Are there any more important things in life than freedom, health, and family? Prosperity is surely in a close race to make the top three. On this Independence Day weekend, we should celebrate the excellent health of our American economy. The major market indices are at new highs and a 6.1% jobless rate is the lowest in six years. We have debt, political fighting, and international concerns…but there is no denying that records arebeing set in the US financial markets. Will our prosperity continue?
On Thursday, the Dow flew over 17,000 for the first time in history. The economy added 288,000 jobs in June. The Federal Reserve Board continues to taper loans and the ultra-low interest rates are benefitting business and housing. The S&P 500 and the NASDAQ have gained 7.4% in the first half of 2014, more than double the 2.8% gain of the Dow. The 10-year Treasury is relatively unchanged from a year ago with a yield of 2.64%. Oil, gold, and silver are slightly ahead of last year’s prices.[1] The median price of a home in California rose 11.7% from May 2013, but low inventory held sales volume down.[2] The biggest sector gainers this year have been Utilities +17%, Energy +13%, Healthcare +11%, and Technology +8%.
What are your favorite summer activities? Family visits, beach or pool, travels by trains, planes or automobiles? Take a hike, go for a bike ride, or visit an amusement park? Have a barbecue in the backyard or dine out at a new restaurant? High on your summer list should be a concert or movie in the park. It may not matter whether the venue is your local park or the Hollywood Bowl. Outdoor music on a warm summer night is a delight.
“Getting old is not for sissies.” Bette Davis.
“Retirement is an unnatural phase of life and has run its course,” writes Mitch Anthony of Financial Advisor Magazine, in the May, 2014 edition. A mandatory retirement age was created as part of the Industrial Age and later used as a lever to move older workers out of the work force during the Great Depression. In 1935, the average worker lived to age 62. Today, leisure is viewed by many as a catharsis…becoming monotonous…and dulling the intellect and spiritual impulses that lead to a life of fulfillment. Statistically, 60% of those who retire this year will be seeking part-time work within twelve months. In the past, retirement has been nothing more than an artificial finish line. We don’t break the tape at age 65 and receive a gold watch and a pension any more. People are sprinting past this age and saying “I’ll tell you when I’m done, not vice versa.” People are working wellinto their 70’s and 80’s, heading toward the frontlines of cultural and world needs, making a difference and participating in their loved ones lives. The extra income and the feeling of contribution or a job well done…these are the valuable benefits of working beyond the artificial finish line.
“Leisure is a beautiful garment for a day, but a horrible choice for permanent attire.” William Shakespeare
Drones are making news…and in particular on the Fourth of July. You have probably read or heard about the invasion of privacy by low flying, personally owned drones. As well as the military applications, these helicopter-like personal spies are flying around concerts, homes, and taking pictures of movie star weddings. We now have airborne paparazzi. Currently, many new laws are being considered and passed on how to curb the proliferation of these new flying machines mounted with Go Pro cameras. Now, according to Forbes magazine, flying a drone through fireworks can land you in prison. The flight of a drone in the airspace above a fireworks display can create an increased risk of hazardous debris falling into spectator areas. There is also the possibility of the drone colliding with a firework and thereby diverting the pyrotechnic downward into spectator areas causing it to detonate. There are certainly many terrific uses for drones, both for military and for personal use…but there must be some regulation to protect us from the dangers of these devices…not to mention being able to enjoy an afternoon in our own backyard without some miniature hovercraft floating above us taking video and snapping photos.[1]
The prognosticators and pundits could hardly be more divergent these days. Two headlines caught my eye on the same day, June 24th. The first one was about Yale Professor and Nobel Prize winner, Robert Shiller “It looks like the peak. Shiller’s CAPE is waving the caution flag.” The CAPE referred to here is the formula of cyclically adjusted price earnings. Plotting this ratio since 1881, Shiller’s numbers presage doom for equities.[2] The very next headline that same day declared quite the opposite: “Bull markets won’t die of old age. Dow 44,000 is coming.” Brian Belski of BMO Capital Markets predicts a 15 to 20 year secular bull market ahead.[3] Who should you believe? As the saying goes, “Ask two experts in the room for their opinion and you’ll get three answers.”
Let us always remember the people, especially our own loved ones, who sacrificed for our freedom at home and all over the world…as well as the courageous men and women who currently put their lives on the line for us every day.
“I like summer. I like warmer weather and long days. I’m one of those silly people who still enjoy lying in the sun – my children are horrified!” Danielle Steel
Today’s the day.
Mitch Fisher
[1] Forbes Magazine 7/4/14, [2] Yahoo Daily Ticker 6/24/14, [3] Yahoo Breakout 6/24/14, [1] LA Times 7/4/14, [2] Berkshire Hathaway Home Services 7/14