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Shoreline Wealth & Investment Management
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The Stock & Bond Markets "Markets can remain irrational far longer than you or I can remain solvent" - John Maynard Keynes. That quote is right up there with "in the long run, we're all dead." The stock market recovery since the March 2009 lows is almost 65%, the biggest recovery in more than 60 years. Whether or not it's sustainable or rational is up for debate. On the plus side, the economy does seem to have turned a corner and we're clearly back from the precipice. Consumer spending and sentiment is on the upswing although unemployment remains a significant drag. Company earnings are increasing as well but it remains to be seen how much is already priced into the market. One other factor fueling the U.S. stock market rise is that the alternatives aren't as attractive - Europe's well-publicized "challenges" with Greece and the less publicized ones with Ireland, Spain & Portugal make those markets less attractive. As mentioned in last month's newsletter, China's Shanghai Index, for example, is trading below its 200-day moving average which often indicates that the decline is firmly entrenched. A recent story called "Cracks in the BRICs," referring to the Brazil, Russia, India and China, show that index trading below their 100-day moving averages. Shoreline's strategy of being diversified among asset classes (stocks, bonds, cash), diversified among industries, diversified globally and sticking with high quality investments only seems to be paying off based on performance returns referenced in the "Bottomline" column on the right.
While U.S. Treasuries continue to be attractive relative to other government bonds given the problems in Europe in particular, bond prices did decline as the expectation for rates going up increased along with the improving economy. The yield for 1-year Treasuries is only about .4%, for 5-year notes about 2.6%, for 10-year bonds about 3.9% and around 4.7% for 30-year bonds. Investment-grade municipals yield tax free income and are paying about .4%, 1.9%, 3.1%, and 4.5% for the the same time periods. Similarly, investment-grade corporate bonds are yielding .5%, 3.0%, 3.7% and 6.2%. Shoreline continues to recommend playing it safe and staying on the short-to-intermediate side of the yield curve. 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 Although there has been encouraging signs in the real estate market with prices stabilizing, the first three months of 2010 saw foreclosure filings rise 7%, to more than 930,000, compared with the previous quarter, according to the online foreclosure marketing firm RealtyTrac. That is a 16% jump over the first three months of 2009. Nevada had the highest foreclosure rate in the country for the 13th consecutive quarter with 1 out of 33 homes in foreclosure. Arizona had 1 for every 49 homes and Florida 1 for every 57. California 1 for every 62 with a total of more than 216,000 filings, more than any other state and 23% of the nation's total foreclosure activity. And it doesn't look much better for commercial real estate. Morgan Stanley, for example, announced it would likely take a $4.5 billion write-down on bad commercial property investments from around the globe - and that's just one company! This seems to suggest it will be a buyer's market for quite some time. |
| 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: Roth IRA |
What is special about Roth IRAs is that distributions may be income tax-free. However, contributions to a Roth IRA are made with after-tax dollars and no deduction is received for the contributions ... Full Story |
| Family Limited Partnerships: Disinheriting Uncle Sam |
Creating or updating a will and establishing a living trust will likely reduce probate time and costs after death. One way business owners can protect assets while alive is the establishment of a family limited partnership ... 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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