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Shoreline Wealth & Investment Management
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The Stock & Bond Markets Lucky 13? The stock market's 13-month rally may be a new trend and, as they say, "the trend is your friend." Or, a variety of conflicting economic data may give investors a reason to pause and take some money off the table. The strength of the rebound over the past 3 quarters was less than the 7.5% gain seen during the 1981-1982 recovery, the last slump lasting more than a year. Consumer spending, while rebounding nicely from the lows reached last year, is unlikely to be as strong as it was in the 1980s or 1990s although it did increase by 3.6%, the fastest pace in 3 years. Although consumer sentiment dropped to a reading of 72.2 from March's 73.6 score, it still reflects optimism. The last important gauge is the Institute for Supply Management's business barometer which rose to 63.8, the highest level since April 2005. And so there's no shortage of domestic good and bad news. Meanwhile, China continues to chug along and Europe is mired in a deep debate about the struggling economies of Greece, Spain, Portugal and Ireland as well as the correct approach moving forward to preserve the Euro. Our advice continues to be diversify, diversify, diversify.
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 2.5%, 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 .3%, 1.8%, 3.0%, and 4.4% for the the same time periods. Similarly, investment-grade corporate bonds are yielding .5%, 2.9%, 3.6% and 5.9%. 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 After 8 consecutive increases, the S&P Case-Shiller Index dropped in February and Robert Shiller, co-founder of the index, stated it was "within the realm of possibility" that housing prices could find "a new bottom." Part of the problem is the seemingly endless supply of homes on the market. March numbers were a little more favorable, both for new and existing home sales which both posted increases in volume. The excess supply combined with growing demand at low prices and mortgage rates may result in a flat market until that excess supply is removed from the market. |
| 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 Stock Market Investing |
Stocks are one form of business ownership. Although most investors are owners of this investment category directly or through mutual funds, not everyone understands how they work (other than seeming to go down immediately after you buy them) or "classes" of stock ... Full Story |
| Gifting: Disinheriting Uncle Sam |
There are many strategies for gifting, one of the many effective ways to transfer wealth before the government gets to share in the estate you have created ... 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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