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

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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Financial Tech

The Fed Makes a Mistake and Reversion to the Mean – Guide Rock Weekly Market Commentary Apr-15 FT024

Last week, the term ‘Easy Money’ conjured both comedian Rodney Dangerfield and the Federal Reserve, and no one was certain how much respect either one should get. The Fed accidentally e-mailed its market-moving Federal Open Market Committee (FOMC) meeting minutes to congressional staffers and trade lobbyists on Tuesday at 2 The minutes weren’t supposed to be released to anyone until Wednesday at two. Once the mistake was realized, the Fed released the minutes early on Wednesday morning. Listen Mobile:   Markets enthusiastically embraced the minutes which appeared to focus on the idea quantitative easing will continue. The Dow Jones Industrial Average closed at a record high more than once last week, and the Standard & Poor’s 500 Index is already nearing analyst’s targets for the full year. The minutes indicated committee members were less clear on the issue, according to the Washington Post, which reported: “A few Fed officials think QE (Quantitative Easing) should be stopped immediately; a few think it should be shrunk fairly soon; many think it should be slowed if we see a rebounding job market; a few think it should continue at its current size until the end of the year; and a couple think it may need to be increased. The minutes also make clear Fed officials are not all on the same page in determining the economic climate that would trigger that tapering.” Committee members are not the only ones who don’t know what to think about the economy. Consumer sentiment has been volatile. According to The Wall Street Journal, the Thomson-Reuters/University of Michigan consumer sentiment index showed consumer sentiment improved significantly from mid- to late-March only to decline again from late-March to mid-April. speculated weaker consumer sentiment may have been the result of the payroll tax roll and weaker economic data. Data as of 4/12/13 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. IT HAS BEEN SAID STOCK MARKET RETURNS REVERT TO THE MEAN, but what does that mean? Reversion to the mean is a statistical phenomenon. It’s the idea the further something is from the mean – or average – the more likely it is the next thing that comes along will be closer to the mean. For example, if a baseball player has a batting average of .330 and hits .180 in a game, it’s likely that player will hit better in the next game (unless, the player’s in a slump, but that is a different topic). Reversion to the mean is the theory behind a variety of investment strategies. Analysts who employ the theory may look at an average price, an average return, or another financial statistic they find relevant. For example, they may consider whether a company’s recent performance varies significantly from its historical average performance. If its performance is worse than average, some analysts may decide the company’s price is likely to revert to the mean. In that case, they may choose to invest in the company. If the company’s performance is better than average, analysts may decide to sell shares. Similarly, if a market or index – such as the Treasury market or the Standard & Poor’s 500 Index – performs significantly worse than its mean, investors may decide better performance is ahead, and vice versa. In 2009, an article in Forbes stated, “Mean reversion is an odd concept because it’s clearly not causal. The market’s historic return of 9 percent a year is based on over 100 years of data (what’s typically considered the modern stock market), and, of course, the ride to 9 percent is a bumpy one with major double-digit up years and big double-digit down years all averaging to that 9 percent number.” The point is any average is a moving target. After all, a significant downward movement pushes the historical mean lower and a significant upward shift pushes it higher. Regardless of the investment theories employed by analysts and money managers, investors may want to set financial goals, carefully choose asset allocation strategies, hold well-diversified portfolios, and maintain their long-term perspective. Weekly Focus – Think About It “Thousands of candles can be lighted from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared.” —Buddha 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

There’s a New Bric in Town and Japanese Stagflation – Guide Rock Weekly Market Commentary Apr-08 FT023

investors puzzled over disparate pieces of economic and world news last week. By the end of the week, major markets had tumbled indicating investors didn’t like what they’d seen. Under new leadership, the Bank of Japan (BOJ) announced an aggressive stimulus program that will inject $ trillion into its economy over the next two years. The effort is intended to end decades of stagflation. Stagflation is a period of economic stagnation characterized by rising inflation, higher unemployment, lackluster consumer demand, and lack of growth in business activity. Shares in the Japanese market, which closed before jobs numbers were announced, rose to almost a five-year high. Listen Mobile:   Elsewhere in Asia, escalating rhetoric from North Korea kept tensions high on the Korean Peninsula and negatively affected investor sentiment. In the , economic news was largely disappointing and suggested a slowdown in the economy may be ahead. Manufacturing and service numbers came in below expectations, and a Department of Labor report showed far fewer jobs were added last month than expected. On the positive side, a different report showed unemployment had ticked lower, moving to percent from percent. After hitting an all-time high on Tuesday, the Standard & Poor’s 500 Index finished the week down 1 percent. The Dow Jones Industrials and NASDAQ Indices also tumbled, finishing the week down percent and down percent, respectively. Treasury markets benefitted from uncertainty about the strength of economic growth, the outcome of the Japanese stimulus program, and the potential for violence in Korea. The yield on 10-year Treasury notes fell to percent. Data as of 4/5/13 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. There’s a new bric in town. You’ve probably heard of the BRIC countries – Brazil, Russia, India, and China. The nickname was created in 2001when Jim O’Neill, an economist and the future Chairman of Goldman Sachs, used it to describe the countries of the world that would drive future economic growth. He was right about the fact they would drive economic growth. According to The Economist, “The BRICS alone have been responsible for 55 percent of global growth since the end of 2009. Dragged down by debt and austerity, the 23 countries that make up the developed world contributed just 20 percent to that growth.” You may have noticed The Economist capitalized the ‘S’ in BRICS. That’s because South Africa recently joined the team. It’s the smallest BRICS country with a population of just 50 million compared to more than 1 billion for both China and India. South Africa’s GDP isn’t all that impressive either. It ranks 28th in the world, according to The Guardian, while China ranks 2nd, Brazil 6th, Russia 9th, and India 10th. The statistical comparison begs the question: Why was South Africa added to the list of the world’s powerful emerging countries? According to The Economist, geographic inequity was the driving force behind the new addition. The original BRICs did not include any countries in Africa which currently is the world’s fastest growing continent. Africa’s gross domestic product (GDP) growth is averaging about 6 percent a year, a pace that is expected to remain constant for another decade. Over the decade ending in December 2012 Africa has seen: Foreign direct investment more than tripled to $46 billion A 30 percent increase in real income per person A 74 percent decline in HIV infections A 30 percent decline in malaria deaths Mobile communications grow: now there are three mobile phones for every four people A 10 percent increase in life expectancy Steeply falling infant mortality rates An increase in secondary school enrollment Source: The Economist Africa is changing so rapidly many believe the continent deserves to have a voice as an emerging region of the world. How to give it that voice? The solution was to add South Africa, the continent’s largest economy, to the BRICS. Weekly Focus – Think About It “A mind that is stretched by a new experience can never go back to its old dimensions.” —Oliver Wendell Holmes, Supreme Court Justice 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

Positive Results for US Markets for Q1 2013 – Guide Rock Weekly Market Commentary Apr-01 FT022

stock markets finished the week – and the quarter – on a positive note. The Federal Reserve’s accommodative monetary policy and strong profit growth helped provide the lift needed to propel the S&P 500 Index to a record high. The Dow Jones Industrials Index also finished the week above its previous record close. For the quarter, the S&P 500 was up about 10 percent, the Dow was up about percent, and the NASDAQ finished up about percent. Listen Mobile: Despite the strong performance overall, markets were somewhat choppy during the week. Concerns about Cyprus and the Eurozone debt crisis overshadowed markets early on. A positive report on durable goods from the Commerce Department helped push markets higher, as did a home-price index report from Standard & Poor’s Case-Shiller that showed the biggest yearly increase in home prices since the summer of 2006. This report seemed to have held more sway with investors than either weaker-than-expected new home sales or lower-than-anticipated consumer confidence. Late in the week, the GDP growth rate for the fourth quarter of 2012 was revised upward, but remained sluggish at percent annually. The Treasury market generally has benefitted from worries inspired by the Eurozone debt crisis. The latest episodes in the crisis – the Cyprus bank bailout and Italy’s failure to form a government – helped nudge rates lower last week. The continues to be perceived as relatively safe. Fears about Eurozone debt issues generally have had a positive effect on gold prices, too, helping the precious metal reach a record high price in September 2011. That has not been the case this year. Gold finished the quarter down by more than 5 percent. Data as of 3/29/13 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. HOW FAST SHOULD THE UNITED STATES’ ECONOMY BE GROWING? According to The Economist, “In the three years since the end of the recession in mid-2009, growth averaged percent, barely half the percent average of the seven previous recoveries.” This begs the question: How fast should the economy be growing? Economists, academics, and policy makers have been trying to figure that out. Many have started with an economic theory put forward by noted economist Milton Friedman in 1964. His “Plucking Model” postulates the business cycle is like a string attached to a board. The board represents “the ceiling of maximum feasible output.” Once in a while, the string is plucked down by recession and then it springs back. The idea is the depth of a recession will be mirrored by the strength of the recovery that follows. At first blush, the Plucking Model doesn’t appear to apply to this recovery. The Great Recession was the deepest downturn since World War II, and the country hasn’t snapped back. According to several recent reports, there may be a reason for this. Our ‘ceiling of optimal output’ – the fastest rate at which our economy is expected to grow – may be lower than it used to be. Productivity and Potential Output Before, During, and After the Great Recession, a working paper from the San Francisco Federal Reserve, found growth in the was slowing in the mid-2000s although the slowdown was largely unrecognized before the Great Recession. What Accounts for the Slow Growth of the Economy After the Recession, a Congressional Budget Office study, determined about two-thirds of the difference between America’s current growth rate and the average growth after previous recoveries is due to long-term trends including demographic changes. The other one-third is credited to low demand for goods and services. Disentangling the Channels of the 2007-2009 Recessions, by James Stock of Harvard University and Mark Watson of Princeton University, also found slower growth in the is largely the result of demographic trends such as a limited labor supply as Baby Boomers have begun to retire and the number of women joining the workforce has leveled off. Considered together, the reports seem to indicate economic growth began slowing before the recession and, unless demographic trends shift, our country may continue to experience slower growth. Weekly Focus – Think About It “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” —Michael Jordan 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. * To unsubscribe from the Guide Post please reply to this e-mail with    “Unsubscribe” in the subject line, or write us at
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Financial Tech

Slowing Markets and the Growing Middle Class – Guide Rock Weekly Market Commentary Mar-18 FT021

Like winded runners, stock markets slowed at the end of last week. Since the start of the year, the Dow Jones Industrials Index has risen by almost 11 percent, hurdling past new highs several times. The S&P 500 Index gained percent over the same period. The index moved higher in 10 of the past 11 weeks and finished last week just shy of its all-time high. However, the Dow and the S& P’s momentum – and that of some other stock markets – slowed on Friday as stronger economic data was offset by an unexpected slump in consumer sentiment. Listen Mobile:   Economists expected the Thomson Reuters/University of Michigan consumer sentiment index – which gauges Americans’ feelings about their current financial health, the health of the economy over the shorter-term, and growth prospects for the economy over the longer-term – to move higher in March. Instead, the index fell from to , reaching its lowest level since December 2011. Markets fell on the news even though the negative results contradicted those of other consumer confidence measures, such as Bloomberg’s Consumer Comfort Index which has moved higher for six consecutive weeks. The consumer sentiment surprise also pushed Treasury yields down. Yields on benchmark 10-year Treasury notes fell to 2 percent. The Treasury market remains concerned that stronger economic data could lead the Federal Reserve to change its policy on quantitative easing. The Federal Reserve’s next Open Market Committee meeting is next week, and may provide further insight to the matter. Data as of 3/15/13 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. THE MIDDLE CLASS IS GROWING. In the United States, households that earn between $35,600 a year and $94,600 a year are considered to be middle class. That’s about 40 percent of households (another 40 percent earn less than the middle class and 20 percent earn more). Scholars and pundits have noted that job insecurity and stagnant income levels have weakened the middle class in the United States during the past few years, but that’s not what’s happening in the rest of the world. The global middle class has been growing and is expected to continue to grow over the next few decades. The Organization for Economic Development defines the global middle class as including people earning between $10 and $100 a day with purchasing power parity. (Purchasing power parity is the theory that currency exchange rates should adjust so the same goods cost the same in different countries. It’s what the Big Mac Index measures.) By 2030, according to Ernst & Young, the global middle class is expected to more than double, adding three billion new members. These up-and-comers primarily will live and work in rapidly-growing countries. As the global middle class grows so should its spending power. Between 2011 and 2030, middle class demand for goods and services is expected to increase from $21 trillion to $56 trillion. Forty percent of that spending will be done by the burgeoning middle class in Asia, including China and India. According to Forbes, these consumers are creating demand for all kinds of goods and services including cosmetics, automobiles, cell phone minutes, personal banking, and retirement planning. For many decades, consumer spending has been an important driver behind economic growth in the United States. It’s likely to play a significant role in the economic growth of emerging countries, too. As developing countries become developed countries, interesting opportunities for investment are likely to emerge. Weekly Focus – Think About It “A man who carries a cat by the tail learns something he can learn in no other way.” —Mark Twain, American author and humorist 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. * To unsubscribe from the Guide Post please reply to this e-mail with    “Unsubscribe” in the subject line, or write us at
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