Mark Twain and Mondays researching your portfolio

Quote of the Week:
"Never put off until tomorrow what you can do the day after tomorrow." - Mark Twain

Mr. Twain is forever a source of wisdom and humor as evidenced by this week’s quote. But we don’t follow that particular advice.

In the case of never putting off until tomorrow what you CAN do today, every Monday we generally meet with investment company luminaries (and not so luminaries) in an effort to best understand market sectors, strategies, and tactics for our clients.

Monday morning for example we met with Mr. Frank Riccio, Regional Vice President for PIMCO Investments. PIMCO is the largest retail bond manager in the world and the $240 billion PIMCO Total Return Fund is the largest fund of its kind. Frank spent time going through important data points related to the domestic and international bond markets, especially Europe, outlining PIMCO’s strategies. The depth of their research has been an important element that supplements our portfolio construction for clients, and has for many years.

Our follow up late morning meeting was with Mr. Matthew McKay, Regional Vice President, for Duetsche Bank Group’s DWS Investments. It seems likely to us that no one is more closely attuned to Europe’s situation than Duetsche Bank, the German financial behemoth. Interestingly, our relationship with this firm dates back to the 80’s, and before their acquisition of U.S. based Kemper/Scudder funds. DWS’ take on bonds, particularly U.S. municipal bonds, is a very helpful add for us, especially right now. Municipal bond funds are enjoying some very high tax-equivalent yields currently. Those yields can benefit many of our clients who are growing weary of the low interest rate environment at present.

Why are we telling you about our meetings?

Simple; we want you to know that behind the scenes of the portfolio suggestions we make is a mountain of painstaking and ongoing research that is as fresh as possible. We want you to know that we routinely take the time to “kick the tires” and dig into important elements that can affect the outcome of our recommendations. We want you to know that before you hear of the tactical changes we might suggest at times, many hours have been spent to make sure that the reasoning behind the change is as sound as it can be.

So with no disrespect meant to Mr. Twain, we don’t put of until tomorrow what we can do today. In fact we do today what must be done in order to make tomorrow better still.

Thank you as always for your business and those whom you so graciously refer to us.**


Market Week: April 30, 2012
The Markets

Solid corporate earnings from some key tech and consumer companies encouraged investors to ignore dicey economic reports and push the S&P 500 back above 1,400. Despite a late-week downgrade to Spanish sovereign debt and a less-than-encouraging U.S. gross domestic product report, even the Global Dow was in positive territory, while a stand-pat stance by the Fed allowed bonds to remain relatively stable.


Last Week's Headlines

• U.S. economic growth slowed in the first quarter. The Commerce Department's initial estimate of gross domestic product was 2.2%, substantially lower than the previous quarter's 3%. Consumer spending picked up 2.9%, higher than the 2.1% of Q4 2011, but business spending was off. Another indicator of a slowing economy was durable goods orders, which plummeted 4.2% in March.
• Standard & Poor's downgraded Spanish sovereign debt by two notches to BBB+; the rating downgrade could increase the country's already steep borrowing costs in the future. S&P cited a lack of progress in reducing the country's budget deficit and the likelihood that financial assistance will be needed at some point. It also imposed a negative outlook, meaning further downgrades are likely. New unemployment statistics delivered a second blow by putting the country's unemployment rate at more than 24%.
• Another one bites the dust: Holland's prime minister and cabinet resigned after the coalition government failed to achieve budget cuts needed to reduce the country's deficit and comply with eurozone debt guidelines. Holland has supported the German-led campaign for tougher fiscal responsibility measures and financial assistance.
• Though it saw some hints of softening in the U.S. economy, the Federal Reserve's Open Market Committee essentially stayed the course, giving little indication of any potential post-QE2 actions and leaving interest rates intact.
• New home sales fell 7.1% in March, according to the Commerce Department. However, unseasonably warm weather may have accelerated some sales that would otherwise have occurred in the spring, since an earlier increase in February sales was revised upward.
• U.S. home prices hit their lowest level in almost a decade in February. The S&P/Case-Shiller index was down 0.8% for the month and 3.5% year over year, with Atlanta's 17.3% decline over the past 12 months leading the way. Seventeen of the index's 20 cities reported lower prices. However, Phoenix saw a 3.3% annual gain and its fifth consecutive monthly increase.


Eye on the Week Ahead

Unemployment data on Friday will be closely watched, especially in the wake of recent softer economic data. Additional earnings reports will vie for attention with consumer spending data and the Institute for Supply Management's manufacturing and services reports. Finally, Thursday will bring an announcement from the European Central Bank's meeting.

Key dates and data releases: personal income/spending (4/30); construction spending, U.S. manufacturing, auto sales (5/1); factory orders (5/2); business productivity/costs, U.S. services sector (5/3); unemployment/payrolls (5/4).

Data sources: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.


The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

Prepared by Lee Davis** and Broadridge Investor Communication Solutions, Inc. Copyright 2012