Helpful miscellaneous articles
regarding our retirement plan and planning.
Like you, I review my retirement nestegg and plan from time to
time. Recently, I went though some continued
education for some credentials I maintain and it occurred to me that we all
could use a review about these issues.
So with your help, we will share and post articles and info that may be
helpful and of interest to many of you in this section.
REFLECTIONS ABOUT MEMORIAL DAY
Memorial Day weekend is upon us and for many it signifies the
official start to summer. Originally called Decoration Day, the true meaning
of Memorial Day is not burgers by the pool, but to remember and honor those men
and women who have given their lives in service to our country. Officially
declared by President Lyndon Johnson in May 1966, Memorial Day can trace its
roots back to the Civil War and the remembrance of Union soldiers.
A common tradition is to place a small American flag at the
gravestones in Arlington National Cemetery and throughout cemeteries in the
United States to remember and honor those brave service men and women who
sacrificed so greatly for our nation.
This week is generally short and quiet in the financial markets
as many people prepare to leave town or gather with family and friends for
outdoor picnics and fun. But this year continues to be noisy with
headlines and stories about:
·
The continuing concern over the
next Greek election in mid-June and its outcome relative to the Euro zone –
The election is thought to be a decision point for Greece – will they stay part
of the Euro zone and abide by the previous government’s promise of austerity or
will they leave the Euro zone and reestablish their own currency with likely
years of difficult economic times ahead?
·
China’s slowing economy –
After years of vibrant growth that has helped millions of Chinese become middle
class citizens, a slow- down is occurring. The government would like to
moderate inflation but continue economic growth at a somewhat lesser
pace. Reduced demand from European consumers has also contributed
to the slow-down in China.
·
The Facebook initial public
offering – Many expected these new shares to rise even higher from
brisk demand. They’ve disappointed so far due to the pre-sale hype and
speculation surrounding the shares.
·
The US economy’s pace of growth –
Our economy continues to gradually improve as measured by: 1) consumer spending
at a record high, 2) retail sales are up again in April for the 21st time
in the past 22 months and 3) private payrolls are up for 26 consecutive
months. Additionally, automobile and light truck sales are up nearly 10%
from a year ago. *
It’s easy to see why investor confidence could be shaken.
Could the “herd mentality” be working against long-term investment
portfolios? Often the media reinforces our fears by emphasizing the
negative aspect of a financial story. Yet if we look at interest rates (which
are historically low) and stock market valuations (including stock dividends)
as measured by the S&P 500 which are reasonable considering their price to
earnings ratio**, we may see the opportunity in today’s markets.
As you reflect on this Memorial Day, we hope your confidence
remains focused on the fundamentals and valuations of the current markets and
your long-term investment accounts. Though past performance is no guarantee of
future results, perspective on the past may help us better understand the
present and the future.
Happy Memorial Day!
Greg Horstman
For the past 28 years, Greg has
worked to provide clients with exceptional financial advice and strategic
investment strategies. In the summer of 2009 he partnered with Craig and joined
Prosperion Financial Advisors. His service and personal dedication to clients
is second to none. Learn more about Greg here.
The opinions voiced in this material are for
general information only and are not intended to provide specific advice or
recommendations for any individual. To determine which investment(s) may be
appropriate for you, consult your financial advisor prior to investing. Stock
investing involves risk including loss of principle.
Securities offered through LPL Financial. Member
FINRA/SIPC
The Standard and Poor’s 500 Index is a capitalization
weighted index of 500 stocks designed to measure performance of the broad
domestic economy through changes in the aggregate market value of 500 stocks
representing all major industries.
Sources:
*First Trust Advisors: Monday Morning
Outlook, May 21,
2012.
(As with any of these informative articles,
anyone who needs someone to talk to about
this
very subject contact me and I can direct you to a knowledgeable advisor).
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