Articles

The Government Deficit is Shrinking and Other Shocking News

Markets have continued to climb higher over the last month, adding fresh gains to an already impressive run over the last year. This begs the question of how much farther can this go? At this point market valuations still seem relatively cheap to some historical comparisons and an improving government fiscal situation is adding some wind to the market sails. There are some storm clouds on the horizon however as the Federal Reserve seems to be considering cutting back on its easy money policies, potentially creating a rising-rate environment. Fed policies have supported stock markets over the last few years and kept borrowing rates low. While we are concerned about the longer term effect that an eventual rising-rate environment will have on markets, we do expect things to continue to be positive for market valuations over the next year or so. Read more »

Scary Headlines Continue to Stalk an Otherwise Strong Stock Market

Explosions in Boston, economic implosions in Europe, continued political nonsense in D.C., and similar headlines continue to fill newsstands and newsfeeds. While all of these items should not be brushed aside, they should be briefly reviewed and moved on from in order to avoid getting caught up in the drama. These events are overshadowing the good economic news, especially domestically, and unnecessarily stoke investor’s fears. As the data in this article will show, there are plenty of reasons to be optimistic right now. Read more »

Guess this Team Member

Welcome to a fun new series, designed to help you get to know our team members better. We invite you to "Guess this Team Member"! Read more »

Balance Sheet Blues

As I write this, the DJIA is barely off record highs. At the same time, Cyprus has now become the new EURO poster child and you can expect to become bombarded with commentary about how the Russians are laundering money through Cyprus, and the potential of taxing deposits at commercial banks in order to rescue the Cypriot economy. In one fell swoop, the Russians will be punished and Germany will not have to rush to the rescue again. As you may imagine, anyone with money in a Cypriot bank is not enthused, and money is moving out of the banks as fast as the ATMs will run. Can anyone say Greece? Read more »

Good Economic Data and Cheap Stock Valuations Continue to Soothe Politically Inflicted Headaches

We have so far survived the fiscal cliff, the debt ceiling, and now it’s on to debating sequestration. Markets have managed to dodge these political bullets so far, partially because of the continual last-minute fixes passed by the politicians, but also because of the economic underlying strength of the economy. This strength has enabled markets to view the political wrangling as mostly the noise that it is. While politics continues to cause some headaches, current CWM account positioning has been validated as more positive economic data comes in, equity valuations remain cheap, and bond assets continue to look expensive. Read more »

2012 Tax Time Checklist

Read This Before You File! We've compiled this list and descriptions of the documents you or your CPA will need to prepare your 2012 taxes with respect to your CWM managed accounts. Read more »

Markets Strong Despite Political Headwinds

Political mischief continues to plague the stock markets causing unnecessary stock volatility in an economy that otherwise has every sign of growth and recovery. This month we will review the pressing matters occurring in our nation’s capital, new consumer debt and unemployment data, and what early market strength might mean for this year’s market outcome. Let’s dive right in. Read more »

Eyes On the Fiscal Cliff

First, let me state that this is a positive end of year message. Comprehensive Wealth Management (CWM) has been receiving an increasing number of concerned calls and meetings about the Fiscal Cliff. So, why are we fully invested as I write the December 2012 article? Because the economic data is steadily improving and there are literally trillions of dollars sitting in cash globally. These dollars are earning nothing! In fact, these assets are losing purchasing power steadily due to inflation and taxation. Read more »

Holiday Recipe: Petite Pumpkin Pies

This year's holiday recipe comes from our newest CWM team member Andrea, for her Petite Pumpkin Pies. These little pies are sure to impress any crowd, and the recipe is easy for all cooking levels. Delight your holiday guests with this conversation-starter dessert. Read more »

Going Long

No, I am not talking about a Hail Mary pass, but long the stock market. With the election now behind us and the consequences yet to come, why would I even consider going long? The fact is that stocks, by any historical measure, are CHEAP! Respected author of "The Future for Investors", and Professor at the Wharton School, Jeremy Siegel points out: since 1935, the average price-earnings (P-E) ratio of the S&P 500 has been 16.9.[1] Investment opportunities are highest when the ratio is substantially below this average. Currently, stocks are selling for 14.6 times 2013 projected earnings. Also, when ten-year U.S. Treasury bond yields are below their 50 year average of 6.7%, the P-E of stocks has historically been 23.6. This means that stocks are not only cheap on an absolute basis, but increasingly inexpensive compared to fixed income investments. Read more »

Economics and Elections

Not surprisingly, market apathy seems to have taken hold so far in October as everyone awaits the outcome of the November election. This has resulted primarily in a slow decline over the last few weeks. The CWM position is that this current market weakness is nothing to worry about as most economic data is actually looking up, with only the election outcome being the major immediate source of uncertainty. Read more »

Increasing Stock Values

Despite current fears around the world, the market has rallied over the last month. This rally can be greatly attributed to world governments’ efforts to boost their respective economies through support structures that have the added bonus of increasing stock values. The United States is no exception, as the Federal Reserve recently launched another round of quantitative easing (QE), which, along with some improving economic data, should further support a still relatively cheap stock market. Read more »

Pessimism and Recovery

Markets have rallied strongly over the last few months, yet a pervasive sense of fear continues to permeate the thoughts and behaviors of investors. Fear, like greed, creates its own set of opportunities and complications when it comes to investing. Investors who are nervous about future market performance have a tendency to sell riskier assets and pursue safety. This eventually creates an environment where risk becomes oversold (therefore cheap) and safety becomes overbought (therefore expensive). Though debt issues in Europe continue to be the major cause of current market stress, CWM believes that this climate of fear has created real potential for future market gains. Read more »

Risk On, Risk Off

In the investment world, we work very hard invest for the upside (risk on), but also protect against the downside (risk off). The reason for this is that we have discovered over many years that stopping the slide in a down market is more effective for long term growth than staying in, taking the hit, and then hoping that the market will bring us back to profitability. Read more »

The Case for Contrarian Investing

It is no surprise that investment professionals and amateurs around the world have differing opinions about whether the current volatile situation represents a danger or an opportunity. As usual, our answer is, “It depends!” If you are in the right place at the right time, are well positioned, or have specialized knowledge, you can make it an opportunity. Read more »

The Biggest Tax Increase in History

Current investor concerns about the likelihood of a significant tax increase at year end will very likely have a drastic effect on the market in the near future. To position our clients for this, the CWM investment team is thinking outside the box to develop new strategies to meet this challenge, including alternative investment options and new diversification methods. Read more »

Market Update: April 2012

The recent market activity in April has given us at least some of the negative correction we had been expecting from markets. As we stated we would do last month, we took the opportunity to reinvest client’s assets in some different ways to capitalize on what we believe the future trends will be. As usual, we will delve into the topics that we believe will have the greatest impact on the market over the near future. Since I am a bad news first kind of guy, please do not panic too much about the first section. I will cover the more positive data further on in the article Read more »

Market Update: March 2012

Markets have risen nicely this year, mostly thanks to significant actions by world central banks and a seeming invincibility to a number of troubling world events. Read more »

Market Update: February 2012

It appears that the volatility will continue to be with us for some time to come. A very real risk for 2012 is that the politicians will continue to implement policies that they have followed many times in the past: devaluing national currencies and creating inflation. This would spell disaster for those who have placed the bulk of their savings in cash or bonds as citizens' purchasing power deteriorates. We simply must not be caught in the wrong asset classes as this occurs. Read more »

Tax Time Check-List

There were several changes last year regarding tax reporting that should make tax time MUCH easier for you this year. We recommend that you provide a copy of this article to your CPA so that he or she can assist with the process as needed. Read more »

Market Update: January 2012

It is a brand new year that is bound to be full of new surprises. As always, we will take a closer look this month at some economic data points we feel will have an influence on how financial markets will perform this year. Improving domestic data, like unemployment and real estate, have set the scene for potential value growth, while issues in Europe still continue to plague markets and will likely cause of a great deal of volatility this year. Read more »

Market Update: December 2011

Last month, I wrote about the overwhelming evidence (at least to me) that the political manipulation of the past several years has worsened financial problems on both a global and national scale. You might think that I am feeling extremely bearish because of the ineptitude of our supposed leaders. With that as back drop, let me spread some Christmas cheer! The human endeavor is simply too vast for any government or even a consortium of governments to screw it up for long. I am short-term bullish and very bullish for the long term. Why? According to National Public Radio, we exceeded a population of 7 billion people on the planet a few weeks ago. I submit that those people have the same basic motivations as we do. We want security for ourselves, our children, our friends, and neighbors, and so do they. Read more »

Holiday Recipe: Leche Flán

From client Judy T. comes this luscious holiday “Leche Flán,” a variation of a traditional Filipino recipe. Your CWM team was lucky enough to sample this decadent treat, thanks to Judy, and it comes with our full stamp of approval. Delight your holiday guests with this original melt-in-your-mouth dessert. Read more »

Market Update: November 2011

Hopefully, the subtitle of this missive is enough to elicit your interest. I freely admit that most of this communication is my personal opinion, backed by over 56 years of life and 39 years of investment experience. When the discussion turns to investment history, it will be documented, but for the most part, this is an editorial piece concerning what I believe are huge mistakes, past and present, which are costing the American people their prosperous futures. I think it is time I weighed in on what I unenthusiastically describe as the most frustrating period of time I have ever seen in an investment career spanning from 1972 to 2011. Read more »

Market Update: October 2011

The last month of stock market activity can only be described as utterly perplexing, with both significant positive and negative market swings. This volatility is not overly surprising after noting the complete ambiguity of government policy in the main economic countries of the world. Policy action around the world has been one of the main driving forces in market movement over the last few years, and thus a lack of clarity in this area should be expected to cause some turmoil. Drama in Europe continues to be the primary daily market mover, but China is now working its way into the headlines with its own set of troubles, and polarized politics here in the U.S. are also having their own destabilizing effects. Nevertheless, there are still some reasons for optimism even in the current environment. As always, we must consider all of the positives and negatives when deciding on future investment exposures. Read more »