Recession.

A lot has changed in the last 10 years. Americans have less mortgage debt. The government has much more. While the housing market is strong, it does not seem to be as inflated as 2008.

For now, move forward with optimism and confidence, but don’t forget the lessons of the past. The risk of another economic downturn is real. Whether it comes in 1 year or 10 years, your personal preparation will be valuable.

 

1. “Foreclosures up a Record 81% in 2008,” CNN Money
2. “Great Recession Timeline,” History.com
3. Federal Reserve Bank of St. Louis
4. “Looking Back at Lehman’s Demise,” Wealth Management

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Just In Case You Missed It

By | 2018, Executive Message, Money Moxie, Newsletter | No Comments

Dear Financial Partners and Friends!

How is the U.S. economy really doing? Here are a few quotes and facts regarding the past, the present, and the future.

The Past: “We Ran Out of Words to Describe How Good the Jobs Numbers Are,” (“The Upshot,” Neil Irwin, The New York Times, June 1, 2018.)

The Present: The U.S. economy jumped to an annualized rate of 4.1 percent GDP in the second quarter of 2018. That’s almost double the first quarter’s rate of 2.2 percent. This is the fastest rate of growth since 2014. This is great news for all of us!

The Future: The following quotes are from Elizabeth MacDonald’s, “Evening Edit,” Fox Business News, July 19, 2018. MacDonald said,“(Here are) CEO commitments for more jobs over the next 5 years.”

FedEx®: “FedEx® will train or reskill 512,000 people over the next 5 years.”

General Motors®: “General Motors® is proud to offer 10,975 workforce training opportunities.”

The Home Depot®: “The Home Depot® is pleased to provide enhanced training and opportunities for 50,000 associates.”

Raytheon®: “Tom Kennedy from Raytheon® and we pledge 39,000 enhanced career opportunities.”

The U.S. economy is doing well. As a result, most Americans are doing well. Remember this: Your financial success is our passion and our mission at Smedley Financial.

Best Wishes,

Roger M. Smedley, CFP®
CEO

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Why We Are Watching Oil In 2018

By | 2018, Money Moxie | No Comments

Despite record U.S. oil production, the price of a barrel has been climbing in 2018. The ripple effects can and will be seen throughout the economy in the coming months.

The average price of regular gasoline in the United States is nearly $3.00 per gallon. One year ago, it was $2.35.1 That’s a 25 percent increase at a time when few expected such a rise.

Most Americans spend between 2 and 4 percent of their income on gasoline,2 so the direct impact on our spending may not seem like a big deal at first.

Americans, accustomed to the lower prices over the last couple years, have also been buying larger and larger cars.

We should also remember that oil is a major ingredient in many products we purchase (as illustrated in the adjacent graphic). While U.S. supply is growing, it has fallen globally.

Oil prices are still far from their all-time high of $136.31 in June of 2008. The domino effect of rising prices has also not been a major concern yet.

Global oil supply is the wildcard. If it increases (a real possibility), prices are unlikely to rise significantly. If it falls, rising prices may spread. Eventually, it could impact our spending.

Remember, consumers, drive 70 percent of the economy. So, if we cut back in our spending then the U.S. economic engine may slow as well. That’s why we are watching oil more closely in 2018.

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(1) GasBuddy.com
(2) U.S. Energy Information Administration
*Research by SFS. Graphic from Visual Capitalist. Investing involves risk, including potential loss of principal. Past performance does not guarantee future results. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based upon
changing conditions. This is not a recommendation to purchase any type of investment.

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2017 A Banner Year! Where to from Here?

By | 2018, Money Moxie | No Comments

The following is quoted from WealthTrack with Consuelo Mack.

“For answers about the 2018 stock market (S&P 500) we turn to Ed Hyman, Founder, Chairman, Head of Economic Research at Evercore, ISI, a top-ranked macro and investment firm. Hyman was voted #1 Wall Street Economist by Institutional Investor’s survey of professional investors for an incredible 37 years. His comprehensive, but succinct and easily digestible daily macro research is considered a must-read by professional investors.”

“To understand where we are growing, it helps to understand where we have been. A central thesis of Hyman’s is that the stock market drives economic activity. Since 1968–that’s a 50-year stretch–the S&P 500 has increased 20 percent or more only 12 times. Last year (2017) it came within a hair of doing so with its 19.4 percent gain.”

“In 10 of those 12 times, the economy was strong the following year. Taking out the effects of inflation, real GDP increased 2.7 percent or more. So 83 percent of the time economic activity was robust. The average for the 12 years after market advances of 20 percent or more was 3.4 percent real GDP growth.”

“The S&P 500 last year had another distinction. According to Hyman’s team, 2017 was the first year ever that the S&P 500 posted positive total returns–that’s including dividends–every month. The previous closest perfect year was 1995, which had only one down month. The market that year (1995) was up 34 percent. The following year (1996) it gained 23 percent, dividends included, and real GDP was a gang buster 4.5 percent.”

Bullish Best Wishes in 2018,

Roger M. Smedley, CFP®
CEO

The S&P 500 is widely considered to represent the U.S. stock market. One cannot invest directly in an index. Investing involves risk, including potential loss of principal. Past performance does not guarantee future results. The opinions and forecasts expressed are those of
the author and may not actually come to pass. This information is subject to change at any time, based upon changing conditions. This is not
a recommendation to purchase any type of investment.

Source: WealthTrack, Episode #1429, Broadcast January 5, 2018

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Confidence is up, but will it lift the economy higher?

By | 2017, Money Moxie | No Comments

Looking at performance of the stock market over the last 12 months, one might assume that the economy is exploding upward. The rise has been driven mostly by a boost in consumer sentiment, which has taken off since the U.S. elections in November.

In 2017, consumer sentiment hit its highest level in more than 10 years!

Consumers represent 70 percent of the U.S. economy. Their confidence is crucial to future growth. Business spending is much smaller, but it is also much more volatile. So, when businesses are increasing their spending, the economy really has potential to move up. The good news is that optimism is also up for business executives.

Confidence data is nothing more than opinion polls. This is why they are referred to as soft data. Hard data represents real action. Typically, these go hand-in-hand: A change in one leads to a corresponding change in the other.

After inflation, consumer spending is up, but just by 2.8 percent.
The trend in the hard data does not match that of the soft data. The Federal Reserve does not seem concerned.

The Fed raised rates last December and March. Expectations are nearly 100 percent that it will raise them again in June–despite first quarter economic growth of 0.7 percent.

How does one reconcile the gap between opinion polls and actual improvement? What is likely to happen?

The U.S. economy is still improving. Unemployment is down to 4.4 percent. Corporate profits are up. Energy prices are down. Finally, global growth appears to be entering its first synchronized period of growth in two decades. According to BlackRock, European earnings are up nearly 20 percent in the last year.

Add to this good news the potential for positive surprises and it becomes more clear why a glass-is-half-full perspective is better.

  • Soft data could finally lift hard data
  • Increased global trade will help U.S. companies
  • Wages should rise with tight labor market
  • Deregulation could create more opportunities
  • Corporate tax reform may boost profits
  • Infrastructure spending could boost productivity

Any one of these surprises could help convert optimism into action. The timing is the greatest uncertainty, but that is no reason to be overly concerned. With so many positive economic changes occurring in the world right now, we believe there are plenty of opportunities
in 2017.

 

*Data from the Federal Reserve Bank of St. Louis. The S&P 500 index often represents the U.S. stock market. One cannot invest directly in an index. Investing involves risk, including potential loss of principal. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or investment plan. SFS is not affiliated with any companies mentioned in this commentary.

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Trumponomy: Make the Economy Great Again?

By | 2017, Money Moxie, Newsletter | No Comments

Income Tax Cuts
Republicans want to simplify income tax brackets from 7 to 3 and allow everyone to pay less. It could be like an economic sugar rush. The question is: Will it turn into enough growth that it will help not hurt the national debt?

Corporate Taxes
Currently at 35 percent, a drop to 15 percent could be a shot of adrenaline to profits (according to The Wall Street Journal, with deductions, companies average 29 percent). There is also a plan to help corporations bring cash home from overseas. Do companies boost productivity or just spend on dividends and stock buybacks? Good for investors either way, but long-term we need productivity.

Infrastructure Spending
Trump promised a $500 billion stimulus, but more debt isn’t popular. Implementation will take some time and the actual budget may be smaller than promised (unless President Trump gets support from Democrats who have been working to pass infrastructure stimulus for years).

U.S. Debt
Americans are not watching this as closely as they were a couple years ago, but our debt is about to reach $20 trillion. If we ignore it, interest rates will rise and our debt will only get worse–Time to balance the budget?

 

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The Promise of Prosperity

By | 2016, Money Moxie, Newsletter, Viewpoint | No Comments

Americans want a strong country and growing economy. That much we agree on. Of all the promises we heard this election year, none may be more difficult to keep than the commitment to boost growth up to levels last seen decades ago.

Since 2009, the U.S. economy has increased at a rate of 2 percent. Many countries envy that number, but Americans expect more. Our increases were twice as big 20 years ago.

In all of human history I know of no other time with such miraculous growth as post World War II. We have come to accept boom times as normal.

From 1948 to 1973 the average economic output of an American worker doubled. That productivity trend continued until the early 2000s when it suddenly slowed.

prosperity

Consumers Carried the Economy
The “Great Recession” of 2008-2009 complicated things further by drastically altering Americans’ perception of stability and diminishing their tolerance for government debt.

This led to tighter limits on government spending, which has been a huge drag on economic growth. The federal government has cut spending 4 of the last 5 years. This is good short-term because it reduces debt. The long-term impact is less certain.

How much can our economy grow when the government is cutting spending? Who picks up the slack? Businesses have been hesitant to reinvest large amounts in long-term projects. So the responsibility for economic growth has fallen on the shoulders of the U.S. consumer.

Politicians Turned to Spending
Today, politicians and economists are calling for stimulus. What form this takes is yet to be seen, but the popularity of such an idea is rising. Both presidential candidates announced plans to increase government spending to improve infrastructure and stimulate an atmosphere of growth. Donald Trump plans to increase spending by $500 billion. (Hillary Clinton proposed bumping it up by $275 billion.)

Will Stimulus Work?
The answer for decades following the Great Depression was “yes.” The theory is that for every dollar the government spends it can boost the economy by several dollars—creating more wealth than was spent as the dollars circulate through the country.

It fell out of favor in the 1980s and 1990s. Now it’s back.

If stimulus is going to work then it should be concentrated on “fiscal multipliers.” These are the best places and they are often described as levers that can be pulled to actually create growth in the economy.

For stimulus to work it should be focused on the most effective area: infrastructure. Why?
1. Immediate creation of jobs
2. Jump in demand for construction materials
3. Greater efficiency for the entire economy
4. Investment in the future of America

Our bridges, airports, and freeway systems are in need of repair. Our electric grid is outdated and vulnerable as well. Technological advancements have redefined living. It may be time to apply some innovative American ingenuity to our infrastructure.

If there ever was a time that Americans could benefit from this stimulus it would be following a lack of spending—a situation we now find ourselves in.

 

*Research by SFS. Data from the Federal Reserve Bank of St Louis. Past performance does not guarantee future results.

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Subzero Rates Freeze Growth and Hold Back Your Portfolio

By | 2016, Money Moxie, Newsletter | No Comments

Crazy things are happening in the world! There is a chronic shortage of demand for goods in global economies. For years, governments have been fighting back—fighting back by dropping interest rates. Recently, rates overseas have fallen to subzero levels.

Negative rates—where lenders pay the borrowers—seemed unimaginable and foolish a few years ago. Now, they are beginning to feel like the new normal. How can individuals and countries flourish in such an environment? They can’t!

What is it like to live in a subzero-rate world?

1. The subzero world is so crazy that global interest rates are at their lowest level in 500 years of recorded history.1

2. The subzero world is so crazy that if you want the German government to borrow your money you have to pay! Hold that bond for ten years until it matures and the government promises to pay you back less than it borrowed.

3. The subzero world is so crazy that many homeowners in Denmark are no longer paying interest to banks for their mortgages. The banks are paying interest to them!

Hans Peter Christensen, a recipient of a check from his mortgage company in Denmark, said this after receiving his first payment: “My parents said I should frame it, to prove to coming generations that this ever happened.”2

The biggest borrowers in the world include the United States, United Kingdom, Germany, and Japan. The figure below shows how low these rates have become.

rates

Negative Rates Matter to Americans.
Low rates overseas make positive rates in the United States more attractive for investors, which pushes U.S. rates down as well. This makes it less expensive for us to take out a mortgage or a car loan. It creates opportunities for businesses to borrow and grow. On the surface, these low rates seem like a benefit.

Low Rates May Have Helped. Now They Hurt.
During the recession of 2008-2009, there was an economic emergency that required extraordinary effort to infuse calm and confidence.

The emergency is over. The economy should come off life support. The reluctance to move forward is now harming the very confidence it was meant to create.

Artificially low rates are also destroying natural incentives to borrow and lend.

Consumers and businesses do better when banks are healthy, but banks are not healthy. There is little profit to be made and a low incentive to offer loans when interest rates are so low. Why take the risk when the potential reward is so low?

Subzero and near-zero rates also encourage transactions that would not take place in a rational world. For example, many corporations now borrow just to pay dividends. Of the 500 largest companies in the country, 44 have paid more in dividends in the last year than their respective net income.3 This financial engineering helps investors now, but does nothing to strengthen a company or its employees.

End the Pessimism.
Despite all the positives in the economy, consumer confidence is low. Investor sentiment is terrible. Most Americans believe we still have not recovered from a recession that officially ended over six years ago.

Look around. Americans are in a good financial place. Most people who want to work have a job. Unemployment is at just 4.9 percent. In Salt Lake City, where SFS is located, that rate is just 3.6 percent.4

then-and-now

A Day of Reckoning Will Come.
The next financial scare could come after fantastic economic growth, leading to inflation and central banks would have to rapidly raise rates—shocking the economy. Or the storm could blow in from the opposite direction: economic slowdown.

If the Fed and other central banks don’t normalize rates now then there will be fewer options in the future to help keep the world economies going in a real emergency.

It’s Time to Begin Moving Back to Normal.
Central banks around the world should stop experimenting. The United States is strong enough to handle a more normal business environment. The Fed can do that by slowly bringing U.S. interest rates up.

The U.S. economy is not perfect, but it is good enough to handle borrowing one quarter of one percent higher. It could even help by sending a signal of confidence to the world—confident workers, businesses, and consumers.

Higher rates may cause the U.S. dollar to strengthen, and that could hurt American businesses that export. However, the United States has the best economy in the world and we are growing faster than any other developed country. Keeping our dollar artificially low may not be a good idea.

We can allow the dollar to rise a little as we bump up interest rates from their near-zero levels. This message of confidence may help increase demand worldwide—giving investors something to cheer about as well.

 

1. Bill Gross, “Negative Interest Rates a Supernova,” Janus Funds, June 2, 2016.
2. Charles Duxbury and David Gauthier-Villars, “Negative Rates Around the World,” Wall Street Journal, April 14, 2016.
3. Mike Bird, Vipal Mongaand, Aaron Kuriloff, “Dividends Eat Up Bigger Slice of Company Profits,” Wall Street Journal, August 18, 2016.
4. Federal Reserve Bank of St Louis.

Research by SFS. One cannot invest directly in an index. Diversification does not guarantee positive results. Past performance does not guarantee future results. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based upon changing conditions. This is not a recommendation to purchase any type of investment.

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Is the Dollar in Danger?

By | 2015, Money Moxie, Newsletter, Viewpoint | No Comments

The dollar has ruled supreme as the global reserve currency for over seven decades. It is the preferred means of payment, value, and reserve. As the most trusted currency on earth, it rewards Americans with lucrative privileges. While the dollar’s dominance is unlikely to last forever, a change would be difficult.

Dominant Dollar
The dollar’s source of power comes from trust and economics. We have a stable government a deep financial system. Against these benchmarks, other currencies fail. Our economic production represents 23 percent of global GDP.1 It is safer, easier, and less expensive to trade assets here than any other place on earth.

Profitable Privileges
The U.S. dollar is roughly 5 percent stronger than it would be if it were not the global reserve currency because foreign investors, corporations, and governments purchase dollars.2 This raises the value of our assets (real estate, stocks, etc.) as Americans and helps us enjoy a higher standard of living. Imported goods and overseas travel are especially more affordable. The impact of this wealth effect is estimated to be as high as 0.5 percent of GDP,2 which would be an increase of $900 billion for Americans this year.

In addition, almost 90 percent of world trading is done in dollars.3 This saves U.S. corporations money and lowers financial volatility.

The dollar’s status also increases demand for our government debt. According to Wikipedia, 63 percent of all reserves in the world are dollar-denominated debt. This demand lowers borrowing costs and saves our government an estimated half of one percent on interest.2

Greenback Drawback
In order to maintain the greenback’s place at the top, our government must borrow from and pay interest to everyone else. In addition, our strong dollar makes labor more expensive here. That is one of the reasons why jobs have been going overseas for decades.

Approximately 30 percent of S&P 500 companies get half their revenue from outside the United States. The strong dollar makes exports more expensive in foreign markets and may shave 0.4 percent from the U.S. economy this year.4

Challenging Change
Dethroning the dollar would be a process. It is not something that any group of individuals could change with a vote (Russian President Vladimir Putin has tried).

China is the world’s second largest economy. Should its yuan be considered a strong alternative? It is doubtful because the Chinese government wants a weak currency. It decided to lower the yuan’s value by 2 percent in August. This deliberate devaluation destroys trust, and no country has ever established the global currency through devaluation. This helps explain why the yuan is used in less than 3 percent of world trade while the dollar is used in 45 percent.5

Now What?
Extremely positive things are happening for the dollar and many experts are worried that the dollar may be too attractive. Between April 2014 and April 2015 the dollar appreciated 13 percent6 (a massive move for currency). Now, the Federal Reserve is conflicted over whether to raise rates because it may cause the dollar to strengthen even more.

The so called “experts” and conspiracy theorists will continue to beat their drums. No matter how logical their arguments appear, their poor predictions are meant to create fear.

Discussing the dollar’s status into the future and working hard to maintain its credibility is vital. If we do this, I believe it is safe to say that the days of the strong dollar will be with us for many, many years to come.

 

1. Derek Bacon, “Dominant and Dangerous,” The Economist, October 2015.
2. Richard Dobbs, David Skilling, Wayne Hu, Susan Lund, James Manyika, Charles Roxburgh, “An Exorbitant Privilege? Implications of Reserve Currencies for Competitiveness,” McKinsey & Company, December 2009.
3. Milton Ezrati, “Currencies: Yuan Wrong to Rule Them All,” Lord Abbett, November 2015.
4. Chris Matthews, “The Strong Dollar: Your Enemy or Friend?” Fortune, March 2015.
5. Fion Li, “Yuan Overtakes Yen as World’s Fourth Most-Used Payment Currency,” Bloomberg, October 2015.
6. Federal Reserve Bank of St Louis.

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Rising Rates Will Impact: Your Income Your Spending Your Investments

By | 2015, Money Moxie, Newsletter | No Comments

Federal Reserve (Fed) members are making plans to raise interest rates and it is going to affect your wallet! Individuals do not borrow from the Fed, so you may be wondering how it could impact you. The Fed’s rate increase will start economic ripples that are going to hit your income, your spending, and your investments.

The Fed
The Fed was established by Congress and signed into law by President Woodrow Wilson on December 23, 1913. It has two objectives: seek maximum employment and maintain stable prices. (It is a highly sophisticated organization with over 300 Ph.D. economists.)

In simpler terms, the Fed is less like a surgical tool and more like a hammer. A hammer is blunt and its impact can be powerful. It doesn’t perform a lot of functions, but it is extremely useful for the right problems.

The Fed has power to perform a limited number of actions. It can strike hard and fast because it does not need congressional approval and its officials are not elected. The Fed is not focused on individuals as its actions have worldwide implications.

Why the Fed Changes Rates
The purpose of changing rates is to influence decisions that will help control unemployment and inflation.

In a slow economy: If spending decreases then companies become less profitable and may choose to layoff workers, which will further decrease spending and profitability. The Fed will try to reverse the cycle by lowering rates. When the Fed rate changes, other rates follow. This may encourage spending as it makes it cheaper to borrow for education, cars, homes, etc.

In a healthy economy: When the economy is thriving and the job market is good there is a lot of pressure on companies to raise wages. Confident consumers will spend more even if prices rise a little. When prices increase beyond a “healthy rate” of around two percent, the Fed gets worried. It may raise rates to decrease borrowing and spending.

Rates will Rise
Rates have been low since 2008 when the Fed brought short-term rates down near zero percent. Those who were able to borrow benefited from low interest rates. Right now the Fed is not worried about price inflation, but it does want to get rates back up to “normal.”

bag of money

Your Spending
The result will be higher rates when you take out a mortgage or get a loan for a new car. Anything with a variable rate, like some credit cards, will probably see an increase. Debt is going to get more expensive. Paying debt off and living within your means will be important.

Your Income
The labor market is improving. Many companies have announced plans to raise wages for workers, but the expected improvement has not yet hit. It’s coming!

briefcase

Wage growth was just around 2 percent in the last year and the Fed believes the country is headed towards 3.5 percent. This is good news for workers and it gives the Fed confidence to slowly raise rates to normal. However, if wage growth is too high the Fed will become uncomfortable and will really drop the hammer down—acting quickly, with force just to make sure prices don’t get out of control.

Your Investments
Back in 2013, Ben Bernanke, then Chairman of the Fed, suggested the Fed might end (taper) its stimulus. The stock and bond markets went crazy! The event even has a name: “The Taper Tantrum!” In the end, the Fed continued its stimulus.

The Fed is unlikely to catch investors by surprise when it finally does raise rates. Its members have been quite open about its plans and the economy is able to withstand a very gradual rise in rates.

percentage

Investors should expect more volatility, but in spite of the choppiness, the returns should still be positive. That’s what we have seen in the past.

Prepare Your Personal Economy
Make sure you are saving some income for rainy days even if it means cutting back on a little spending. Make sure the risk you are taking in your investments matches your ability and willingness to handle it. Finally, align your portfolios for the future.

Will the Fed hike rates in September? Will it be just 0.25 percent? How long will the Fed wait to make its next move and will it go too far too fast? The answers will be “data dependent,” a phrase the Fed members have been using lately. It will depend on U.S. economic growth, wage growth, and price inflation.

A gradual economic improvement will allow time to digest the news and act slowly—waiting months between each rate increase to see the impact. There are no signs of overheating for now. If that changes, the Fed is not going to sit idle. It would have to act. After all, to a hammer, everything looks like a nail.

 

*Research by SFS. Data from public sources. This is not a recommendation to purchase any type of investment. Investing involves risk, including potential loss of principal. The S&P 500 index is often considered to represent the U.S. market. One cannot invest directly in an index. Past performance does not guarantee future results. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or investment plan.

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