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Shoreline Wealth & Investment Management
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The Stock & Bond Markets A new decade at last. Everyone could use one including the S&P and NASDAQ Indexes which had returns of -1%/year and +.5%/year, respectively. Shoreline's returns averaged 5-7%/year depending on whether our clients participated in our conservative, moderate or aggressive portfolios. The decade began with the worst 3 consecutive years of market returns since the 1930's, followed by a rise and ended with both real estate and financial system meltdowns. And then there's the rise of foreign economies, including those from the Brazil/Russia/China/India (BRIC) Index which Goldman Sachs listed as their "pick of the decade." Let's hope the next 10 years offer less anxiety, less volatility and more consistent returns for all investors in all economies.
There's a lot of conflicting news to consider. On the positive, the Institute for Supply Management (ISM) Index which measures manufacturing activity rose to 60 which exceeded the most optimistic estimates and was the highest reading since January 2006. On the other hand, December payrolls shrank by 85,000 along with increasing unemployment and 1.4 million bankruptcy filings. To the extent consumers are out of work or reign in their spending habits, economic recovery will be muted. Bond yields increased this past month with improving economic indicators (in balance) and investors responding to concerns about the Federal Reserve's impending (3 months? 6 months?) tightening of money supply to keep inflation rates low. The yield for 1-year Treasuries is only about .4%, for 5-year notes about 2.5%, for 10-year bonds about 3.7% and around 4.6% for 30-year bonds. Investment-grade municipals yield tax free income and are paying about .5%, 1.7%, 3.3%, and 4.5% for the same time periods. Similarly, investment-grade corporate bonds are yielding 1.3%, 3.1%, 3.4% and 6.2%. For those worried that inflation make negatively impact bond values but still prefer the safety and income offered by bonds, this may be a time to consider "inflation-protected" Treasuries.
CELEBRATING 30 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 Robert Shiller, co-founder of the S&P/Case-Shiller Home Price Index, said there was "maximum uncertainty" in the real estate market with a "better than 50/50 chance" of continuing price declines. He further expects the momentum in commercial real estate to continue to "decline dramatically." Not exactly the "now's the time to buy at the bottom" response many would be buyers were waiting to hear or, for that matter, those owners who feel they've endured enough pain for a lifetime and could use some positive news. November new home sales plunged 11% supporting Shiller's position. December sales started to slow when first-time buyers found out the $8,000 tax credit would be extended giving them more time to find the right home at the right price. As stated often in this column, picking bottoms is tough and real estate is (or should be) a long-term investment. That said, good buys are to be found for the patient and informed real estate investors with access to cash or credit. |
| 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 |
| Investing: European Investing |
With a bigger economy ($11 trillion) and a larger population (455 million), a newly united Europe will provide more meaningful competition than the U.S. has had to contend with in years ... Full Story |
| Wills: Disinheriting Uncle Sam |
Writing or bringing up to date a will is the first (and least expensive) way to protect your assets in the event of death. More sophisticated strategies (trusts ...) can also be useful ... 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 |
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Thanks for reading. Please send questions or comments.
Sincerely,
Chuck
Charles M. Bloom
Shoreline Wealth & Investment Management
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| 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 |
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