Djia Historical Closing Values
Jersey Benefits Advisors summer 2007 newsletter
Market Watch
The Federal Reserve ended its meeting in June Federal Open Market Committee Meeting on 28 June and the only change noted for the foreseeable future is that the Fed considers core inflation as less of a risk, while overall inflation remains a concern. Interest rates remained at 5.25%, where they have been for a year, and investors expect a rate cut have capitulated. This delivery by bond investors has provided a slightly positive slope of the yield curve, and long term rates are slightly higher than short-term rates.
This leads me to believe there may be another way to see the inversion of the yield curve, what happened year. While many consider a reversal of the yield curve as a prelude to the recession, historically we have not had a recession every time you invest the yield curve. This last investment was before the economic slowdown in the first quarter of 2007, so perhaps the investment yield curve in 2006 indicating the slowdown that occurred mid-cycle earlier this year. The U.S. economy has been expanding since November 2001, so based the length of the last two cycles of the economy, the slowdown first quarter of 2007 was right in the middle of the cycle. However, it also should be noted that the last two U.S. business cycles was the records, which extends from November 1982 to March 1991 and March 1991 to November 2001 when looking from the bottom of one cycle to the bottom of the next cycle, or through the channel. There were 10 business cycles from 1945 to 2001, and the average time from valley to valley was 67 months. No one can say with certainty how long the current cycle will last, but considering all the blows delivered in the past five years, the economy has been very tough.
Of course, if the economy is growing, the stock market will react in a favorable way. Although the indexes are off highs set in the second quarter as the books were closed in the first half of 2007, the Dow Jones stood at 13,408.62, a gain 7.6% year to date. The Nasdaq closed at 2603.23 for a gain of 7.8% so far for 2007. The S & P 500 finished at 1503.35 representing an increase of 6.0% for 2007. While the S & P 500, a record close of 1539.18 of the fact that finally surpassed the previous record of 1,527.46 set in 2000 is an important technical achievement that bodes well for the continuation of the current bull market.
The consensus of economic forecasts for the second half of 2007 point to a GDP growth of between 2% -3%, which is what should be expected from an expansion matures. How much strength remains in the economy depends on a number of factors. Maintain healthy growth without rising inflation is essential. Although core inflation seems under control, price increases Food and energy are being felt by all. There is also great concern about the subprime mortgage market and collateralized debt obligations and obligations secured by a mortgage in which many hedge funds supply. With foreclosures on the market for subprime mortgages increased, which decreases the value of the CDO and CMO, there is the fear of many hedge funds could incur significant losses, such as Bear Stearns, as the value of their portfolios are rebalanced at the end of the quarter. As with most aggressive investment bets, when the fundamentals change, things can go south in a hurry. In my mind this is one more reason to diversify their assets rather than chasing returns.
Hype, Hope and the July 4 holiday
The Blackstone IPO and debut Apple iPhone were very strongly encouraged two events that took place in June. While Blackstone shares rose initially, which is now in the tender price original private equity houses begin to reassess the cost of doing bigger and bigger deals as the cost of debt increases. Apple faithful lined up against the stores for days before the launch of the iPhone, and even at a cost of $ 599, sales are expected to be fast. One can not help wondering how many people actually want to see video on their cell phones, especially with all the large plasma and LCD screens available for only a few hundred dollars more. Moreover, after the fourth of July fireworks could be good to relive the experience over and over again while sitting in traffic way home.
Privacy Policy and Rollover Assistance
In New Jersey and New Jersey Benefits Group Benefits Advisors, Inc. protect your privacy is very important for us. We want you to understand what information we collect and how we use it. We collect and use information from you on applications or other forms as well information on financial transactions with us and by unaffiliated third parties. This "nonpublic personal information" obtained in connection with providing a financial product or service to you.
We do not disclose any nonpublic personal information about you without your explicit consent, except as permitted by law. We may disclose nonpublic personal information we collect to persons or companies that perform services on our behalf. We restrict access to your nonpublic personal information and only allow disclosures to persons and companies as permitted by law to help provide products or services. Keep physical safeguards, electronic and procedural safeguards to protect your nonpublic personal information at all times.
Many people have 401k or 403b accounts of work that have left for various reasons. One problem with this is the duplication of objectives within each account. Having a lot of funds in several accounts, not always provide diversification to your goal.
If you or a family member in this situation, and would like to consolidate assets in a diversified IRA and receive only one statement, please give me a call to discuss bills, make recommendations and help with the paperwork involved. Provided when they have finished employment with the employer or the special plan has been completed, you are eligible to transfer the funds over to an IRA. You do not have to be of retirement age.
If you have withdrawn or are considering retirement, you have the option of moving assets employer plan into an account that can provide a lifetime income when you retire. The idea is to work with someone you trust and is available to you when you wish to discuss your account. Each employer plan is different, and every individual is different, so personal preference is very important, and there is no "one plan fits all."
Depending on your appetite for risk, IRA accounts can be in stocks, bonds, mutual funds or ETF with one or more companies. If you are somewhat risk averse, the share of variable annuities offer the market with downside protection and guaranteed growth for an additional charge. Do not hesitate to contact me to discuss your options.
About the Author
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit
http://www.johnkaighn.com
and
http://www.jerseybenefits.com
QualityStocks Daily Video 02/15/2007