Actionable Thinking

GoodAfternoon! After29weeksoftradingthisyear,theS&P500hashad29dayswherethestockindexhasproducedadailygainorloss ofatleast1%(totalreturn).ThelatestcamejustlastFriday(7/20/12)whentheS&P500dropped1.0%fortheday followingtheearlymorningnewsofthetragicshootingatamovietheatreintheDenverarea.Thestockindexbegins todayat1363,upfrom1258atthebeginningoftheyearbutdownfromits1419closingcalendaryearhighsetinearly April.TheS&P500s+9.7%YTDtotalreturnperformancewouldrateasoneoftheinvestmentsurprisesthisyeargiven thebackgroundnoisethatseeminglyhassurroundedeachweek(source:BTNResearch). FedChairmanBenBernankescommentsbeforeseparateHouseandSenatecommitteeslastweekfocusedonthe loomingfiscalcliff(highertaxesandlowergovernmentspending)confrontingtheUSA,urgingCongressonceagainto takeimmediateactiontoaidournationsslowgrowtheconomy.SenatorChuckSchumer(Dem.,NY)pushedbackwith abluntassessmentofmoodinWashingtontoday."Giventhepoliticalrealities,particularlyinthiselectionyear,I'm afraidtheFedistheonlygameintown,"Schumersaid(source:Congress). ThefirstlookatthegrowthinthesizeoftheUSeconomyduringthe2ndquarter2012willbereleasedthisFriday (7/27/12).GDPgrowthwas+1.9%duringthe1stquarterthisyear(i.e.,quarteroverquartergrowthexpressedasan annualizedresult).Thatnumbercomparesunfavorablytotheaveragegrowthrateof+3.0%fortheeconomyoverthe last50years,i.e.,200quarters(source:CommerceDepartment). NotableNumbersfortheWeek:
1. HALF AS MUCH - The S&P 500 stock index was up +5.3% per year (total return) for the 10-years ending 6/30/12. A decade ago, the S&P 500 stock index was up +11.4% per year (total return) for the 10-years ending 6/30/02. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research). 2. BIG BANKS - The 19 largest banks in the United States (there are 7,307 banks nationwide) hold 60% of the $13.93 trillion of assets controlled by all domestic commercial banks and savings institutions as of 3/31/12. Each of the 19 banks has at least $100 billion of assets (source: Federal Deposit Insurance Corporation). 3. HOW THEY SPEND THEIR MONEY - 22% of the spending of the average US state is for Medicaid expenditures (source: National Association of State Budget Officers). 4. NOT JUST FOR KIDS - 68% of the outstanding student loans nationwide are held by Americans at least age 30 (source: Federal Reserve Bank of New York).
SecuritiesofferedthroughNFPSecuritiesInc.MemberFINRA/SIPC.NFPSecuritiesisnotaffiliatedwithU.S.FinancialServices,LLC. Thismaterialrepresentsanassessmentofthemarketandeconomicenvironmentataspecificpointintimeandisnotintendedtobeaforecastoffutureevents,ora guaranteeoffutureresults.Forwardlookingstatementsaresubjecttocertainrisksanduncertainties.Actualresults,performance,orachievementsmaydiffer materiallyfromthoseexpressedorimplied.Informationisbasedondatagatheredfromwhatwebelievearereliablesources.ItisnotguaranteedbyNFPSecurities, Inc.astoaccuracy,doesnotpurporttobecompleteandisnotintendedtobeusedasaprimarybasisforinvestmentdecisions.Itshouldalsonotbeconstruedas advicemeetingtheparticularinvestmentneedsofanyinvestor.Theindicesmentionedareunmanagedandcannotbedirectlyinvestedinto.Pastperformancedoes notguaranteefutureresults.TheS&P500isanunmanagedindexof500widelyheldstocksthatisgenerallyconsideredrepresentativeoftheUSstockmarket. Copyright2012MichaelA.Higley.Allrightsreserved. Ifyoudonotwanttoreceivefurthereditionsofthisweeklynewsletter,pleasecontactmeat9738823600oremailmeattheaddressindicatedbelow.