The Wall Street Journal is claiming the housing bust in the U.S. is finally over based on the observations that
The major indexes opened the week on Monday with minor losses brought on by a report over the weekend of a slowdown in the Chinese economy. Alcoa opened the second quarter earnings season on Tuesday with a less than stellar earnings report, sending the S&P 500 and the Dow to their fourth consecutive losing sessions. On Wednesday the slide continued when the Fed minutes for its June meeting indicated that monetary easing will not be happening any time in the immediate future. The Dow’s losing streak was extended to six sessions on Thursday, its longest in nearly a year. However, all the Dow’s weekly losses were erased on Friday, when the benchmark registered a 200 point gain on a surprisingly good earnings report form J.P. Morgan Chase.
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As an investor, you are faced with hundreds of decisions on where to get your investment advice. Here’s a nice breakdown between advisors and brokers that can help steer your decision making process.
The infographic below refers to advisors using the acronym “RIAs” which stands for Registered Investment Advisors.
NorthStar Capital Advisors is an RIA. Note that we require a minimum investment of only $50,000 so we win Round 4 below as well! We hope this information will help you understand the role that we play in helping our clients.
(Click on the graphic to enlarge for easier reading)
More weak economic news in the form of a disappointing US manufacturing report sunk stocks early on Monday, but hope that such an economic slow down might stimulate action from the world’s central banks pushed the Dow and S&P 500 to near the unchanged level for the day on Monday. A holiday-shortened session on Tuesday recouped some of Monday’s losses. The markets reopened on Thursday after the 4th of July holiday, but did not behave as expected, with moderate losses experienced by the major indexes despite positive US private-sector job news and the lowering of interest rates by both China and the European Central Bank. The slide accelerated on Friday following the release of a US labor report indicating that fewer jobs than expected had been created in June, while the unemployment rate remained unchanged at 8.2%.
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NorthStar would like to take a moment to thank you, our loyal clients and friends, as today we celebrate 6 years of managing investment portfolios. We have come a long way since we rolled out our objective and disciplined approach to investing in 2006.
Our success is attributable to clients like you who faithfully support our business and receive great service and advice in return.
Thank you again for your loyalty and support over the past 6 years. We are excited about what the future holds and we are thankful to be a healthy organization, consistently updating and improving our abilities to serve you. We appreciate your trust, and we’ll continue to do our best to give you the kind of service you deserve. We remain ambitious and committed to making both your investments and NorthStar Capital Advisors even more successful!
Best regards,
The NorthStar Team
Stocks fell worldwide on Monday as further impatience with a lack of progress in the Eurozone debt crisis caused the world’s major indexes to plummet 1-2%. On Tuesday, modest gains were had by the market on somewhat positive US housing data. The S&P 500 added nearly a percent on Wednesday on a report that May home sales beat expectations. Oil also rose back above $80/barrel. On Thursday, stocks started the day down, and fell further after news that Obamacare was upheld by the Supreme Court. However, the markets rebounded at the end of the day when rumors of a potential Euro debt solution began to circulate. The major indexes finished the week on Friday in a big way on very positive news out of Europe, in which European leaders agreed to appoint one supervisor to oversee all of Europe’s banks. Such progress spurred the Dow to gain almost 278 points, while the S&P 500 logged its largest gain of 2012.
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The reports of my death are greatly exaggerated — Mark Twain
Stocks may be feeling a lot like Mark Twain once felt — discounted prematurely!
The financial media would have you believe that retail investors have been running, not walking, away from stocks. However, a massive, new study of U.S. investors shows the cold, hard facts say otherwise.
A recent Vanguard study sheds light on how individual investors are approaching stocks. Vanguard reviewed the retirement accounts of 3 million Americans. As of 2011, the average individual investors had an asset allocation that consists of
Retirement savers have two-thirds of their money riding on stocks. This allocation has declined only 8 percentage points since peaking in 2007.
Moreover, 71% of new contributions are going to purchase additional stocks, up 1% from 2010 and 3% from 2009.
What has changed significantly is how investors are purchasing their stocks. Purchases directly through diversified stock funds is only 38% of contributions — down sharply from 51% in 2007. However, stocks purchased via target-date funds are up.
So investors may be thinking they have been selling stocks but they continue to invest in them indirectly.
To quote Jason Zweig:
the public’s infatuation with stock funds isn’t dead. It’s alive and well, but it’s going in by the back door.
The major indexes were mixed on Monday with the NASDAQ logging a nice gain, while the Dow slipped modestly, as eyes remain on the ongoing Greece/Spain financial woes. On Tuesday, all the indexes participated in a 1% gain as the hope for further government stimulus drove investors to buy more stock. Stocks failed to maintain the rally on Wednesday when the Fed held off on making any aggressive financial moves, instead opting only to extend the Treasuries buy/sell program Operation Twist until the end of the year. The bottom fell out Thursday with a 2% loss for the Dow, as a combination of weak international economic reports coupled with disappointment over the Fed’s lack of action sent stocks spiraling. Oil dropped to less than $80/barrel. The week ended on Friday on an up note, although the gain was not large enough to give the Dow or the S&P 500 a win for the week.
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The fascinating graph above represents 2,000 years of economic history starting in 1 AD. It was produced by Michael Cembalest, head of investment strategy at JP Morgan.
The ebb and flow of economic dominance is interesting. India (orange) and China (red) dominated for roughly 1800 years. However, they were pushed aside by growth in the United States (green), Western Europe (shades of blue), and Japan (yellow) which peaked by 1950. Since then China has surged back toward a larger role.
The Economist published a different rendition that gives the time sampling on the x-axis a more rigorous treatment:
The Dow snapped a 4-day winning streak when it closed down 1.1% on Monday. Despite early optimism, stocks sank as the likelihood of a Spanish bank bailout faded. The S&P 500 and Nasdaq fell 1.3% and 1.7%, respectively. Somewhat paradoxically, U.S. stocks surged Tuesday despite the on-going bleakness in Europe. The Dow climbed 1.3% while the S&P 500 gained 1.2%. The markets fell Wednesday as worries about Europe and weak U.S. economic data dominated investors’ outlook. Broad market indexes were off between 0.6% and 0.9%. In a “bad news is good news” scenario, stocks lifted Thursday on the expectation that central bankers will come to the rescue as the U.S. recovery continues to sputter and Europe is awash in debt woes. The Dow gained 1.2% and the S&P 500 was up 1.1%. The Dow saw another triple-digit gain Friday as investors continue to focus on an intervention from the Federal Reserve and European Central Bank to stabilize markets. The Dow, S&P 500, and Nasdaq gained 0.9%, 1.0%, and 1.3%, respectively.
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