|
|
Shoreline Wealth & Investment Management
|
|
|
The Stock & Bond Markets While the S&P 500 rose more than 35% from its low on March 9th, many are wondering if the market hasn't gotten a little ahead of itself. Regional banks have fallen more than 20% and homebuilders are down more than 25%. Since those industries are what got us into the economic mess, it might be that their recovery would be a necessary ingredient to any sustained and meaningful rally. Similarly, the Dow Transportation average is down more than 8% this year with American Airlines, notably, down over 60%. Add to these statistics the highest unemployment rate in 25 years and decreasing consumer confidence and one has to admit that there are more than "green shoots" of economic recovery to be seen on the horizon. In fact, the only green shoot seems to be the Institute of Supply Management's non-manufacturing businesses which was down again but decreased at the lowest level in 9 months. While I always recommend balancing portfolios between asset classes (see results from this strategy in the Bottomline column on the right), this is probably a good time to "fasten your seatbelts" since the ride is likely to get bumpier for awhile and re-balance your portfolios sooner than later.
Corporate and municipal bonds continue to offer attractive yields relative to Treasury bills, notes and bonds which many invested in due to the inherent safety of Treasuries. The yield for 1-year Treasuries is only about .45%, for 5-year notes about 2.4%, for 10-year bonds about 3.5% and around 4.4% for 30-year bonds. Investment-grade municipals yield tax free income and are paying about 1.25%, 2.9%, 4.5%, and 6.75% for the same time periods. Similarly, investment-grade corporate bonds are yielding 1.95%, 2.9%, 4.35% and 5.%. Given the passage of the stimulus package, the higher yields outside of the Treasury market are compelling.
CELEBRATING 29 YEARS
Since 1980, I have been providing financial advice to investors and I'm proud to say that our service and performance (see "Bottom Line" section on the right) continue to be superior to the market and our peers. Thanks for your support.
Real Estate Some of the same factors affecting the stock market and economy are also impacting the real estate markets, namely, unemployment and consumer confidence. Additionally, rising foreclosures and strict credit limitations is creating a prolonged (at best) period of recovery and delaying for another year or two (at worst) an increase in prices. Tight credit and rising interest rates are largely blamed for the 7-month low in mortgage applications as demand fell 30%. Even pricey and previously stable locations like Santa Barbara (along with the Hamptons and Greenwich, CT) are seeing fewer sales and lower prices. The Case-Schiller Index, which has showed decreasing prices every month since July 2006, shows the decline (18%) slowing from greater declines in prior months - perhaps a silver lining since things generally stop going down before the start to rise again. It will be nice to see if this trend continues. The worst year-over-year median price declines in the index were Phoenix (-35%), Las Vegas (-32%) and San Francisco (-28%). A much improved market for buyers with time and aren't trying to pick an absolute bottom in the cycle. |
| Selecting an Advisor |
Warren Buffet, the most successful investor of the 20th century learned his craft from Benjamin Graham, author of several books including the legendary "Intelligent Investor." This important book has been updated by Jason Zweig who includes 16 key questions to ask your advisor and 11 an advisor might ask ... click here for more details |
| Understanding Bond Investing |
Bonds were the number one asset category in 2000, 2001 and 2002. This was due to a "flight to quality" from stocks as the dot-com boom crumbled as well as interest rates declining to the lowest level in 45 years. While rates jumped in the past couple of years , further increases in rates seem unlikely. And bonds do pay a 300% premium to just leaving excess cash in money market accounts or CDs ... Full Story |
| OffshoreTrusts: Disinheriting Uncle Sam |
As a well-established asset protection strategy, "offshore" trusts provide protection for your assets and may also be the right vehicle to use to diversify your portfolio by investing internationally ... Learn More |
| Looking for a Speaker for Your Event? |
Shoreline Wealth & Investment Management has given presentations to Fortune 500 companies as well as many local groups and organizations. If you are looking for a professional presentation on topics ranging from investments to estate taxes to business or tax law, please contact us ... click here for more details |
|
Thanks for reading. Please send questions or comments.
Sincerely,
Chuck
Charles M. Bloom
Shoreline Wealth & Investment Management
|
| |
 |
| Portfolio Performance |
| This is where we provide the performance of our conservative, moderate and aggressive portfolios and compare these to the S&P 500 and NASDAQ Indexes. While they are an important consideration, performance is only a portion of the evaluation investors should consider when evaluating investment management. Other considerations include the risk taken to generate the returns, the quality of the service, the reasonableness of the fees and, more important now than ever, the integrity of the investment manager. find out more |
| | |
| |
|
| |
Return to home page
|
| |
|
| "Very professional and informative seminar" - Brown & Root, a Halliburton Company |
|
