In the film “My Big Fat Greek Wedding”, Toula is going through a mid-life crisis. She wants to work outside of the family restaurant, take computer classes, and date someone who isn’t Greek. Her father Gus, who fixes everything by spraying Windex on it, cannot accept the change in Toula. In the end, Gus surrenders his traditional ways for the happiness of his daughter. Will the current Greek government and citizens accept the economic changes for future prosperity as demanded by their neighbors?
The noise in Europe has been accompanied by the sounds of an impending interest rate hike here in the USA. These developing stories have given the markets something to jump up and down about. Economic indicators and corporate earnings have been going well over the last few years so the news people need something exciting for us to watch…and to instill fear that the sky is falling, again.
The first half of 2015 is now in the books. The markets saved their worst for the final day of June by using the Greek crisis to sell-off and to preserve some of their gains. Here are the important market index numbers through June 30th: S&P 500 +0.20%, DOW -1.14%, and the NASDAQ +5.30%. During the past six months, the NASDAQ climbed over 5000 to score an all-time record high. The DOW was held down by the likes of American Express -16%, Chevron -14% and Du Pont -13%. The big gainers were Disney +21% and Apple Computer +13%. Healthcare, Consumer Discretionary, and Telecom sectors did well in the first half while Energy and Utilities were down. A 10-year Treasury pays 2.49% and a 30-yr fixed mortgage is averaging 4.19%. Gold, silver, and natural gas declined in the first half. A barrel of crude oil was higher by 11%.[1]
Millennials are tech savvy, sociable, creative and…they are a very untrusting group. According to a recent Goldman Sachs survey, a majority of those between the ages of 18 and 34 do not want to buy a home, do not want to buy stocks, and do not want to look to anyone for advice. [2] Really? Some years ago, our Uncle, Dr. Joseph Kaplan, former Chief of Staff at Cedars-Sinai Hospital told me: “As a doctor, it makes me uncomfortable to see other doctors taking a lot of time picking stocks and trying to make money. There is so much to know about medicine. I hire a financial professional and spend my time being a doctor.”
Pac Sun Financial People: Congratulations to Judy Slone on her third Anniversary with Pac Sun. Since the moment she arrived, Judy has been outstanding in every way. She exudes trust and provides exceptional client service with great efficiency. Thank you, Judy. We have also been joined by Ryan Fisher, Attorney at Law. In addition to managing Shift Sector, a national auto racing company, Ryan’s legal work focuses on business formation and transactions, investment management, tax and estate planning. Welcome Ryan.
Investment Policy Statement (IPS): We are currently in the process of developing an IPS for every client. This customized, written investment plan serves many purposes. It establishes or refreshes your general objectives, time frame, tax considerations, asset allocation, and risk tolerance. It keeps investor and advisor current and on the same page. The IPS brings clarity…like adjusting the focus on a pair of binoculars. We hope to have an IPS for each of you by the beginning of 2016.
Too many Money Managers: This country’s biggest public pension fund, the California Public Employees’ Retirement System, aka Calpers, is cutting its outside managers and hedge funds by 50%. The 212 managers who currently invest $305 Billion will soon be reduced to 100. “We’ve been working for years to reduce the risk, cost and complexity in the portfolio,” said Calpers spokesperson Joe DeAnda.[3] Who needs that many cooks in the kitchen?
The Chicago Blackhawks became NHL champions and the Golden State Warriors were crowned kings of the NBA last month. Congrats to our family, friends and clients in Chicago and the Bay Area. In the final series of each sport, extraordinary skill overcame physicality. Brute force and intimidation took a back seat to defensive quickness and expert shooting. Instead of season-long stars Jonathan Toews for the Hawks and Stephen Curry for the Warriors, it was Duncan Keith and Andre Iguodala who grabbed each series’ MVP. It was a pleasure to watch the terrific teamwork and enthusiasm at the highest level in these sports.
By using computerized models and algorithms, Robo-investing is becoming popular with do-it-yourself and younger investors. The advantages are primarily lower costs with fewer and perhaps less emotional decisions. Charles Schwab has recently entered the competition with a new service called Intelligent Portfolios. This automated method of selecting and rebalancing investments could turn out to be a force in the future…but I doubt that most wealthy investors will adopt it. Investing has always been an art, not a science. If someone really discovered a fool-proof formula for generating high and consistent returns…then Warren Buffet and many financial professionals would be spared the need for research and never have a bad year.
Most growth-oriented portfolios bloomed in the spring of 2015. Last week, the first summer heat wave had a wilting affect on the markets. We have a Greek tragedy setting up to knock the markets down this week. The economic droopiness may continue for awhile with looming interest rate hikes around the corner. Water and fertilizer, such as more jobs and positive corporate earnings, should restore the market’s plants and flowers to good health and vibrant colors.
Today’s the day.
Mitch Fisher
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. The NASDAQ is a global electronic marketplace for securities as well as the benchmark for U.S. technology and biotechnology 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 Asset Management
[2] Bloomberg 6-24-15
[3] Jason Zweig- The Intelligent Investor