Nowhere to run- nowhere to hide

Last week, stocks dropped and the Dow is -4.71%, year to date while the S&P is -8.98%, year to date, in what was the worst one-week performance since October 2008. The S&P is the top 500 stocks and our portfolios have dividend paying stocks and bonds paying interest to create cash flow and yield so we are not 100% correlated to the S&P. We report on it since it is a widely followed gauge of the market but our returns are not consistent with an all stock portfolio.

Volatility seems likely to stay as the movement of the market swings several hundred points intraday. We have a government showdown date in November for the deficit spending plan to try and correct what the politicians could not pull together in August. They put the S&P rating of the United States in jeopardy with a downgrade.

It has been difficult to hang on to the roller coaster. Everything is not as bad as it seems.  The current Greece crisis is taking the attention away from good news from corporations with good balance sheets, improved earnings and stronger than expected manufacturing and construction spending activity in the U.S. We are focused on the end of the year and into 2012.

Greece and the European debt crisis continue to drag on but they seem to be making progress toward a decision on a structured Greece default. The European Union bailout will be costly, just as the United States bailout was, but it is the best option for the Euro.  How does it affect the U.S.? 27% of U.S. exports of our goods and services in 2010 went to European buyers.

Operation Twist

It is official Federal Reserve news that the yield on savings and CDs will continue to be near zero until mid 2013. They have pledged that rates will remain low for the next two years in the hope that the housing market will get a boost from buyers able to afford a low mortgage rate.  I don’t think the housing market will show a meaningful recovery for five more years and it will again be a “lost decade” for real estate.  Many are trying to hang on to homes that are underwater by waiting it out or renting out homes they could not sell. This has forced many into the role of accidental landlord.

Commodities have finally had their correction: Gold, oil, silver, and other metals fell in the first week of September and were overdue for a serious correction. Oil is currently at $77 a barrel and gold trades at $1,622. The dollar has strengthened against the Euro to 1.3199.

Sandy update - My long training is over

I finished the year of long training (bike rides from Huntington Beach to Corona and back each Saturday) and races.  Nikki is playing water polo and swimming for Los Alamitos High School so I am looking forward to seeing her games and swim meets.  Nikki and I swam together in the Seal Beach Rough Water one mile swim in July- our first ocean race together. She now has more respect for ocean over pool swimmers!  I was also the swim course race director of a local half ironman triathlon in Orange County- the inaugural year. The swim took place in Salt Creek beach in Dana Point and I enjoyed swimming there on practice swims without the kelp beds and giant squid!

Debit Card Fees

Last week, Bank of America announced that they will be charging a $5 per month debit card fee.  Use your card once, to buy something like a $1 bottle of water and you will be charged the fee. The fee is only on purchases, not on ATM cash withdrawals.  Those fees (if any) are not changing.  Wells Fargo and Chase will eventually implement similar programs.  Pay attention to what your financial institution sends you in the mail.  The workaround?  Use a credit card instead of a debit card, as long as you pay it off each month.  Also, use a credit card that has a benefit like travel mileage, cash back, etc.  The other option is to explore other financial institutions like credit unions or other banks that still offer free services.

Asset Planning Charity Golf Tournament

On October 22nd, we are holding our 2nd annual Gail Moreno Golf Tournament to help raise money for the Breast Cancer Angels charity.  You should have received your invitation via email or mail, if not and you are interested in playing please call or email us, there are a few spaces left.  This year we will be having a helicopter ball drop. If you don’t play golf, but still want to be involved, we are having a bucket of numbered golf balls dropped from a helicopter onto the golf course, immediately prior to the tournament.  Each golf ball is assigned to someone who has paid $10.  The golf ball that lands on the mark, or closest to mark will win the recipient $300. All of the rest of the money raised will go directly to Breast Cancer Angels. You do not need to be present to win,... but it’ll be fun to watch.  You can contact us if you would like to reserve a ball.

We are thankful to our wonderful sponsors who have donated money or gifts.  Eagle sponsors ($1,000+) are TD Ameritrade and Ian D. Brodie, MD, Inc;  Food Sponsor is Principal funds; Birdie Sponsors ($500+) are Payden & Rygel, Wasatch Funds, Ariel Investments, Stan Hartford-Estate Attorney, Pamela Ivy White-Long Term Care Insurance specialist and Parnassus Funds; Par Sponsors ($100+) American Century Investments, Charles Schwab, Natixis Global Associates, TFS Capital, Blue Skies LLC and Atrium Dentistry.

You can find more information at

Stay healthy and enjoy the fall holidays!

Sandy, Carol and Erin