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| Shoreline Wealth & Investment Management |
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Newsletter
December 2004 |
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The Stock & Bond Markets - and the Record Low Dollar
It is worth discussing the impact on Wall Street of the record low dollar vs. the Euro and multi-year lows vs. many other country's currencies. With nothing on the horizon to stem the ever increasing budget and trade deficits, the dollar is likely to continue to be weak. One benefit is that overseas travel keeps getting cheaper (that is, if you're coming from overseas to the U.S.). A weak dollar puts upward pressure on interest rates (downward pressure on bond prices) and generally makes investing in the U.S. less attractive, an unfortunate situation since the U.S. has become increasingly reliant on the inflow of foreign capital to finance our escalating spending and debt requirements.
And as rates go up (see below commentary on real estate), both businesses and the consumer spend more on debt and less on consumption. While foreigners may travel here and bolster the hospitality industries, the situation is not favorable and portends poorly for the health of our economy.
Spiraling oil prices curtail spending and increase costs as well - it is worth noting that the price of oil isn't up in Europe because they pay for oil in Euros, not dollars - in other words, if the price of oil is up 40% in dollars but the value of the Euro is up 40%, then the cost to countries paying for oil with Euros hasn't changed. If our deficits and energy costs continue to escalate, unlike those of our competitors, then we are clearly working with a competetive disadvantage and upside to the markets without a major shift in policy is limited. Cheered up yet?
CELEBRATING 24 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 Bubble Burst - Part 4
Higher mortgage rates are beginning to slow demand. Refinancing loans are down 6.7% and loans for new homes are down 2.7%. If loan demand is a significant part of what drives the both the consumer spending and real estate prices, then both may slow.
| Selecting an Advisor |
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 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 has been recently updated by Jason Zweig who includes 16 key questions to ask your advisor and 11 an advisor might ask...
Read on... » |
| Alternative Investments |
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 Alternative assets classes, which include hedge funds, private equity, and real estate, among others, can be used to increase or protect assets from inflation ...
Full Story » |
| Estate Tax Update: Disinheriting Uncle Sam - Part 9 |
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 Estate tax schedule, sunset provisions ...
Learn More » |
| Looking for a Speaker for Your Event? |
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 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
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| The Bottom Line |
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| 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.
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email: cbloom@cfiemail.com
voice: 805.886.3624
web: http://www.swimllc.com/
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