It has been an month since protestors began their campaign to 'Occupy Wall Street' and it seems to me that their movement seems to lack direction.

1. First off, the really bad guys here are congress and big brokerage firms, not the banks. Sub-prime mortgages packaged into highly rated investments turned out to be boondoggle and we all paid the price. Interestingly enough, many banks had their arms twisted into making these loans in order to receive federal funds.
2. We had to bail out the banks to avoid an all out depression. And, it was our own government pressuring the banks to make bad loans.
3. Big brokerage firms creating collaterized debt obligations further escalated the problem and ripped off investor. Then, no one went to jail. That is just plain wrong!

Obama’s horrible jobs creation plan sparked concerns for investors which led to the significant stock market drop we experienced today. The Dow Jones Industrial Average fell 300 points and 10 Year Treasury yields hit a 60 year low at 1.9%. The overall feel is that we are going to continue to experience these up and down cycles for a while.

Additionally, European concerns remain strong, as expected; emerging rumors that Greece would default and the resignation of the President of the European Central Bank caused the European markets to suffer.

While the market has been particularly vulnerable to bad news lately, we are fortunately prepared for the nonsense until it subsides. For the short term, expect more of the same volatile swings. The long term outlook is that we will eventually pull out of the doldrums and the market will resolve itself.

The silver lining is that these interim swings present unique opportunities and values. I honestly love it when the market is like this. When things are looking bad and investors are getting out, that is the best time to buy. We’re going to hold onto the ones we know are going to do well, no matter what happens. Then, despite all the turmoil, we’ll most likely be in a position to make a buck after the storms subside.

I appreciate all the emails of support that you’ve sent us.  It is very encouraging to know that our work is appreciated.

 
The past few days on Wall Street have been relatively volatile. Sharp gains and losses mirrored investor uncertainties while the Economy continues to struggle to gain a foothold towards recovery. Job growth fell flat in August; although 17,000 jobs were created in the private sector, the same amount was lost in the government sector. This dismal outlook sent investors scurrying for cover.

Fortunately, we are well prepared for these rapid swings. So far, most of the numbers indicate that our Moderate Growth and Moderate Growth & Income Portfolios perform well above the market average, losing 1/2 to 1/3 on down days, respectively.

The deflationary protections put in place over the previous months are allowing us to fair far better during these difficult times. Despite the dismal financial outlook echoed by the press, the reality is that the market has not moved down much since it was 12,800 when compared to other ‘corrections’. Nevertheless, our approach aims to keep our clients bulletproof from potential threats.

During these wild market swings, we believe our ride will continue to be much smoother than what the stock market experiences. As the economy settles and recovers, we should be in a better overall position to take advantage of growth opportunities as they become available. Until then, our plan is to remain conservative and wait out the passing storm.

Make sure to read September's edition of Bulletproof Newsletter. This month we cover:

Make sure to tune into my show this weekend. My special guest, Dale King and I will be discussing what you need to know to protect your 401(k). Is it time to rollover? This is a show you can't afford to miss!

Make sure to tune into my show tomorrow. We'll be talking about the things you need to know to prepare your estate plan. Kirk Bennett will be my special guest and we'll be taking your questions on wills and trusts, estate planning, retirement, and investing.

Also, this month I am giving my book Bulletproof Retirement away for free to my facebook fans. Plus, if you would like an autographed copy, call our office at 1-866-702-7823 for the details.

The Dow Jones Industrial Average closed today, losing 420 points. This drop was largely caused by continued fears and uncertainty in the markets that spurred investors to flee towards safer investments. This gut reaction from investors is not the smartest way to invest and is why we began making changes to our portfolios months ago. In other words, we’re well ahead of the curve.

The European debt crisis remains a concern in the global economy, however most U.S. banks have reduced their exposure to foreign banks to minimize their risk. In our own portfolios, exposure to foreign banks, through our mutual funds, is quite small.

Remember 75% of corporations are posting higher earnings and they are all holding more cash than ever before. This means whatever happens in the European debt crisis, our corporate structure is in pretty good shape to face whatever the future brings.  In addition, only a small portion of our portfolio is in stocks that would be adversely affected by a full blown European debt crisis.

For the short term, we expect the volatility to continue while the long term outlook is for sunnier skies. In the meantime, the protections we have in place are working; so far we are only down a small fraction when compared to what the market is down.

I will continue to keep you up to speed as things unfold with important news and updates.

    The Dow Jones Industrial Average dropped 520 points today, outpacing yesterday’s gain of 430 points. We expect this volatile trend of sharp gains and losses to continue for the short term. Nevertheless, the broad asset class diversification of our portfolios should allow our positions to ride out these ebbs and flows and take advantage of the situation, good or bad.

    European debt concerns remain high and continue to hamper much of the recovery. Banks with exposure to the debt of Portugal, Ireland, Italy, Greece and Spain, or financial institutions based in those countries seem particularly risky for investors right now.

    In order to further reduce the risk to foreign debt exposure, we are effecting a change to replace the current money market fund used to hold cash balances in all Sterne, Agee & Leach accounts with the Federated Government Cash Series money market fund.

    This new fund does not hold anything outside of the U.S. and only invests in short-term U.S. Treasury and government agency securities. We believe this conservative move will be a little safer and keep us from getting tangled up in the European debt mess.

    The Dow Jones Industrial Average dropped another 630 points today amid the hype surrounding the recent downgraded rating for the U.S. from AAA to AA. It is my opinion and that of most other analysts that the rating change is essentially meaningless and today’s decline in the markets were more of a reaction to concerns in Europe and other major world markets.
    The European crisis remains a significant concern for many investors because of fears they may be heading closer to recession. 25% of our exports are sent to European countries and as much as 50% of the income of many of our largest corporations comes from Europe.
     We found some interesting statistics since the 1960’s to help put this recent activity into perspective:

Bear Market Facts:
Number of Bear Markets Since 1960... 16
Average Frequency... 1 every 3 yrs
Last Ended... March 2009   
Average Duration... 11 Months   
Average Market Decline... -27.6%

 

Stock markets around the world were down due to the deepening debt crisis in Europe. Here in the U.S., investors were further panicked by fears of unemployment benefit extensions running out at the end of this year.  

The precipitous drop in the stock market today, caused by these and other worldwide problems, led to the Dow Jones Industrial Average dropping over 500 points today. While there is no question that if the market goes down as much as it did today in the future, that our investments will go down some too, we feel that we will fare much better than the markets because of the massive changes to our portfolios earlier this year to make them more conservative. Overall, the Dow Industrial average is down 10.4% and the S&P Index was down 10.9% since July 21st, 2011 while our Moderate Growth & Income Portfolio and the Moderate Growth Portfolio were down substantially less.

We are as prepared as we can be to ride out this tough period in the market that may be ahead.  We think that over the long-term, the economy will strengthen as our government balances the nation’s budget. This possibility seems more likely as Congress evolves and more conservative efforts are made to reign in wasteful spending.

The investments we have in our portfolios now are in place to take advantage of the benefits of a declining market and create safety in this volatile market. We have hired the right people to do that for us in the mutual fund managers we have selected. I’m confident in the investments we have in place.