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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Financial Tech

Quantitative Easing, the Consumer Financial Protection Bureau (CFPB) is it Good or Bad and What is the Best Index to Follow? Guide Rock Weekly Market Commentary Jun 3 – FT030

The Fed will taper… the Fed will not… the Fed will taper… the Fed will not… Last week, investors and traders obsessed about the Federal Reserve and the possibility it might begin to end its quantitative easing program. The Fed began its first round of quantitative easing during the financial crisis in an effort to prop up the American economy. In general, quantitative easing helps increase money supply and promote lending and liquidity. Investors’ fears about what may happen when the program ends were apparent when, despite abundant positive economic news, major stock markets lost value last week. Listen Mobile: On Tuesday, after the Memorial Day holiday, the Standard & Poor’s Case-Shiller home price index posted its biggest gain in seven years. Housing prices increased in every one of the 20 cities it tracks. stock markets initially responded positively to the news. However, it wasn’t long before investors began to worry that stronger housing prices might speed up the Fed’s timetable for quantitative easing, and stock markets moved lower on Wednesday. On Thursday, weaker-than-expected economic data – first quarter gross domestic product (GDP) growth for the United States was revised downward from percent to percent – pushed markets higher. On Friday, positive news – the Thomson Reuters/University of Michigan index of sentiment showed consumer confidence had reached its highest level in six years – caused markets to move lower. stocks generally finished higher for the month of May despite last week’s performance. The Dow Jones Industrial Index gained percent, the Standard & Poor’s 500 Index rose by percent, and the NASDAQ was up percent. Treasuries, however, delivered their worst monthly performance since 2010. During the last four weeks, yields on 10-year Treasury notes rose from percent to percent – an increase of 50 basis points. Data as of 5/31/13 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.   SOME SAY THE CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) unnecessarily limits consumers’ choices and is not subject to sufficient oversight; others say it protects consumers from unethical business practices and unnecessary financial hardship. Regardless of the hoopla surrounding it, consumers have begun turning to the CFPB for help. The CFPB is funded by the Federal Reserve and operates independently of Congress which is one reason some believe it does not have sufficient oversight. According to the CFPB’s web site, its purpose is: “Above all… ensuring that consumers get the information they need to make the financial decisions they believe are best for themselves and their families – that prices are clear up front, that risks are visible, and that nothing is buried in fine print. In a market that works, consumers should be able to make direct comparisons among products and no provider should be able to use unfair, deceptive, or abusive practices.” From July 2011 (the date the CFPB became effective) through February 2013, the CFPB had received and worked to address more than 131,000 consumer complaints, including 5,000 issues raised by members of the military, veterans, and their families. The complaints typically are related to mortgages, credit cards, bank accounts and services, private student loans, consumer loans, and credit reporting. According to a recent article in Barron’s, the CFPB is: “…Progressing in its original mission of reducing predatory lending by mortgage and auto lenders, credit-card issuers, and other consumer-finance outfits… So far, the agency has forced financial institutions to repay $425 million to consumers, and tackled bias in auto loans made by finance companies via car dealers. The CFPB has formulated tighter mortgage-lending rules that are being challenged in Congress. The bureau is about to begin regulating an estimated 22,000 payday offices.” For banks and financial firms, complying with CFPB rules may require operational makeovers and the not-insignificant expenses which may accompany them, according to American One financial institution spent 900 hours analyzing how its mortgage operations, servicing, collections, and legal compliance measured up to CFPB rules. Then it modified its systems, processes, and training programs (or created new ones) to ensure it would remain in compliance. One outcome was the firm’s compliance team grew from four to 17 employees. So, what is the CFPB? Is it an overreaching compliance nightmare or an effective consumer watchdog? Only time will tell. Weekly Focus – Think About It “The optimist thinks this is the best of all possible worlds. The pessimist fears it is true.” —J. Robert Oppenheimer, American theoretical physicist 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

University of Michigan’s Consumer Sentiment Survey and Phenomenon Called Heuristics – Guide Rock Weekly Market Commentary May-20 FT029

Much like elementary school children trying to capture the attention of someone they have a crush on, the American economy sent lots of mixed signals last week. Conflicting reports emerged about consumer sentiment during the week. The Conference Board, a non-profit research organization, reported consumers remained somewhat pessimistic about the direction of the economy. In contrast, the University of Michigan’s consumer sentiment survey rose to a six-year high, according to ABC News. The Index moved from in April to in May indicating consumers are feeling more confident about the economy. Listen Mobile: On the employment front, more people filed first-time unemployment claims last week than had filed the week before; however, claims remained well below the levels experienced from mid-2008 to 2011. Additionally, data shows during the past six months the average length of unemployment has dropped, the number of hours worked has risen, and earnings have increased. Messages from the Federal Reserve were more consistent than economic data. Members of the Philadelphia, Dallas, and San Francisco Federal Reserve Banks suggested it may be time to begin slowing quantitative easing. Currently, the Federal Reserve’s quantitative easing efforts have it buying about $85 billion of Treasuries and mortgage-backed securities each month as it works to support the economy. According to reports, quantitative easing could slow to a stop during 2013. Fed comments helped push yields on 10-year Treasuries higher for the week. Stock markets remained undaunted by uncertain economic conditions and the prospect that quantitative easing may end soon. The Dow Jones Industrial Average and the Standard & Poor’s 500 Indices surged to new highs last week. Markets rallied across the pond, as well, with some major European stock indices reaching levels last seen five or more years ago, according to Reuters. Data as of 5/17/13 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. HEURISTIC IS JUST ANOTHER NAME FOR A SHORTCUT. When academics look to psychology and economics to explain why people make financial decisions the way they do, it’s called behavioral finance. This field of study describes a phenomenon called “heuristics.” In general, a heuristic is a mental shortcut that lets someone solve a problem using a rule of thumb. Heuristics may be handy, but they may not take you exactly where you mean to go. For example, consider some of the shortcuts investors have developed to predict the direction of the stock market. You may have heard of the: Hemline Index: In 1926, George Taylor suggested the length of women’s skirts was a useful market predictor. Short hemlines were a positive predictor while long hemlines were a negative predictor. Taylor later became Professor of Industrial Relations at Wharton and became known as the father of American Arbitration. Super Bowl Indicator: Washington and Lee professor George Kester introduced the idea the Super Bowl winner could predict market performance. His theory was the market would move higher for the year when an original National Football League team won the Super Bowl and lower when an original American Football League team won. Presidential Election Cycle Theory: The idea behind this gem is the stock market follows a predictable pattern during each American President’s term. The year after an election produces the weakest stock market performance while the third year offers the strongest. Anyone who remembers The Chicago Daily Tribune’s headline, Dewey Beats Truman, or CNN and Fox News’ headlines indicating the Supreme Court struck down the individual mandate, knows predicting the future can be challenging. In general, it’s a good idea to remember that the drivers of market performance tend to be economic factors, investor sentiment, and company fundamentals. Weekly Focus – Think About It “The pursuit of truth and beauty is a sphere of activity in which we are permitted to remain children all our lives.” —Albert Einstein, theoretical physicist 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

Sell in May and Go Away and Where Will You Live When You Retire? Guide Rock Weekly Market Commentary May-13 FT028

‘Sell in May and Go Away’ is a trading maxim which, according to Investopedia, encourages an investor to “sells his or her stock holdings in May and get back into the equity market in November…” Traders who adhere to that adage may be pondering averages and exceptions right now. During the first two weeks of the month, the Dow Jones Industrials Average, the Standard & Poor’s 500, and the Russell 2000 Indices all reached new highs. The Dow passed 15,000, the S&P reached 1,600, and the Russell 2000 hit 968. Listen Mobile:   Bulls are in the majority among investors, although there is some bearish sentiment, according to the Bull and Bear Wise Index. Investors’ changing expectations are reflected in CNNMoney’s Fear & Greed Index which showed investor sentiment has shifted from ‘fear’ one year ago to ‘extreme greed’ last week. The premise of the index, which measures seven indicators, is investors are driven by two emotions: fear and greed. When investors are fearful, stock markets may fall more than they should; when investors are greedy, markets may be pushed higher than they should be. Investors’ inclination toward stocks may be one of the reasons for declines in the value of gold and commodities last week. Although there was little of it, economic news generally was positive last week. The Labor Department announced the number of Americans filing initial claims for jobless benefits dropped unexpectedly. Approximately 323,000 people filed for unemployment benefits which was about the same number that filed each week before the recession started in December 2007. According to Bloomberg, investors took the news as a sign the economy is improving which helped push yields on 10-year Treasuries higher. Perceived economic strength in the caused the dollar to gain against many of the 16 major world currencies last week, as well as the 24 emerging countries’ currencies tracked by Data as of 5/10/13 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.   WHERE WILL YOU LIVE DURING RETIREMENT? As with many of life’s important questions, the answer depends on you and, possibly, your partner or spouse. Before you make a decision and decide to retire to wherever your grandchildren live (or in your favorite vacation spot) you might want to take a moment and consider the tax implications of your decision. If your grandchildren live in Alaska, Nevada, Wyoming, Mississippi, or Georgia, you’re probably okay. Each year, reviews the tax rules of each of the 50 states, giving special consideration to states which offer attractive tax incentives to retirees and then provides a list of those states it deems most tax-friendly for retirees. For 2012, Kiplinger reported the five states listed above were the most tax-friendly. According to the article, “All of these tax havens exempt Social Security benefits from taxation (and some impose no state income tax at all). Many of them exclude government and military pensions from income taxes, and some exempt private pensions, too. A few offer blanket exclusions up to a specific dollar amount of retirement income from a wide variety of sources, which is important if you depend on distributions from IRAs and 401(k) plans rather than traditional pensions. Review all of your sources of income before you decide which state may be the best fit for your retirement home.” reported the least tax-friendly states included Connecticut, Vermont, Rhode Island, Montana, and Minnesota, which have one or more of the following: · Estate or inheritance taxes · High property taxes · No tax breaks on Social Security benefits · No special treatment for various types of retirement income Source: No matter where you decide to settle, it’s important to evaluate all of the factors which may affect your income during retirement.   Weekly Focus – Think About It “Every saint has a past and every sinner has a future.” —Oscar Wilde, Irish writer 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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Financial Tech

Markets Testing Limits and Does Money Buy Happiness? Guide Rock Weekly Market Commentary May-6 FT027

Like athletes testing their limits, the Standard & Poor’s 500 and the Dow Jones Industrials Indices both hit new highs last week. The S&P closed the week above the 1,600 level for the first time, while the Dow climbed above the 15,000 mark on Friday before closing lower. Strong corporate earnings, gains in the housing market, and good news from Europe helped support last week’s strong performance. Listen Mobile:   Corporate earnings season – the period when companies’ managements tell shareholders how well the companies have performed during the previous quarter – is almost over. Seventy-two percent of the companies in the S&P 500 have beaten analysts’ expectations, according to information provided by FactSet and reported on MarketWatch. Since 1994, about 63 percent of companies have beaten expectations on average. Housing market news was largely positive last week. The Standard & Poor’s/Case-Shiller 20-city index of home prices was up percent year-over-year through February which was the largest gain in almost 7 years. Generally, cities that had seen big price declines during the housing crisis realized the biggest gains, including Phoenix, Las Vegas, and Atlanta. Cities experiencing strong jobs growth, such as San Francisco, Seattle, and Dallas, also showed significant price gains. In Europe, Italy’s elected leaders finally resolved their political impasse and formed a government. The highly-diverse coalition includes a record number of women, as well as Italy’s first non-white minister. The new cabinet was sworn in on Sunday, April 28. On Monday, Italy’s FTSE MIB, an index which reflects the performance of the Italian stock market, the MSCI World Index, and several stock markets moved higher. Data as of 5/3/13 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. DOES MONEY BUY HAPPINESS… OR DOESN’T IT? Many years ago, Richard Easterlin, a Professor of Economics at the University of Southern California, studied the relationship between happiness and money. He found that, over shorter periods of time, happiness and income tend to move in tandem. “Happiness tends to fall in economic contractions and rise in expansions.” Over longer periods of time, he found satisfaction with life (, happiness) had little relationship to rates of economic growth (, people having more money). The conclusion was once people have enough money to meet basic needs, they are as happy as they are going to be. A recent paper from the National Bureau of Economic Research, written by economists Betsey Stevenson and Justin Wolfers of the University of Michigan, appears to cast doubt on Easterlin’s happiness-income paradox. The authors relied on data from Gallup polls which asked people throughout the world how much they earned and on which rung of the happiness ladder they were perched. While people in some countries appeared to be happier than people in other countries, everyone – no matter how much money they had – was happier when they had more money. So, does more money translate into more happiness or doesn’t it? It may all come down to your definition of happiness. After all, well-being is subjective as Princeton’s Professor of Psychology and Public Affairs, Daniel Kahneman, and its Professor of Economics and International Affairs, Angus Deaton, pointed out in a 2012 paper. The pair evaluated two measures of happiness: life evaluation (satisfaction with your place in the world) and emotional well-being (day-to-day happiness). The researchers found that life evaluation increases steadily with income, while day-to-day happiness maxes out an annual income of $75,000. They concluded “high income buys life satisfaction but not happiness, and low income is associated both with low life evaluation and low emotional well-being.” Weekly Focus – Think About It “All I ask is the chance to prove that money can’t make me happy.” —Spike Milligan, British comedian 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

AP Twitter Hacked and Markets Move, Who Owns all the Gold? – Guide Rock Weekly Market Commentary Apr-29 FT026

If anyone doubted the power of Twitter, their skepticism was laid to rest this week. Early Tuesday afternoon, a tweet from the Associated Press reported President Obama had been injured by explosions in the White House. Stock, bond, and commodity markets fell sharply on the news and then rebounded when the Associated Press communicated that its Twitter account had been hacked. This wasn’t the first time such a thing had happened on Twitter or the first time false and market moving information had been posted. In February, the stocks of Burger King and Jeep moved after a post on each company’s Twitter account indicated the company had been sold to a rival firm. The lesson to take from these events? Everyone may want to be wary about buying or selling investments based on news reported through Twitter or any other social media feeds. Listen Mobile:   Economic and earnings news was mixed during the week. Durable goods orders were off by almost 6 percent which was a mark in the negative column. There were fewer jobless claims than analysts expected which was a positive. The initial estimate of GDP growth for first quarter was released by the Commerce Department. Growth was about percent annualized during the first quarter. That was significantly above fourth quarter’s percent annualized growth, but below expectations for percent growth. An above average number of companies beat expectations for the quarter. Sixty-nine percent of the companies in the Standard & Poor’s 500 beat analysts’ expectations, according to Thomson Reuters data reported on Yahoo! Finance. Since 1994, about 63 percent of companies have beaten expectations on average. Markets generally recovered from Twitter trickery and were unfazed by mixed economic news. Stock markets finish the week higher with the Standard & Poor’s 500 gaining percent, the Dow Jones Industrial Average rising by percent and NASDAQ Composite Index up percent. Treasury prices were higher by the end of the week. According to , that’s an indication the world still believes Treasuries are a safe haven. Data as of 4/26/13 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. WHAT’S THE STORY WITH GOLD? According to an April 2012 Gallup Poll, Americans believe gold is the best long-term investment. Overall, real estate, stocks, and savings accounts were near-followers. When Gallup broke the statistics down demographically, they found men prefer gold while women prefer real estate, independents prefer gold while Democrats and Republicans prefer stock, and wealthier people prefer real estate and stocks while middle and lower income Americans prefer gold. Gold’s popularity is interesting because research suggests investors hold less than 20 percent of the world’s $9 trillion gold supply. Much of the world’s gold is held by central banks – the Federal Reserve, the European Central Bank, and others – and other financial institutions. One of the world’s largest holders of gold is the International Monetary Fund (IMF). The IMF is “an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.” The IMF and central banks hold gold as foreign exchange currency reserves because gold is universally accepted and highly liquid, according toThe Economic Times. The World Gold Council reports developed countries often hold a significant portion of their reserves in gold. The United States has percent of its reserves in gold, Germany has percent, Italy has percent, France has percent, and the Netherlands percent. In addition, central banks in emerging countries hold gold reserves although their reserves are often smaller than those of developed countries. Early in 2013, percent of Russia’s reserves were gold, percent of India’s, and percent of China’s. Some experts believe high demand for gold from emerging countries combined with limited gold supply may push gold prices higher. Other experts have compared the recent highs of the gold market to the dotcom and housing bubbles. Who’s right? Only time will tell. Weekly Focus – Think About It “Faith consists in believing when it is beyond the power of reason to believe.” —Voltaire, writer, historian, and philosopher 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.
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Financial Tech

Are You Responsible for Your Loved One’s Unpaid Debt? – Guide Rock Weekly Market Commentary Apr-22 FT025

It was a wild, wild week. Last Monday, bombs exploded near the finish of the Boston Marathon. Not long after, media outlets let the public know letters to President Obama and a senator from Mississippi contained the poison ricin. On Wednesday, the town of West, Texas was flattened by an explosion at a fertilizer plant. By the end of the week, a man had been arrested for sending the ricin letters, the city of Boston had been locked down, the bombing suspects had been captured, and folks were returning to their homes in West, Texas. Listen Mobile:   The week’s economic news wasn’t all that encouraging. The pace of economic growth in China slowed unexpectedly, the International Monetary Fund reduced its 2013 growth forecast for the United States for the fourth time, earnings results were mixed, and an index of leading economic indicators in the Unites States unexpectedly moved lower. On the plus side, new home construction hit a five-year high. All three major indices – the Dow Jones Industrials Index, The Standard & Poor’s 500, and the NASDAQ – finished the week down more than 2 percent. The most significant move of the week took place in the gold market which lost about 9 percent on Monday. That was the biggest one day fall in 30 years. The market recovered some value later in the week, finishing down about percent. According to The Economist, “The usual explanation for sharp price movements, when an economic rationale seems lacking, is that someone is selling off their holdings at any price. Some have pointed at Cyprus which may have to sell gold in response to its debt crisis. Although Cyprus’ gold holdings are small, the fear is that other troubled eurozone nations may follow suit.” Will this week be calmer? It’s possible, but economic news will include the first estimate of GDP growth for first quarter. According to Reuters, GDP growth is forecast at 3 percent annualized even though fourth quarter’s GDP growth was percent annualized. Data as of 4/19/13 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 you responsible for your loved one’s unpaid debt? It’s never easy when someone dies. Grief is a powerful, and sometimes debilitating, experience that often leaves next of kin vulnerable. Unfortunately, there is a group that sometimes tries to take advantage of family members in mourning. No, they’re not scammers or confidence men. They’re debt collectors who try to persuade family members to accept responsibility for hospital bills, credit card balances, auto loans, and other debts incurred by the deceased even though family members have no legal obligation to pay. People don’t always know when someone dies, their debts die with them. There are exceptions to this, particularly for spouses. If you live in a community property state, typically, spouses share property and debts equally. Non-spouse family members, however, have no obligation to pay outstanding debts of the deceased unless they have co-signed a debt agreement. Regardless of these facts, debt collectors may contact you after the death of a loved one. The AARP Bulletin reported “debt collection agencies frequently employ specially trained representatives who make sympathetic calls to husbands, wives, children, and other family members to urge them ever-so-gently to pay what the loved one owed.” The Bulletin advised family members who receive these calls to hang up. There is an established procedure for collecting debts from a deceased person. It’s called probate, and it is the appropriate way for debt collectors to pursue collections after death. After receiving numerous complaints about death-collections practices, the Federal Trade Commission (FTC) investigated the situation by listening to recordings of calls between collectors and mourners. The FTC determined that some debt collectors misled relatives into believing they had to pay the deceased’s debts. As government agencies are apt to do, the FTC issued new guidelines. Debt collectors should discuss a dead person’s debt only with the spouse or someone chosen by the estate to discuss the matter. The next time you revise your will, you may want to designate someone to discuss any outstanding debts after your death. It could save your spouse some unnecessary heartache.   Weekly Focus – Think About It “Everything has beauty, but not everyone sees it.” —Confucius 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.
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