Financial Tech

The Change in American Employment and Pay in State Government – The Guide Rock Capital Market Commentary – FT041

Confluences are the building blocks of the world’s waterways. When two or more rivers meet, changes in velocity and turbulence tend to result in geologic scouring; erosive activity that may alter the shape of the river and its bed. The action may produce a ‘scour hole’ downstream from the confluence. For a river runner, a hole creates “potential for trouble and the need for deft maneuvers.” America may be heading toward a scour hole that is being shaped by a confluence of factors and events, domestic and global, economic and demographic. Listen Mobile: Several of these factors were highlighted by last Friday’s employment report which showed unemployment has fallen to percent. This may seem like a positive development until you realize just 63 percent of working-age Americans have a job or are looking for one. According to The Washington Post, that’s the lowest workforce participation rate in 35 years. The change in American employment is rooted in the Great Recession and relatively slow pace of economic recovery, as well as a confluence of demographic trends. Younger Americans of working age are staying in school longer before looking for a job. In addition, and perhaps more importantly, the Baby Boom generation has begun to retire at a rate of about 10,000 a day or 300,000 a month, according to PBS NewsHour. America’s changing employment picture may be a significant challenge to economic growth, but other factors will influence the shape of our future, as well. Congress returned from recess on Monday. They may not get to all of it this week, but their agenda includes determining: America’s response to Syria, the government’s operating budget, the debt ceiling, and funding for the Affordable Healthcare Act. As if that weren’t enough, next week, the Federal Reserve will be making an important decision about tapering quantitative easing (which could be complicated by a potential government shutdown and debt ceiling expiration if Congress waffles). We live in interesting times. Data as of 9/6/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) NA Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index   Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. IN 1835, IN DEMOCRACY IN AMERICA, ALEXIS DE TOCQUEVILLE SAID: “AMONG the novel objects that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of condition among the people… it gives a peculiar direction to public opinion and a peculiar tenor to the laws; it imparts new maxims to the governing authorities and peculiar habits to the governed… The more I advanced in the study of American society, the more I perceived that this equality of condition is the fundamental fact from which all others seem to be derived and the central point at which all my observations constantly terminated.” One wonders what he would make of the difference in pay between lawmakers in various states today. A recent chart published in The Economist showed pay for state legislators ranges from nothing in New Mexico, where the median household income from 2007 through 2011 was about $44,600, to more than $90,500 in California where the median household income was about $61,600 during the same period. If you believe having a greater number of legislators means the opinions of the masses are better represented, then it would seem citizens in states that pay lawmakers more are less well represented. The average number of legislators per million people in the 10 states that pay the most is about 22. In the 10 states that pay the least, it’s about 112 per million people. The exceptions appear to be Alaska, which pays about $50,000 a year and has about 82 legislators per million people, and Texas which pays less than $10,000 and has about 7 legislators per million. The Economist pointed out lawmaking may be less costly in other ways, too, in states that offer lower salaries to policymakers. As it turns out, about one-third of state legislatures are part-time. States like Texas, Montana, Nevada, and North Dakota, where lawmakers meet every second year, tend to spend less than states where legislators meet more frequently. Weekly Focus – Think About It “Democracy cannot succeed unless those who express their choice are prepared to choose wisely. The real safeguard of democracy, therefore, is education. —Franklin D. Roosevelt, American President Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network
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Financial Tech

How Uncertainty Affects the Market and the European Economy – The Guide Rock Capital Market Commentary – FT038

Robert Burns, father of fourteen and writer of Auld Lang Syne, once said, “There is no such uncertainty as a sure thing.” Was he ever right! Here are a few sure things: · The Federal Reserve intends to reduce economic stimulus by tapering quantitative easing (QE). · Federal Reserve Chairman Ben Bernanke plans to retire. · Gross Domestic Product (GDP) growth was positive in Europe during the second quarter. Listen Mobile: Here are some of the uncertainties which may arise from them: · When will QE begin to end? How will changes in the program affect world economies and markets? · Who will be the new Fed chairman? What policies will be pursued? · Was the second quarter a turning point for the Euro area economy? Is Europe moving out of recession? How has uncertainty affected things? Well, it has left Treasuries a whole lot less popular than they once were. China and Japan reduced their holdings of Treasuries by about $40 billion recently. According to Reuters, a Chinese economist said the sale of Treasuries could be attributed to expectations that bond yields will rise and prices will fall as QE ends. In the same article, a Japanese policymaker said expectations about changing Fed policies created market volatility that forced some Asian central banks to defend their currencies and that led to the sale of Treasuries. In total, about $67 billion of foreign investment money was pulled out of Treasuries in June. Uncertainty didn’t do much for American stocks, either. At the end of last week, most major stock markets had moved lower. Data as of 8/16/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) NA Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. IS IT THE BEGINNING OF THE END? MAYBE… Last Tuesday, Eurostat, which provides statistical information on the European Union (EU), announced that its flash estimate showed positive economic growth (up percent) for the Euro area for the second quarter. Media outlets embraced the news with tremendous enthusiasm and some informed the world that Europe was, once again, on its feet. · Euro Zone Emerges from Recession – The Wall Street Journal · Euro Zone Exits Longest Recession in Over 40 Years – CNBC · Germany, France Haul Euro Zone Out of Recession – Reuters While it’s possible the second quarter will prove to be a turning point for Europe’s economy, the headlines were a bit rash. Perhaps the blog, written by Ollie Rehn, European Commissioner for Economic and Monetary Affairs, should have been read before crafting their headlines. Rehn wrote: “Add today’s quarterly GDP figures to other recent positive survey data and you will find reasonable evidence suggesting the European economy is gradually gaining momentum… I hope there will be no premature, self-congratulatory statements suggesting “the crisis is over.” For we all know that there are still substantial obstacles to overcome: the growth figures remain low and the tentative signs of growth are still fragile; the averages hide important differences between Member States… So there is still a very long way to go before we reach our ultimate goal of a sustainable growth model that delivers more jobs.” Officially, the end of the Euro area recession will be determined by the Centre for Economic Policy Research (CEPR). This organization is similar to the National Bureau for Economic Research (NBER) in the United States. In both regions, business cycle dating is a tricky business. The CEPR assesses GDP and other factors, such as the components of output and labor market data when determining the start and end dates for recessions and expansions. One of the biggest hazards to cycle dating is data revision so you can be sure the CEPR will be paying attention when Eurostat issues revised second quarter numbers in early September. Weekly Focus – Think About It “True friendship is a plant of slow growth, and must undergo and withstand the shocks of adversity, before it is entitled to the appellation.” —George Washington, President of the United States Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network
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Financial Tech

European Unemployment and Moderate vs Modest – The Guide Rock Capital Weekly Market Commentary Aug 5 – FT037

You say to-may-to. I say to-mah-to. You have to be a careful reader to keep up with the Federal Reserve these days. Last week, the Fed re-characterized the pace of economic growth in the United States from ‘moderate’ to ‘modest.’ According to Wall Street Journal blog, Real Time Economics, “economic data show that ‘modest’ is a touch weaker than ‘moderate.’” No matter how you parse the difference, it was enough to prevent the Fed from beginning to normalize monetary policy by cutting back on bond buying. Listen Mobile: The Fed indicated that labor market concerns were a key reason for continuing quantitative easing (QE) at current levels. Investors at home and in emerging markets appeared to think that employment concerns and less robust economic growth in the United States were okay, as long as quantitative easing continued. Major stock markets finished the week higher, while stocks in commodity-driven emerging countries, and those with significant current account deficits, also moved higher, in general. Americans looking for good-paying jobs may be less enthusiastic about the reasons for the Fed’s constrained outlook. According to The Daily Ticker, a recent analysis found that almost two-thirds of the jobs created during the first half of 2013 were in the lowest paying sectors of the economy, and provide income of about $ an hour, on average. When you multiply that hourly rate by 2,080 (the number of hours in fifty-two 40-hour work weeks), it comes out to about $32,000 a year. That may help explain why the median household income in the United States has fallen from about $54,500 in June 2009 (the start of the current economic recovery) to about $52,098 in June 2013. Here’s another interesting difference to ponder as you think about the near future — a future in which many expect China to be an important growth engine. Last week, that country’s manufacturing purchasing indexes were released.  The official Purchasing Managers’ Index (PMI), which includes bigger firms, rose to in July from in June. Any reading above 50 indicates expansion. The unofficial index, compiled by Markit and HSBC index, which tracks smaller firms, fell to from for the same period. Any reading below 50 indicates contraction. Data as of 8/2/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) N/A Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. YOU’VE SEEN ‘EM — TELEVISION MAKEOVER SHOWS LIKE WHAT NOT TO WEAR AND THE BIGGEST LOSER. By the end of the installment or the series, lives have been changed, presumably for the better. It remains to be seen whether Europe’s current makeover — a migratory one — will change lives for the better. Unemployment is a key issue behind Europe’s makeover. According to Eurostat, unemployment in the EU-27 was at almost 11 percent in June 2013. That was slightly lower than May of 2013, but higher than June of last year. When you delve deeper into Europe’s unemployment, it’s clear that the problem is more pronounced in periphery countries, which typically are southern European. In March, unemployment in Germany (a core country) was about 5 percent, while in Greece and Spain (periphery countries) it was almost 27 percent. Among younger populations, unemployment is even higher. In February 2013, 64 percent of young people in Greece were unemployed and 56 percent of those in Spain. This statistic is somewhat skewed because many younger people are in school. Seeking greener pastures, citizens of many periphery countries have begun to emigrate. According to The Economist, a study by Real Instituto Elcano found that almost three-fourths of Spaniards under the age of 30 have considered moving abroad. Two percent of Portugal’s population has departed during the past two years, and a record 3,000 people are leaving Ireland each month. The destination of choice for many has been Germany. According to The Economist, the exodus could exacerbate problems in high-debt countries: “Labor is one of the main inputs to growth, and a reduction in the size of the underlying labor force through migration will shrink potential output across the periphery, making existing debt loads harder to bear. This could be especially bad if young workers are the ones leaving. That would worsen the dependency ratio as well; there would be fewer potential taxpayers in Spain and Italy to pay for the benefits flowing to a rapidly growing population of pensioners. The greater these migratory flows, the worse the fiscal outlook for the periphery.” As with any makeover, it’s difficult to know whether the end result will be positive or lasting, but one thing is likely. The European Union is going to look different in the future. Weekly Focus – Think About It “When we are no longer able to change a situation — we are challenged to change ourselves.” — Viktor E. Frankl, Austrian neurologist and psychiatrist Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network
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Financial Tech

The International Monetary Fund (IMF) Fiddles while the US Markets Rocket Forward – Guide Rock Weekly Market Commentary Jul 15 – FT035

One of these things is not like the other… If you find yourself humming that old Sesame Street standard when you think about financial markets and world economies, you’re probably not alone. To the consternation of many, the Dow Jones Industrials Average and the Standard & Poor’s 500 Index rocketed to new highs last week just as the International Monetary Fund (IMF) cut its global economic growth forecast for 2013 and 2014. Listen Mobile: Many in the media pointed fingers and announced, “That’s the problem right there!” Of course, the fingers were pointing at Ben Bernanke and the Federal Reserve which continued to dither about Quantitative Easing (QE) last week. While it may feel good to lay blame, the Fed is just one tree in the forest of market volatility and economic growth. Let’s take a look at another section of the forest: emerging markets. They are expected to power 60 percent of the world’s economic activity by 2030. Yet, just last week, China’s exports slumped, and Brazilian and Indonesian central banks raised interest rates (which generally slows growth). Turkey’s central bank may do the same next week. Is slowing growth in emerging markets the Fed’s fault? While higher rates in the may hurt emerging markets, many of those countries have problems of their own, including infrastructure bottlenecks and excessive credit expansion. Last March, the Financial Times quoted Deutsche Bank strategist John-Paul Smith who wrote: “We believe that 2013 will mark the year when economists and investors focus on the underlying imbalances within the Chinese economy and, accordingly, reduce their expectations of sustainable growth over the medium term. The deterioration in the perception of China is likely to have a very disruptive effect on (global emerging market) equities…” Smith’s forecast proved out. Early last week, the International Monetary Fund (IMF) lowered expectations for China’s growth to the high-seven percent range. Of course, it’s not easy to predict the future. Irrefutable evidence of that arrived a few days after the IMF’s report when Lou Jiwei, China’s Minister of Finance, said his country’s growth rate could fall to percent or even lower. Economists gasped. China’s official growth target (set by the National People’s Congress) is percent, not percent or lower. According to The Wall Street Journal, “Such a sharp downshift in China’s growth would send ripples around the world economy, hitting everything from iron-ore demand in Australia to sales of luxury handbags in Hong Kong stores.” Data as of 7/12/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) N/A Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. IN AMERICA, PEOPLE ARE STILL PULLING THEMSELVES UP BY THEIR BOOT STRAPS. Three-fourths of the folks who participated in the2013 Trust Insights on Wealth and Worth (all of whom have $3 million or more in investable assets) made their money the old fashioned way. They worked, owned businesses, and/or invested. Most believe they’re financially secure and feel confident about the future. While that proved true for many aspects of financial planning, the study uncovered some unrecognized risks, many of which have been created by a volatile investment environment and changing tax laws. They include: Incomplete retirement planning. Although the vast majority of those surveyed are very confident about having the income they need during retirement, many have overlooked factors which affect income and assets such as lifestyle expectations, out-of-pocket healthcare expenses, long-term care costs, and others. Financial support for extended family. Almost one-half of those surveyed provide significant support to members of their extended families (including parents, in-laws, siblings, and grown children). However, the majority have not included that fact in their financial plans. Conflicted emotions about investing. The majority of survey participants said growing assets is more important than preserving them today; however, they also said lowering risk is a higher priority than pursuing higher returns. Tax law changes. A majority of wealthy people do not understand the ways in which tax law changes may affect their income, investments, or estates. Few understand the tax strategies which may be available to them. Weekly Focus – Think About It “Tell me and I forget. Teach me and I remember. Involve me and I learn.” —Benjamin Franklin, inventor and statesman Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network
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Financial Tech

Second Quarter Recap and Women in the Workforce – Guide Rock Weekly Market Commentary Jul 8 – FT034

The second quarter offered a level of drama often found in homes with teenagers. When investors realized their good friend, quantitative easing, might have an earlier-than-expected curfew, they threw a hissy fit that resounded through global markets. The outburst interrupted the trajectory of Standard & Poor’s 500 Index, which finished June lower after hitting record highs in May. As stocks fell, yields on the benchmark 10-year Treasury bond hit a 22-month high. Listen Mobile: Higher treasury yields and a strengthening greenback proved attractive to investors and capital flowed out of emerging markets during the quarter. As interest rates moved higher, the cost of borrowing rose sharply in many emerging countries. That may impede economic growth, which has slowed already, in many developing countries. Economies in emerging Asia, Latin America, and Europe grew by about 4 percent on average year-on-year during the first quarter as compared to percent on average during the past decade. When compared to growth rates in developed countries, such as the European Union (EU), that’s still a pretty attractive growth rate. The EU has suffered seven consecutive quarters of recession. It’s hard to say the recovery is going well, but experts are hopeful because the Spanish economy is contracting at a slower rate, Italian business activity isn’t declining as fast as it once did, the French downturn is moderating, and the German economic growth is in positive numbers. It’s a different story in the United States. By the end of second quarter, economists were predicting 2014 could prove to be the best year for economic growth since 2005. The Wall Street Journal’s monthly survey found that, “Economists… expect gross domestic product to expand at a percent annual pace this year and percent next year. The Federal Reserve edged up 2014 growth forecasts to between 3 and percent, from a March estimate of to percent.” Encouraging economic signs include: · Housing market vigor: Experts say housing market strength will be critical to economic performance in the second half of the year. · Employment gains: Unemployment has dropped from double-digits to percent, although there are still about million fewer jobs than there were before the recession. · Confident consumers: After years of paring spending and paying down debt, Americans are feeling optimistic. Consumer confidence now stands at a five-year high. While optimism about the American economy is good news, it’s important to remember world economies are like members of a family. What happens to one country or region often has a significant influence on what happens in the others. Data as of 7/5/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) N/A Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. SHE CAN BRING HOME THE BACON AND FRY IT UP IN A PAN… From 1960 through 2011, the percentage of households with children under the age of 18 and mom as the primary or sole breadwinner increased from 11 to 40 percent. According to the Pew Research Center report, ‘Breadwinner Moms’ fall into two distinct groups: married moms who earn more than their husbands (37 percent) and single mothers (63 percent). The earnings gap between the two groups tends to be very large: “The median total family income of married mothers who earn more than their husbands was nearly $80,000 in 2011, well above the national median of $57,100 for all families with children, and nearly four times the $23,000 median for families led by a single mother.” It’s interesting to note an educational gap has been developing between husbands and wives, as well. A growing proportion of married women are better educated than their husbands. According to Pew Research, “the share of couples in which the mother has attained a higher education than her spouse has gone up from 7 percent in 1960 to 23 percent in 2011.” This probably shouldn’t be a surprise since more women than men have been receiving college degrees of all types – associates, bachelors, masters, and doctorates – every year since 1982. Perceptions about women’s roles in both the workplace and the family appear to be changing, too. According to another Pew report, almost three-fourths of American adults say having more women in the workforce has been a change for the better. About 60 percent say family life is more satisfying when both spouses work and they share responsibility for housework and child care. Weekly Focus – Think About It “If we become increasingly humble about how little we know, we may be more eager to #8221; —Sir John Templeton, Global investing pioneer Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network
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Financial Tech

The Markets Hate the Slowing of Quantitative Easing and The Value of Renewable Energy in the US: Guide Rock Weekly Market Commentary Jun 17 – FT032

Like a host at a dinner party, the International Monetary Fund (IMF) put the performance of the economy on the table last week to be gnawed over by world markets. When the IMF presented its annual review of the world’s largest economy, it stated that: “Despite some improvements in economic indicators, particularly in the housing market, the very rapid pace of deficit reduction… is slowing growth significantly… growth is expected to slow to percent in 2013, from percent in 2012. This projection reflects the impact of the sequester ($85 billion of automatic government spending cuts), and the expiration of the payroll tax cut and the increase in tax rates for high-income taxpayers…Growth could pick up to percent next year with a more moderate fiscal adjustment and a further strengthening of the housing market.” Listen Mobile: The IMF also said the Federal Reserve should continue quantitative easing through 2013. It was not the only one pondering the Fed’s quantitative easing program. The major stock market indices finished the week lower. The Dow Jones Industrials Average fell percent last week, the Standard & Poor’s 500 Index was off by 1 percent, and the NASDAQ dropped percent. Remarkably, the Dow experienced four straight days of triple-digit swings. The next Federal Open Market Committee Meeting is on June 18 and 19. While few people expect the Fed to announce it will reduce the pace of bond buying immediately, the majority of economists surveyed by USA TODAY predict the Federal Reserve will begin to reduce bond purchases by early fall. Data as of 6/14/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) N/A Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable. ARE EMERGING COUNTRIES LEADING THE WAY IN RENEWABLE ENERGY? It seems that way sometimes. According to UNEP’s report, Global Trends in Renewable Energy Investment 2013, “Renewables are picking up speed across Asia, Latin America, the Middle East, and Africa, with new investment in all technologies… Markets, manufacturing, and investment shifted increasingly towards developing countries during 2012.” For instance, after running even with the United States during 2011, China became the dominant country for renewable energy investment in 2012, according to the report. This doesn’t mean the United States isn’t in the race. According to The Economist, an analysis by Bloomberg New Energy Finance found the and China traded about $ billion in solar, wind, and smart-grid technology and services during 2011. America sold about $ billion more to China than it imported. The Economist concluded, “American ingenuity is required to supply Chinese factories with such things as polysilicon and wafers for photovoltaic cells, and the fiberglass and control systems used in wind turbines.” So, what does the future hold? Kiplinger’s Letters said solar power production will double in 2013 and move ahead of geothermal power as a source of clean energy. They believe wind energy will soon rival hydroelectric power, as well. The United States added more wind power capacity last year than any other type of power generation. Currently, wind comprises about 5 percent of power generated in the United States. Global investment in renewable energy may have fallen during 2012, but that doesn’t mean the industry has lost momentum. Renewable energy is gaining share in a growing number of countries and regions, including the European Union where renewable energy – primarily solar and wind power – accounted for about 21 percent of electricity consumption in 2011, and almost 70 percent of new electric capacity in 2012. Renewables just may prove to be the tortoise in the energy race. Weekly Focus – Think About It “It is not in the stars to hold our destiny, but in ourselves.” —William Shakespeare, English poet and playwright Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network Intro and Exit Music from “Motion” by Adelaide.  Hear more great tunes at 
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Financial Tech

Markets Wobble on Quantitative Easing, Are the Markets like Sports? Guide Rock Weekly Market Commentary Jun 10 – FT031

Like a funhouse mirror, investors’ concerns about whether and when the Federal Reserve will begin to end its quantitative easing program contorted market responses to economic news last week. Unexceptional economic reports were treated as good news and pushed stock markets higher; strong economic reports were treated as bad news and pushed stock markets lower. Listen Mobile: Markets headed south mid-week, but responded positively to the May jobs report. It was a Goldilocks report – neither too weak nor too strong – which showed the Labor Department added slightly more jobs than expected in May. Apparently, investors thought the increase was not large enough to spur the Federal Reserve to early action on quantitative easing, and stock markets finished the week higher. The Dow Jones Industrial Average was up percent, the Standard & Poor’s 500 Index gained percent, and the NASDAQ rose percent. Uncertainty about the future of quantitative easing has created volatility in bond markets during the past few weeks. Concerns the Fed could begin tapering sooner rather than later, triggered a sharp increase in bond yields during that period. In addition, several new offerings in the municipal bond market – issued by cities and states, municipal bonds typically are exempt from federal tax – have been scaled back or postponed because of market uncertainty. If concerns about the end of quantitative easing continue to dominate, it’s possible markets may continue to respond to economic news in unexpected ways. So, what’s on deck for next week? Economic news should include the May retail sales report, initial June consumer sentiment reading, and inflation data.   Data as of 6/7/13 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor’s 500 (Domestic Stocks) 10-year Treasury Note (Yield Only) N/A Gold (per ounce) DJ-UBS Commodity Index DJ Equity All REIT TR Index Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, , London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.   Is Investing in the Stock Market More Like Golf or Tennis? Every sport has a certain way to measure performance. For example: · Running is based on time. · The high jump is based on feet and inches. · Football and basketball are based on points. · Baseball is based on runs. · The decathlon is based on the cumulative score from 10 different events. So, how do we measure success as an investor? A recent report from Invesco used golf and tennis as an analogy for how to win as an investor. The report pointed out tennis is scored using match play, meaning your performance is measured at intervals along the way.(1) You can win games, which leads to winning sets, which leads to winning the match. In effect, tennis players have to win along the way in order to win at the end of the match. By contrast, golf is scored using stroke play, meaning it doesn’t matter who wins any particular hole. Rather, the winner is determined by who has the lowest cumulative score at the end of the round or match. Despite their different scoring systems, people who win at golf and tennis still need to perform somewhat consistently throughout their performance. Tennis players can’t play great for 3 games and then poorly in 4 games and still win the set. Likewise, golfers who triple bogey 12 holes and birdie 6 holes probably won’t win the club championship. Now, before we can determine whether winning as an investor is more like golf or tennis, we have to define what “winning as an investor” means. Simply put, we can define winning as an investor to mean you’ve achieved your financial goals within the timeframe you’ve identified and at a risk level that was acceptable to you. Using that definition, winning as an investor is more like winning at golf than tennis. In golf, the winner is determined at the end of the round or match and who won each individual hole does not matter. Likewise, a winning investor “wins” when they’ve achieved their goals by the end of the specified period. Of course, real life investing is not so neat and tidy. Just like golfers sometimes take a triple bogey, the stock market sometimes takes a big drop. And, while nobody likes to see these declines, it’s important to understand they will happen. In addition, golfers are sometimes tied at the end of a tournament so they have to play extra holes. Similarly, the financial markets occasionally experience extended declines which may mean it will take investors longer to reach their goals than originally planned. Consider this, too: golfers have numerous clubs in their bag they can use depending on how far they are from the hole, their lie, and any obstacles that may be in their way (, a tree). On the tee at a par 5 hole, for example, a golfer might take out a driver because they have a long way to go. Likewise, for clients who are a long way from retirement, we might more heavily weigh equities in an effort to pursue a greater return. Conversely, a golfer on the green facing a 3-foot putt would pull out a putter instead of a driver while accepting more risk. Likewise, if you’re in retirement, there are certain asset classes with risk and return characteristics that may be more suited to your portfolio than a heavy allocation to equities. Golf, tennis, and investing have a lot in common. They can all be played competitively and competitive people like to keep score and win. As a “competitive” advisor, we do our best to “win” the investment game on your behalf so you can spend more of your time doing what you enjoy the most… which might include golf or tennis! (Investing in securities is subject to market fluctuation and possible loss of principal.  No strategy assures success or protects against loss.) Weekly Focus – Think About It “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” —Maya Angelou, American author and poet Best regards, ANDREW HUNT CFP® President of Guide Rock Capital Management, Inc. 1001 Gallup Drive Omaha, NE 68102 Communication | Woo | Achiever | Ideation | Relator   Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added. Securities offered through Shareholders Service Group, Member FINRA/SIPC. * This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. * The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association. * The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Past performance does not guarantee future results. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision. Jim’s Twitter: #!/jcollison Andrew’s Twitter: #!/AndrewDHunt Andrew’s Blog: Contact the show at Find this and other great Podcasts from the Average Guy Network at Visit the new Facebook page for the The Average Guy Network Intro and Exit Music from “Motion” by Adelaide.  Hear more great tunes at 
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