Space is a keyword this month. We have the space shuttle Endeavour cruising through the streets of Los Angeles. Skydiver Felix Baumgartner dropped 24 miles from the sky to earth in a parachute at 800 miles per hour. This month is the 50th anniversary of the Soviet threat to launch missiles through space at the US from Cuba. How can these events relate to your money?  Allow me some wiggle room to make a few connections.                           

After traveling 123 million miles in orbiting the earth, Endeavour crawled through clogged streets for hours during its 12 mile journey to the California Science museum in LA.  Financial connections: Even the once highest flying investments can be slowed down and should be retired. American ingenuity in space exploration is a good reason to invest in American business inventiveness…especially in the areas of technology, transportation, energy, and biotechnology.

It required 2 ½ hours for Felix to ascend…and only 10 minutes to fall back to earth. He had a 40 point checklist of items that he reviewed at mile marker 19. His preparation paid off. He broke a world record by plunging from more than 127,000 feet. Financial connections: Doing your homework before you make an investment can be crucial to your success. Also, gravity is a very powerful force that can pull down investments at a high speed.

President John F. Kennedy stood strong against the Soviet Union during the Cuban missile crisis in 1962. He did not have much support initially from our allies. He knew that the Soviet ballistic missiles could hit the US within minutes of being launched from Cuba. Kennedy cautioned Americans that we might have to once again pay “the price for freedom”. The leader of the Soviet Union, Nikita Khrushchev, finally backed down and a catastrophic nuclear war was averted. The famous “hotline” between the super powers was created. Financial connection: We have always had threats made against our country and our way of life. Investment decisions should not be predicated on fear…but rather on fundamentals and good business sense. Despite the terrorist threats of our adversaries…we survive and thrive in most every way. 

The DOW, on October 5, 2011 stood at 10,940. A week ago Friday it closed 24% higher at 13,610. The S&P 500 during the last 12 months has climbed from 1,144 to 1,461 or a gain of +27%. The NASDAQ has moved up from 2,461 to 3,136, also a gain of +27%. Gold is currently at $1749 per ounce, up 4.4% for the last 12 months. Sectors that have increased more than 20% this year have been technology, telecommunications, healthcare, and financials including real estate. The average dividend yield of the S&P 500 is currently 2.2%, nearly 2% higher than an average 6 month CD. Last week, unemployment fell to 7.8% and non-farm payrolls increased 114,000.[1] 

With the markets on such a great hitting streak, and the big election less than a month away, what could be a rally stopper?  More importantly, what will be the financial direction following Obama versus Romney?  Let’s hear from some pundits. Todd Schoenberger from the Back Bay Group: “You should be long on equities. I’m a big bull. The S&P 500 will rally another 7% in Q4 to close 2012 at 1,550.” Dawn Bennett of BGFS in DC writes: “Looking forward, we believe investors should focus on emerging markets and commodities, which should outperform the US and Europe.”  Monty Agarwal of MACM in Florida says: “The worst period of the US economy will be the fourth quarter of 2012. You have high unemployment, scarce capital, and lending drying up. Consumers, businesses and governments are strapped for cash.”  Finally, author Jim Jubak sums it up this way: 

“Right now it looks to me like the market wants to move higher in the fourth quarter…expectations that may ultimately be disappointed in 2013. I think the risks are reasonable right now in increasing your exposure to growth.”  For our clients, we are trying to be very cautious about jumping deeper into the market for the next few months. Why? Let’s have a brief look at a few historical reasons to be careful at this uncertain time. 

In the last three election years, October was a downer for equities. The Halloween month has been famously ghoulish to investors. The big crashes in 1929 and 1987 both occurred in October.  In the year following a Presidential election, the DOW has averaged a gain of merely 1.9%. By contrast, the DOW has an average gain of 10.4% in pre-election years. The DOW has lost ground 24 times out of 44 post-election years.[2]  These factoids should only tend to guide us perhaps while the market prices are peaking. In the long-run, the price of haircut, a stamp, or an automobile goes up…and so do prices for good investments. 

We continue to favor blue chip, dividend paying companies as good places to invest over time. While their prices may bounce around, the yields are far better than CDs and Money Markets. For growth investors, we suggest technology, real estate, telecom, and healthcare as the most likely sectors to succeed in the future. 

You should have almost everything squared away now at Charles Schwab. There may be the occasional straggler statement from National Financial. If you have private real estate, equipment leasing, oil and gas, or annuities that appeared on your previous statements, these will require more time to be relocated. The next big move will be our conversion from the retail shares of your mutual funds for lower expense institutional shares to save you money.  Look for these exchanges to take place in November and December. 

On a personal note, I would like to send get-well wishes to Ed Woore.  For clients Ginger Steel, Denise Olazar, Pamela Van Heuver, Drew Antablin, Woody Wilson, Jim Kahal, Paul Hackmeyer, and Tome Zipp…we’ve reached or exceeded our 21st anniversary of working together. Thank you for your trust and confidence through all the years. 

The winners of Detroit vs. New York and St. Louis vs. San Francisco will meet in the World Series.  

Please be sure to exercise your precious right to vote!

Mitch Fisher



Pacific Sun Financial Corp; 95 Argonaut, Suite 105, Aliso Viejo, CA. 92656                                                                Telephone: (949) 716-8646 Fax: (949) 716-8645 Website:

National Asset Management, Inc. (NAM) is a Registered Investment Advisor with the SEC. NAM provides fundamental investment management services. The views expressed contain certain forward-looking statements. NAM believes these forward-looking statements to be reasonable, although they are forecasts and actual results may be meaningfully different. Actual events may cause adjustments in portfolio management strategies. This material represents an assessment of the market at a particular time and is not a guarantee of future results. This information should not be relied upon as research or investment advice regarding any security. One cannot directly invest in an index. Index performance returns do not reflect any management fees, transaction cost or expenses. Indices are unmanaged. S&P 500 Index is an unmanaged index of 500 common stocks chosen to reflect the industries in the US economy. DOW Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange.  NASDAQ is a computerized system that facilitates trading and provides price quotations on more than 5000 of the more actively traded over the counter stocks. Investment Advisory Services offered through National Asset Management, Inc SEC Registered Advisor. NAM or Pacific Sun Financial does not offer any legal or tax advice.  One should consider consulting with a legal or tax professional before implementing investment strategies. 

[1] J.P. Morgan 10/8/12

[2] Business Insider 8/31/12