Monument Wealth Management

Best Places to Work 2013

bkaschak — Fri, 22 Mar 2013 17:56:55 +0000

Meet these workplaces ruling the region…

Hasty Decisions May Cost More Than Higher Taxes

bkaschak — Fri, 16 Nov 2012 21:33:30 +0000

With all the ominous talk of tax increases and a “fiscal cliff” if President Obama and Congressional leaders can’t agree on a plan to avert automatic tax increases on Dec. 31, some investors may be tempted to act soon to take advantage of the current tax rates.

But financial advisers say that in their rush to doing something this year, investors may end up with regrets.

Planning For Liquidity

bkaschak — Wed, 14 Nov 2012 17:36:41 +0000

Despite the shaky U.S. economy, many entrepreneurs continue to start and grow their businesses here and amass great wealth in the process. But many of them aren’t adequately preparing for the day when they will need to unlock that wealth.

Many of today’s entrepreneurs are paper rich, with up to 90% of their net worth tied up in illiquid company equity. It’s not until they undertake a liquidity event—a full or partial sale of their businesses—that they will have the liquid assets normally associated with a person of affluence.

All-Weather ETF Portfolio Strategies

bkaschak — Thu, 01 Nov 2012 16:12:03 +0000

Advisors are always looking for ways to improve client outcomes. These days an increasing number are turning their sights to exchange-traded funds (ETFs) to help them construct client portfolios. Where in the past an advisor might have looked to a basket of securities to create exposure to a particular sector or geographic region, now he or she can accomplish the same thing easier and cheaper with an ETF with just one trade.

Caution! Edgy Language and Straight Talk Follows

Dharminder — Sun, 21 Oct 2012 19:15:18 +0000

The rapidly collapsing financial situation in Spain finally appears to be forcing the European Central Bank into action. Early Thursday morning, European Central Bank President, Mario Draghi, surprised the markets by announcing he’s ready to take more forceful action to save the euro zone. Specifically, he said, “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

This strong talk sparked a strong equity rally on both Thursday and Friday. Here’s how the market ended up for the week.

Second quarter U.S. Gross Domestic Product (GDP) was reported last week and showed that the US economy grew at a 1.5% rate.

In an effort to use less financial jargon and use more everyday language – that kinda sucks.

This reading was just about in-line with what analysts estimated. It further confirms our view that economic growth has been poor. The press uses the term “soft patch.”

I use “sucky.”

But the terms poor, soft and sucky do not mean negative. And they do not mean that a recession is necessary coming. Nothing we are seeing in the data suggests that slow growth will be turning into negative growth. Go back and read my missives from the fall of 2011 or 2010 for that matter…they all say the same thing– That a reading of 1.5% is a long way from zero.

One piece of good news is that investors are already positioned defensively.

Why is that good news? Because they are all “waiting till the market gets better.”

Hello!? Waiting until the market gets better? DING DING DING!!! The S&P 500 is at 1380!

Get better from what level? …from the 700 level in March of 2009? How about from the 1022 level in the summer of 2010 when everyone was screaming about the Double Dip Recession? Or better, from the 1130 level in September of 2011 when Double Dip Recession Part II was hitting the news? How about better from the recent short term low of 1280 in late May of this year?

Why not wait until the U.S. GDP is back up at 4% and the S&P 500 is trading at 1500!?

These investors will, at some point, decide they can no longer be out of the market. They will pour out of bonds and buy into the equity market.

I have an opinion – could I be wrong? Sure. But my opinions are not grounded in stupidity. Interest rates are near-zero, there’s lots of money to be invested, and housing is coming on. If you are an investor for the long-term, you should be in the market. Additionally, over the past seven years, money supplies in the Eurozone, the U.S., and China have all increased, they are all currently increasing, and they are all likely to continue to increase. Sooner or later, this increase in money will move through asset prices and then through the economy.

Upcoming Week

The upcoming week will be very busy. We have the Fed meeting on Tuesday and Wednesday, which could produce new action designed to stimulate the economy.

The European Central Bank (ECB) meets on Thursday. Given Draghi’s comments last week, the ECB could announce new plans to help Spain and Italy.

Finally, the U.S. labor report will be released on Friday. I think we will see that the sluggish economic growth over the recent months has diminished the outlook for the unemployed, which will increase the odds that the Fed will eventually take action.

…and no one should fight the Fed.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values. The 2, 10 and 30 year Treasury is simply the yield at the close of the day.

So Much for the Dog Days of August!

Dharminder — Sun, 21 Oct 2012 19:13:20 +0000

The news has been depressing lately. There’s renewed talk of recession, a stressed labor market, a restrained (spending) consumer and the ongoing euro-zone worries.

But you wouldn’t know it by looking at the major averages, which are all showing respectable gains for the year.

In fact – let’s take a look at a chart of the Standard & Poor’s 500 Index since the end of last September.

Now ask yourself how many times you heard that the sky was falling over that time. Yeah, sure there are plenty of scary sell-offs in there.

This rally has been dull. Additionally, the volume has been very light, especially last week. Pick up any weekly financial publication and you can’t miss the references to the light volume.

Volume? Seriously?

If you are an investor with a good plan and a good investment strategy going about your everyday life enjoying yourself and your summer, do you really care that we got within multiyear highs on light volume?

So how did we get here?

First, the Q2 earnings season. Top line revenue results were horrible with over half missing their forecasts – the worst since the 2008 crisis. Also, profits weren’t up much from one year ago, and will most likely come in at only 2.8% higher. BUT, profits did manage to beat the lowered expectations, and investors let out a collective sigh of relief.

Second, and more importantly, the expectation of central bank intervention is really helping.

Third, the housing sector is rocking and as long as it holds up, there is little chance of recession. Housing is important for employment, but more important are the prices of houses. If someone sells their home for a higher price, everyone in town feels good. They feel RICHER. And that helps confidence. The National Association of Realtors reported that prices are increasing in 75% of towns across the U.S.

Forth, there have been some positive economic reports out lately – July payroll data from two weeks ago was pretty good and there was another decline in weekly unemployment claims last week as well.

Finally, the deepening crisis in Europe may be forcing the tough-talking yet ever-reluctant and conservative European Central Bank (ECB) into action.

So even though we are experiencing a global growth slowdown, there are some pieces of good news that are contributing to a nice rally.

Upcoming Week

Looking to next week, the economic calendar includes the release of retail sales. After three consecutive monthly declines (April, May & June), better-than-expected same-store sales from the major retailers have analysts betting the losing streak will come to an end when the report comes out for July. It would be a welcome report to see July with a positive outcome.

Our Thoughts

Our position remains that the U.S will not see a double-dip recession so long as housing does not experience another downturn, and our domestic economy will continue to grow in the most modest of ways. 2012 will probably end up looking a lot like 2010 and 2011 where slightly weakening or sideways markets will give way to improvement over the fall. Given that a little weakening or sideways action would take place from a +11% YTD number on the Standard & Poor’s 500 (S&P 500) suggest to us that the overall YTD return should be much better than people may think.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

Sell in May and Go Away is Not Looking Good This Year

Dharminder — Sun, 21 Oct 2012 19:12:19 +0000

Yeah – how’s that advice working out for investors these days? Patient and prudent investors will probably close the summer out with a 3 pointer from the top of the key and will get to yell out “IN YOUR FACE!” Or better yet, are yelling it out from their beach chairs…

Out of nowhere, we have seen a silent summer rally. I saw a clip this week of a financial advisor on Fox Business who was asked back on the show after calling May the beginning of a “bear market”. Watching him explain that call was as amusing as watching a 5 year old trying to get out of those tubular Finger Cuffs you get at a school fair.

While the week was a loser overall, both the Standard & Poor’s 500 (S&P 500) and the Dow Jones Industrial Average (Dow) closed higher on Friday as Federal Reserve (Fed) Chairman Ben Bernanke reassured markets by saying that the Fed still has “scope for further action.” The discussion over further easing will continue this week as the Fed chairman is scheduled to speak in Jackson Hole.

Here’s how the markets ended up for the week. Note that I’ve added some new information.

According to the minutes from the July 31 – August 1 Fed meeting released last Wednesday, it appears they are gearing up for new measures that they believe will encourage economic growth, better insulate the U.S. economy from global shocks, and lead to more acceptable conditions for the unemployed – all without stoking any inflation.

The minutes revealed, “Many members judged that additional monetary accommodation (this means new policy measures) would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery”.

Problem – There hasn’t been much economic data suggesting that “a substantial and sustainable strengthening” in the recovery is at hand.

Substantial? Hardly. Sustainable? Ummm…possibly. Substantial AND sustainable? No.

Fed members believe that another round of Quantitative Easing (dubbed “QE3”) would put “downward pressure on longer-term interest rates by contributing to easier financial conditions.” In other words, they believe it would encourage businesses and consumers to spend and borrow.

I think higher equity prices make people feel wealthier and that’s the best way to encourage additional outlays. In fact, with rates as low as they’ve been over the past few years, if people are not borrowing now it’s not because of rates.

Upcoming Week

In addition to the aforementioned Fed meeting in Jackson Hole, which will probably be the highlight of the week, we have European Central Bank (ECB) President, Mario Draghi, taking the stage on Saturday at Jackson Hole as well. His late July promise to do whatever it takes to save the euro has played a big role in calming European debt markets and providing support for U.S. equities. Market participants will be looking for more signs that the ECB is set to provide some follow through at its early September meeting.

Our Thoughts

Our position remains that the U.S will not see a double dip recession so long as housing does not experience another downturn, and our domestic economy will continue to grow in the most modest of ways. 2012 will probably end up looking a lot like 2010 and 2011, where slightly weakening or sideways markets will give way to improvement over the Fall. Given that a little weakening or sideways action would take place from a +11% YTD number on the S&P 500 suggest to us that the overall YTD return should be much better than people may think.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.

⁽¹⁾West Texas Intermediate crude spot price is as of end of week.

⁽²⁾London Bullion Market Association; gold fixing pricing at 3 p.m. London time.

Fed Chief Offers a Vigorous Defense

Dharminder — Sun, 21 Oct 2012 19:11:21 +0000

While it remains to be seen if the Federal Reserve bond purchases totaling $2.3 trillion since the end of 2008 have helped or hurt the long-term economy, Fed Chief Ben Bernanke mounted a vigorous defense last week of the Fed’s past policy. In fact, Bernanke pointed out that “It is probably not a coincidence that the sustained recovery in U.S. equity prices began in March 2009, shortly after the Fed’s decision to greatly expand securities purchases.”

For the most part, there wasn’t anything new said. There were no overt hints that a new stimulus was coming any time soon, but his strong defense of past policy seemed to be just the tone that traders wanted to hear.

For the month of August, the Dow Jones Industrial Average gained 0.6%, the NASDAQ finished up 4.3%, and the Standard & Poor’s 500 rose by 2.0%. As for last week, here’s the chart.

Jobs. They will be a big deal this week.

This Friday’s release of the unemployment rate and nonfarm payrolls could be the trigger for a new round of Fed easing if the numbers disappoint. The economy managed to create 163,000 net new jobs in July. Unfortunately, seasonal quirks may have helped bolster the numbers in July, so we could see some relative weakness in the August numbers that compensate for July’s relative strength.

Upcoming Week

The U.S. data calendar is crammed full of key reports for August: Institute for Supply Management (ISM), vehicle sales, ADP, Challenger layoffs, claims, and the employment report.

In addition, a number of high-profile leadership meetings are scheduled in Europe this week, as Spain continues to prepare to formally ask for aid from the European Union (EU), European Central Bank (ECB), and the International Monetary Fund (IMF), aka “The Troika.” The Troika is also in Greece this week assessing progress on Greece’s budget. France, Germany, Belgium, and most notably, Spain, will hold sovereign debt auctions this week.

Our Thoughts

The Song Remains the Same – Our position remains that the U.S will not see a double dip recession so long as housing does not experience another downturn, and our domestic economy will continue to grow in the most modest of ways. 2012 will probably end up looking a lot like 2010 and 2011, where slightly weakening or sideways markets will give way to improvement over the Fall. Given that a little weakening or sideways action would take place from a +11% YTD number on the S&P 500 suggest to us that the overall YTD return should be much better than people may think.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

⁽¹⁾West Texas Intermediate crude spot price is as of end of week.

⁽²⁾London Bullion Market Association; gold fixing pricing at 3 p.m. London time.

Summer May Be Over – But the Rally Is Not

Dharminder — Sun, 21 Oct 2012 19:10:09 +0000

Don’t look now, but the NASDAQ is trading at its highest level since November of 2000. Granted, it’s still a long ways off from its all-time high, but this rally is worthy of notice. It’s also important to observe that there are three sectors still down about 50% from their all-time highs. These include the Standard & Poor’s (S&P) Tech sector down -49.6%, Telecom down -55%, and Financials down -59%.

As for the S&P 500 index… it’s now only about 10% off from its all-time high.

European Central Bank

I don’t want to pretend that there is no news on this topic; I’m just tired of it, so I’m going to skip the details for this week. Basically, European Central Bank (ECB) President, Mario Draghi, reached a consensus. He announced on Thursday that the ECB would begin unlimited bond purchases of sovereign debt. It seems they finally recognized that without near-term action, the euro crisis was set to enter a new and very dangerous phase.

Jobs & the Economy

As I anticipated in last week’s blog, Friday’s release of the unemployment rate was not only relatively weak (my words from last week) but it was WEAK. PERIOD.

The economy managed to create 96,000 net new jobs in August, according to Friday’s report by the government. That’s nearly 30,000 below the Bloomberg estimate. June and July were revised down by 41,000.

The unemployment rate dropped from 8.3% in July to 8.1% in August. HOWEVER, the reason the rate fell – a 119,000 drop in employment was overshadowed by a 368,000 decline in the labor force (likely due to discouraged job seekers giving up on their search).

THIS IS NOT A GOOD THING. It’s just simple math, but we’ll hear all about it in the political world for sure.

There were some positive economic reports last week that imply the U.S. recovery is still improving. Last week’s positive reports included strong auto sales and a modest uptick in service-sector activity. Unfortunately, this growth has not been fast enough to spur any considerable jump in hiring.

Our Thoughts

Our position remains that the U.S will not see a double dip recession so long as housing does not experience another downturn, and our domestic economy will continue to grow in the most modest of ways. 2012 will probably end up looking a lot like 2010 and 2011, where slightly weakening or sideways markets will give way to improvement over the Fall. Given that a little weakening or sideways action would take place from a now +14% YTD number on the S&P 500 suggest to us that the overall YTD return should be much better than people may think.

Finally, to put some things into perspective, let me reiterate some of the following YTD returns:

The S&P 500 is UP 14.3% this year.
The NASDAQ is UP OVER 20%!
Small-caps, as measured by the Russell 2000, are UP 13%.

Most INVESTORS should be pretty happy right about now.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

⁽¹⁾West Texas Intermediate crude spot price is as of end of week.

⁽²⁾London Bullion Market Association; gold fixing pricing at 3 p.m. London time.

QE3 and the Kitchen Sink

Dharminder — Sun, 21 Oct 2012 19:08:52 +0000

It looks like the Fed decided on a new monetary policy that throws everything INCLUDING the kitchen sink at stimulating the economy and bringing down the unemployment rate. I’m sure that someone decided “Kitchen Sink 1” was not “fin-glish-y” enough to pass muster as a name to be captured in history, textbooks or upon gravestones so someone floated “QE3” and it flew.

We knew that the markets were anticipating the Fed would act, but the degree to which they decided to increase its balance sheet (creating new money) and buying bonds was met with huge enthusiasm by traders. For that matter, the people who think they are investors (but are really traders) should see my most recent U.S. News and World Report column.

Oh, and it wasn’t just stocks, which once again finished the week at a multi-year high. Oil, gold and myriad other commodities gained on the news as well, while the dollar continued to slip.

In text talk – btdubs, that’s what you would expect to happen when people pile back on buying the risky assets. Cool people with awesome cufflinks call this the “risk-on trade”.

Here’s how markets finished up the week.

The Details of the Kitchen Sink

The Fed said it will buy $40 billion in mortgage-backed securities every month until a significant improvement in the labor market is realized. The hope is that the housing market, now actually showing some life, will rebound faster while keeping mortgage rates low or even lower. There’s no doubt about it – the economy has a lot to do with housing and cars.

$40 billion seems like a lot unless you are an elected official, but the reality is that it’s not as large as the monthly outlay from Quantitative Easing 2, or QE2, (which could eventually be referred to as “the bathroom sink”). See, back in 2010-2011, QE2 amounted to $600 billion in Treasury bond purchases over eight months. That comes out to just about $75 billion each month. The difference now is that QE3 has no set end date. Hence “kitchen sink.”

In its statement, the Fed said “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.”

So it looks to me like the Fed will continue purchasing bonds until it sees substantial improvement and if it doesn’t happen, they will employ even more firepower.

If I drew funny cartoons for a living, I’d draw one of Chairman Bernanke standing at a grill squeezing a stream of lighter fluid from a bottle that said QE3 onto the word “economy” smoldering on the grill top…and fire working its way back up the stream. But I can’t draw – so there’s that.

Our Thoughts

We still like an over-allocation to small and mid-cap indices vs. the large caps and remain in the growth over value camp as well. Our fondness for economically sensitive sectors has not changed since the end of 2008. Specifically, we still like the Tech and Consumer Discretionary sectors.

Our position remains that the U.S will not see a double dip recession so long as housing does not experience another downturn, and our domestic economy will continue to grow in the most modest of ways. Much like 2010 and 2011, we could see a slightly weakening or sideways markets giving way to improvement after the election. Given that a little weakening or sideways action would take place from a now +16% YTD number on the S&P 500 suggests to us that the overall YTD return should be much better than people may think.

Btdubs – have you seen the YTD number on the indices in the above chart??? Seriously, does it feel like a year in which the S&P 500 is up over 16%!?

Most INVESTORS should be pretty happy right about now.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The prices of small and mid-cap stocks are generally more volatile than large cap stocks. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values. The 2, 10 and 30 year Treasury is simply the yield at the close of the day.

⁽¹⁾West Texas Intermediate crude spot price is as of end of week.

⁽²⁾London Bullion Market Association; gold fixing pricing at 3 p.m. London time.