• 450 likes • 523 Views
Half-Time 2012. July 26, 2012 Portsmouth Country Club. Agenda. Exercise Your Brain Year-To-Date Market Review What to Watch the Rest of the Year Current Environment in Historical Context Words of Investing Wisdom. Questions. Are Always Welcome. Exercise Your Brain.
E N D
Half-Time 2012 July 26, 2012 Portsmouth Country Club
Agenda • Exercise Your Brain • Year-To-Date Market Review • What to Watch the Rest of the Year • Current Environment in Historical Context • Words of Investing Wisdom
Questions Are Always Welcome
Exercise Your Brain
Exercise Your Brain How many times must you shuffle a deck of 52 playing cards in order to ensure it is truly scrambled? a) 5 b) 7 c) 9 d) 10 Source: http://online.wsj.com/article/SB10001424052970204826704577074501731476934.html?mod=WSJ_LifeStyle_Lifestyle_5
Exercise Your Brain If the world’s 7 billion people stood shoulder to shoulder, which of the following geographic areas is the smallest that could accommodate them? a) Zanzibar (about 650 square miles) b) Maui (about 727 square miles) c) Rhode Island (about 1,033 square miles) d) Sicily (about 9,925 square miles) Source: http://www.economist.com/node/21533364
Exercise Your Brain Which state has the longest coastline? a) California b) Alaska c) Florida d) Texas Source: http://www.factmonster.com/ipka/A0770175.html
Exercise Your Brain What country has the greatest number of active volcanoes? a) United States b) South America c) Japan d) Indonesia Source: http://www.scholastic.com/teachers/article/general-facts-about-volcanoes
Year-To-Date Market Review
Year-To-Date June 30, 2012 Market Review Domestic Stocks(1) 8.3% Foreign Stocks(2) 1.1% Gold 1.5% U.S. Dollar Index 1.8% 10-year Treasury Yield 8.3% Commodities(3) 3.7% Oil 14.0% Spain(4) 17.1% Sources: Yahoo! Finance; Barron’s; djindexes.com, London Bullion Market Association, WSJ. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. 1) S&P 500, 2) DJ Global ex US, 3) DJ-UBS Commodity Index, 4) IBEX 35
European Interest Rates European Rates Have Diverged Source: European Central Bank, Stefano Micossi
European GDP Bail out Bail out Bail out Bail out Bail out
U.S. Growth is Moderate Source: U.S. Department of Commerce
Still Missing 4.6M Jobs 4.3 mm Jobs Gained Source: Federal Reserve Bank of St. Louis
What to Watch the Rest of the Year
S&P 500 Corporate Earnings 2012 9.6% 2011 15.2% 2013 12.4% Estimate Actual 2010 44.9% Source: Zacks
Inflation Under control… for now. Source: Lacono Research
Home Sales The recent trend is up.
Small Business Optimism Small business owners are more optimistic.
Unemployment Rate Heading in the right direction.
Budget Mix Revenue: $2,456bn (68%) Source: Congressional Budget Office
“A budget tells us what we can't afford, but it doesn't keep us from buying it.” --William Feather
Current Environment in Historical Context
Consumer Debt Strong Stock Market Weak Stock Market Source: Federal Reserve Bank of St. Louis
Corporate Profits as % of GDP 10.1% 50-yr. avg.: 6.2% Source: Bureau of Economic Analysis
Employment as % of Total Population Source: Federal Reserve Bank of St. Louis. 58.4% 1983
Wages as % of GDP Source: Federal Reserve Bank of St. Louis.
Reason for Optimism Source: Washington Post
Words of Investing Wisdom
Words of Investing Wisdom “Look at (market) fluctuations as your friend rather than your enemy—profit from folly rather than participate in it.” --Warren Buffett
Words of Investing Wisdom “If you watch a basketball game and at the end of the game the score is 105 to 95, no one says, wait a second, in the third quarter, you lost 28 to 18, what was the story in the third quarter?” --Peter Lynch
Words of Investing Wisdom “In the stock market, the only way to get a bargain is to buy what most investors are selling.” --Sir John Templeton
Words of Investing Wisdom “It is learning to listen to the gloom and doom at bottoms and question it, and to the exultation at tops and question this as well, that makes a sharp investor.” --Jim Rogers
Summary • Deleveraging is a long, drawn-out process • Europe is a wildcard • The U.S. is still a great country
Thank You For Your Continued Support! The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is not a guarantee of future results. All indices are unmanaged and cannot be invested into directly. Securities and advisory services offered through LPL Financial, a Registered Investment Advisor,. Member FINRA/SIPC