Financial Concierge

CHANGES IN THE EU BRING ANXIETY TO WALL STREET. Will stocks face further headwinds, or sail strongly ahead?

Provided by Kevin Nast In: European Crisis|Wall Street

18 May 2012

Eurozone debt issues aren’t going away – in fact, it may be several years before the crisis ebbs. Here in May, we have a new development: leaders in Greece and France have been voted out of office, with the risk of jeopardizing the agreed-upon Greek bailout, the close alliance between Eurozone economic powerhouses France and Germany, and in the worst-case scenario, possibly even the European Union itself.

U.S. stocks retreated from May 7-11, perhaps in part because of the news from the Eurozone. The concern may be whether we are going to have a replay of 2011 – a new round of EU squabbling that will increase Wall Street volatility.

Some analysts think U.S. stocks can ride through these anxieties without much damage. Others wonder how “decoupled” we are from the crisis.

What’s going on in Greece? On May 6, Greece had a national election in which no majority party emerged. From May 7-11, three attempts were made to form a unity government; they all failed. Hopefully – by the time you read this – current Greek president Karolos Papoulias will have negotiated his way to a coalition. Or, the nation’s next president could turn out to be Alexis Tsipras, leader of the radical-left Syriza party that gained ground in the with voters on its pledge to fight the austerity cuts that the Greek government agreed to as part of the latest EU/IMF bailout. If no coalition emerges in the Greek parliament, there could be another national election in June.^1,2

Greece made a deal with its bondholders months ago: they accepted write-downs on the bonds they held with the promise that those bonds would be swapped for new ones. If Greece backs out of this deal, who knows what happens. Some analysts think the hit would be primarily taken by Italy, Portgual and Spain – investors would probably call for higher interest rates on government bonds from these nations, which would push them further into debt. If investors pull their money out of the Spanish and Italian bond markets, Spain and Italy might end up needing bailouts.³

In the most severe scenario, Greece rejects the agreed-upon bailout deal and the euro along with it. That could lead to huge problems. A single rejection of the euro from an EU member might signal a deeply flawed currency. A perception of a failing euro would hurt the currency and the value of European equities and European bank debt; euro-denominated bonds would find fewer investors. So the global currency swap market could be damaged, with a multi-continent recession a possible consequence. Hopefully, things don’t go this far.³

What’s going on in France? President Nicolas Sarkozy lost a national election to Francois Hollande, a socialist who is widely considered a moderate. Hollande wants to see an economic stimulus for France even with the austerity measures coming, and he has indicated that he will propose the same thing for Germany when he meets with German chancellor Angela Merkel.³

Of course, Merkel and Sarkozy formed a united front these last couple of years – affirming their faith in the euro, helping to broker the Greek bailouts. Hollande and Merkel would seem to have immediate philosophical differences about fixing the EU economy, and any difference of philosophy between the leaders of the EU’s two most powerful economies doesn’t bode well for unity.

Defending the euro may be their most important task. It would be unimaginable to have one of the globe’s reserve currencies fall apart. If currency traders see a departing euro, then conditions would be right for another global credit crunch.

What does this mean for Wall Street? If the data stream from our recovering economy can drag Wall Street’s attention away from Europe – and if the EU and IMF leaders successfully hurdle this latest obstacle – then the impact on U.S. equities might be short-term.

Economists have warned of a fragmented Eurozone before, yet it has held together despite remarkable stress. Common ground was painful to reach, yet a feasible Greek bailout plan emerged from it. Now that common ground must be regained.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. in Northville, MI 48167. He may be reached at www.Map2Finance.com or 248.347.1888. Kevin services clients in Novi, MI 48374 and the surrounding metro area as well as 10 additional states across the US.

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Citations.

1 – www.nytimes.com [5/12/12]

2 – www.npr.org [5/11/12]

3 – www.sacbee.com [5/11/12]

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Tags: Financial Advisor, Financial Advisors, Northville MI 48167, Novi MI 48374

WHY DON’T YOU HAVE DISABILITY INCOME INSURANCE? If you are injured or ill, it could help you keep afloat financially.

Provided by Kevin Nast In: Disability Insurance|Financial Planning

16 May 2012

If you can’t work and pay your bills, how are you going to cope? Let’s say an injury or illness prevents you from doing your job. How do you deal with the lost income?

Disability income insurance provides an answer. Few of us opt for such coverage, even though it may help us maintain our income (and quality of life) in a crisis.

A case in point: the non-profit Consumer Federation of America just polled 1,200 private-sector U.S. workers and found that two-thirds of them had no such coverage.¹

Mention that to most employees, and they may just shrug. Who cares, who wants to buy more insurance, especially coverage you don’t think you’ll need?

The skepticism is understandable, because we never believe we will be disabled. We don’t dare think about it. Additionally, few of us comprehend the varieties of “disability” that we could end up experiencing.

The non-profit Council of Disability Awareness notes that 90% of disability claims in the U.S. are unrelated to workplace injury. Rather, they are filed for acute or chronic illnesses or health conditions. Musculoskeletal disorders (such as arthritis, spine and joint disorders, fibromytis and back pain) represent the largest percentage of disability claims, more than any other condition.^1,2

Do you think you don’t need disability coverage? Think again. It may shock you how little of your wages you can replace. You can only get workers compensation if your injury or illness is job-related – but less than 5% of disabling illnesses or injuries are. Social Security disability benefits typically provide about $1,100 per month – not exactly the income you want. Additionally, it might take a year or more for you to get your first check. In 2009 (the midst of the Great Recession), the SSA denied 65% of initial SSDI claim applications.^1,3,4

This is why disability income insurance can be so useful. Some of these policies allow payments to start just a week after an employee stops working, and many of them will provide coverage in the neighborhood of 60% of a worker’s salary.¹

What are your chances of becoming disabled during your working years? As a 2011 Social Security Administration Fact Sheet notes, just over 25% of today’s 20-year-olds are projected to become disabled before they retire. More than 5% of U.S. wage earners – 8.3 million people – were getting SSDI in 2011.⁴

The Society of Actuaries finds that once someone is disabled for 90 days, the average length of disability is two years. The CDA reports that the average long-term disability claim has a duration of 31.2 months.^1,4

If your income drops, your stress level could soar. Do you know someone who has had to quit their job or walk away from their profession due to a disability? Then you’ve seen the financial stress that can result.

Even if you don’t know someone facing such financial pressure, you have probably read stories that touched your heart, stories of economic hardship that can be traced back to a disability. A hard-working man or woman loses a home to foreclosure; a couple separates or divorces under economically trying circumstances; a single parent with children has to accept charity from a food bank or becomes homeless. In too many of these stories, a sudden disability is an underlying cause.

If you die, your income stops and so do your expenses. If you are disabled and can’t work, your income stops … but your expenses keep piling up. In fact, with the cost of medical treatment, your expenses may balloon.

It’s time to start thinking about disability insurance. We’d all like to believe that we’ll never be disabled. But the reality is … it could happen to you. If it does, how will your family manage? Are you prepared?

May is Disability Income Insurance Awareness Month – a good time to make people aware of this coverage. If your employer doesn’t offer or provide you with disability income insurance, take some time to look at some of the options available. You don’t always know what the future holds; if you become disabled, this insurance may give you added economic stability.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. in Northville, MI 48167. He may be reached at www.Map2Finance.com or 248.347.1888.

Non-securities products and services are not offered through Transamerica Financial Advisors, Inc. (TFA).

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Citations.

1 – bucks.blogs.nytimes.com [5/1/12]

2 – www.disabilitycanhappen.org [5/2/12]

3 – www.nytimes.com [2/6/10]

4 – www.disabilitycanhappen.org [5/2/12]

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Tags: Disability Insurance, Fee-based Advisor, Financial Planner, Financial Planners, Northville Michigan 48167

Kevin M. Nast Presents: WEEKLY ECONOMIC UPDATE

Provided by Kevin Nast In: Stock Market|Weekly Economic Update

14 May 2012

WEEKLY QUOTE

“He who is not courageous enough to take risks will accomplish nothing in life.”
- Muhammad Ali

WEEKLY TIP

If you and your partner aren’t married, it might be prudent to create a domestic partnership agreement that states how expenses are shared, how assets are owned, and how those assets should be distributed in the event of your death(s) or the dissolution of the relationship.

WEEKLY RIDDLE

We know that a seahorse isn’t a horse, and we know that a silverfish isn’t a fish. For that matter, a snakehead isn’t a snake – but what is it?

Last week’s riddle:

About 90% of this country’s land area is made up of arid tan desert, yet its flag is solid green – in fact, at present it is the only nation in the world with a flag containing just one color. What nation is this?

Last week’s answer:

Libya.

May 14, 2012

CONSUMER SENTIMENT HITS A 4-YEAR PEAK

May’s initial Thomson Reuters/University of Michigan consumer sentiment survey came in with an index reading of 77.8, the highest mark since January 2008. The current economic conditions sub-index rose to 87.3 from last month’s final 82.9 reading. Descending oil and gas prices may have been factors promoting some optimism.¹

BIGGEST DROP IN PPI In 6 MONTHS
Falling energy prices influenced this development as well. Producer prices retreated 0.2% in April according to the Labor Department. Economists surveyed by Reuters had forecast no change. The bulk of the retreat was attributed to the 1.4% April drop in energy costs. The PPI has only risen 1.9% in the last 12 months, the smallest annualized wholesale price inflation recorded since October 2009.^2,3

GOLD & OIL PRICES RETREAT

After anxieties emerged last week about a China slowdown, the broad commodities market took a hit. So at Friday’s close, gold had fallen 3.72% across five trading days to $1,584.00 per ounce while crude futures had slipped 2.40% to $96.13 a barrel. As of Friday evening, gold was +1.10% YTD and oil was -2.73% YTD.²

NEW DOUBTS IN THE EU AFFECT STOCKS

Eurozone elections brought new worries about whether Greece would abide by austerity cuts and stick with the euro. Efforts to form a coalition government in Greece stalled last week, and French president Nicolas Sarkozy was defeated in his reelection bid by socialist candidate Francois Hollande. Factor in the usual spring thoughts about whether stocks are ready to pull back, and the weekly losses were as follows: S&P 500, -1.15% to 1,353.39; DJIA, -1.67% to 12,820.60; NASDAQ, -0.76% to 2,933.82.^2,4,8

THIS WEEK: Facebook’s IPO is scheduled for Friday, and there are plenty of other news items on tap. On Monday, Groupon comes out with Q1 results. Tuesday, the April CPI appears plus data on April retail sales and earnings from JCPenney, TJX, Dick’s Sporting Goods, Saks and Home Depot. Wednesday brings data on April housing starts and industrial output, the April 25 FOMC minutes, and Q1 results from Deere, Abercrombie & Fitch, Target, Staples and Limited Brands. The Conference Board’s April consumer confidence index and new initial claims figures are out Thursday, joined by Q1 earnings from Wal-Mart, Dollar Tree, Ross Stores, Gap, Aeropostale and Sears. As Facebook starts trading on Friday, a G8 summit also starts at Camp David; Q1 results also arrive from Ann, Inc. (formerly Ann Taylor).

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+4.94	+1.51	-0.76	+2.90
NASDAQ	+12.62	+3.12	+2.90	+8.33
S&P 500	+7.62	+0.84	-2.02	+2.83
REAL YIELD	5/11 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.28%	0.76%	2.30%	3.48%

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 5/11/12^2,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. in Northville, MI 48167. He may be reached at www.Map2Finance.com or 248.347.1888.

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Citations.

1 – www.marketwatch.com [5/11/12]

2 – money.msn.com [5/11/12]

3 – www.nytimes.com [5/12/12]

4 – montoyaregistry.com [5/11/12]

5 – bigcharts.marketwatch.com [5/11/12]

6 – treasury.gov [5/11/12]

7 – treasurydirect.gov [1/9/02]

8 – www.sacbee.com [5/11/12]

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Tags: Northville MI 48167, Wealth Management, Wealth Manager, Wealth Managers

SELL IN MAY … GO AWAY? Does the old stock market cliché have any credibility in 2012?

Provided by Kevin Nast In: Stock Market

9 May 2012

An old stock market dictum says that spring is for profit-taking, or at least a time to reduce your exposure to equities.

In the classic market psychology, you “sell in May and go away” with the belief that stock prices will plateau or retreat in spring and summer, and then you return to stocks in the fall, taking advantage of bargains and factors that will encourage a hot fourth quarter.

In the last several years, we have seen all kinds of stock market behavior, some of it extraordinary. So is there any credence to this approach now?

The argument for “going away”. Over the last 12 months, investors who held to this belief made out pretty well. From May 1-November 1, 2011, the Dow lost 6.7%. From November 2011 through April 27, 2012, it gained 10.7%.^1,2

If we open a historical window – specifically, The Stock Trader’s Almanac – back to 1926, we see the S&P 500 rising 4.3% on average during May-October and gaining an average of 7.1% from November-April.³

Unsurprisingly, STA editor-in-chief Jeff Hirsch is an advocate of the “sell in May” approach. So is Sam Stovall, who is of course the chief equity strategist at S&P Capital IQ. As Stovall just noted to Forbes, since 1945 the S&P 500 has gained just 1.2% during the average May-October run yet advanced 6.9% during the average November-April period.^1,3

While these numbers are pretty compelling, you know what they say about statistics.

Is the argument principally flawed? If you do sell in May, where do you put your money after dumping those stocks? The strategy assumes you know of a better place – an alternative to equities offering greater yield and less risk.

Larry Swedroe, director of research for Buckingham Asset Management, recently told CBS MoneyWatch that the “sell in May” approach amounted to “pure randomness”. He made his claim by running numbers in calendar years from 1950-2007 with the hypothesis of reinvesting money pulled out of equities into 30-year Treasuries during the assumed 6-month market lull. According to his research, the “buy and hold” crowd would have outperformed the “sell in May” crowd in the time frames 1950-2007, 1980-2007 and 1990-2007, with the “sell in May” adherents triumphing in the time frames of 1960-2007, 1970-2007 and 2000-2007.^3,4

The case for staying in the market. Even if the performance numbers mentioned in the fourth, fifth and sixth paragraphs of this article were absolutely predictable annually, what would the compelling argument be for ditching stocks? Gains would still occur in spring and summer; they would just be lesser gains.

Let’s go from hypothesis to reality, specifically what is occurring right now. An investor wanting a divorce from risk for the next six months could decide to bail from stocks and put the assets into short-term Treasuries and money market accounts. Would it be worth it? Maybe not. According to Bankrate.com, 6-month Treasuries were yielding 0.14% as of April 27 and money market accounts were yielding 0.46%. Throw in brokerage charges and taxes you might incur from selling, and getting in and out of equities may look less attractive.¹

Once you’re out, when do you get back in? What if mid-October brings a rally? Do you jump in and buy? What if the bears show up at the start of November? How long do you wait for what might be the market low?

Moreover … who’s to say that U.S. economic indicators (or even global ones) might be better than expected this summer? What if the EU arranges a manageable fix for Spain’s debt dilemma? What if the real estate market shows signs of heating up in the coming quarters? What if the Fed opts for more easing?

If the “sell in May” strategy sounds more like market timing to you than anything else, it does have some history supporting it – history worth considering. The fact remains, however, that history is no barometer of future stock market performance.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. in Northville, MI 48167. He may be reached at www.Map2Finance.com or 248.347.1888.

The Standards & Poor’s 500 (S&P 500) is an unmanaged index of 500 common stocks traded on the New York Stock Exchange that is widely used as an indicator of market trends. The Dow Jones Industrial Average is an unmanaged index of common stock that tracks changes in stock prices of the 30 most significant and commonly traded U.S. Industrial stocks of the New York Stock Exchange. Past performance is no guarantee of future results. The market value of securities will fluctuate and may incur a profit or loss. The index returns listed do not include transaction costs or tax considerations. The performance of these indexes does not reflect any fees and charges associated with investing. It is not possible to invest directly in an Index.

LD43609-05/12

Citations.

1 – www.forbes.com [4/27/12]

2 – money.cnn.com [4/27/12]

3 – www.cbsnews.com [4/27/12]

4 – montoyaregistry.com [4/27/12]

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Tags: Fee-Based, Financial Advisor, Financial Advisors, Market Timing, Wealth Managers

Kevin M. Nast Presents: WEEKLY ECONOMIC UPDATE

Provided by Kevin Nast In: Stock Market|Weekly Economic Update

7 May 2012

WEEKLY QUOTE

“It’s kind of fun to do the impossible.”
- Walt Disney

WEEKLY TIP

If you are a single parent, a will, a power of attorney and disability income insurance are crucial to have – after all, you are the sole provider.

WEEKLY RIDDLE

Last week’s riddle:

Four grown men decided to play on the sidewalk for three hours. No one chided them for childish or immature behavior; many appreciated the noise they made in unison. They even went home a bit richer. What were these men doing?

Last week’s answer:

They were street musicians performing for passerby.

May 7, 2012

UNEMPLOYMENT DOWN TO 8.1%

The jobless rate dipped 0.1% in April, but Wall Street didn’t exactly cheer about it as just 115,000 non-farm jobs were added to the economy. Economists polled by Briefing.com thought payrolls would expand by 162,000. The Dow fell 168 points Friday on the news. On the bright side, job gains across February and March were revised upward by 53,000. Payrolls grew by a cumulative total of 635,000 positions in Q1 2012, making it the best quarter for hiring since Q1 2006.^1,2,3

CONSUMER SPENDING UP 0.3%
Analysts termed March’s gain disappointing after the (upwardly revised) 0.9% advance in February. Economists surveyed by Bloomberg News anticipated a 0.4% improvement. Consumer incomes rose 0.4% in March, the best month in that category since December; consumer wages were up 0.3%.³

U.S. MANUFACTURING INDEX LEAPS NORTH

The Institute for Supply Management’s April manufacturing PMI rose 1.4% in April to 54.8, representing the best monthly gain since June. Now for the bad news: the ISM non-manufacturing index showed a 2.5% drop in the same month to 53.5.^2,4

AVERAGE RATE ON 30-YEAR FRM: 3.84%

That is a new all-time low recorded by Freddie Mac in its May 3 Primary Mortgage Market Survey. A year prior, interest rates on 30-year conventional home loans averaged 4.71%. Rates on the refinancer’s favorite tool – the 15-year FRM – have dropped from 3.89% to just 3.07% in the same time frame.⁵

STOCKS DECLINE

The job report drained enthusiasm from the market Friday, and stocks retreated for the week. The five-day performances: S&P 500, -2.44% to 1,369.10; DJIA, -1.44% to 13,028.27; NASDAQ, -3.68% to 2,956.34. Also notable: oil’s dive back under $100. At Friday’s NYMEX close, crude futures settled at $98.49, down 6.14% in a week.^1,6

THIS WEEK: Monday offers Q1 results from Electronic Arts and Tyson Foods. Tuesday, DirecTV, Wendy’s, Disney and HSBC issue earnings reports. Wednesday brings earnings announcements from Priceline.com, NewsCorp, Toyota, AOL, Dean Foods, Macy’s, Activision Blizzard and Cisco. Thursday, new initial claims figures appear along with Q1 results from Kohl’s, Nordstrom and Sony; Fed chairman Ben Bernanke speaks at the annual Conference on Bank Structure and Competition in Chicago. Friday brings the April PPI and May’s initial University of Michigan consumer sentiment survey, and earnings arrive from Nissan and Nvidia.

CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+6.72	+2.39	-0.36	+3.02
NASDAQ	+13.48	+4.53	+2.99	+8.33
S&P 500	+8.87	+1.62	-1.81	+2.75
REAL YIELD	5/4 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.30%	0.70%	2.24%	3.48%

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 5/4/12^1,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. in Northville, MI 48167. He may be reached at www.Map2Finance.com or 248.347.1888.

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Citations.

1 – money.msn.com [5/4/12]

2 – briefing.com [5/4/12]

3 – www.sfgate.com [4/30/12]

4 – www.ism.ws [5/1/12]

5 – www.cbsnews.com [5/4/12]

6 – montoyaregistry.com [5/4/12]

7 – bigcharts.marketwatch.com [5/4/12]

8 – treasury.gov [5/4/12]

9 – treasurydirect.gov [1/9/02]

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Tags: Investment Advisor, Investment Advisors, Managed Accounts, Northville MI 48167

Kevin M. Nast Presents: MONTHLY ECONOMIC UPDATE

Provided by Kevin Nast In: Monthly Economic Update

5 May 2012

MONTHLY QUOTE

“You make a living by what you get. You make a life by what you give.”
– Winston Churchill

MONTHLY TIP

Think about sending your son or daughter to a college that is both good and affordable. If your kids are debt-free when they graduate, they may end up starting their working lives in a better financial position than many of their peers.

MONTHLY RIDDLE

A man tells a friend that he married three women yesterday, and it was all legal. In fact, it was routine. How can he make such a statement?

Last month’s riddle:
What has three feet yet cannot run or walk?

Last month’s answer:

A yardstick

May 2012

THE MONTH IN BRIEF
The Dow gained 0.01% in April – a month in which the impressive bull run of the first quarter moderated and more pessimism crept onto Wall Street. Some domestic indicators were tepid – but others did provide nice surprises. Signals out of Europe flashed hints (or confirmations) of recession. Some key overseas indices suffered notable April losses. Our Q1 GDP was unimpressive, but U.S. consumer spending improved for March. Oil futures rose while gasoline and crop futures retreated. Analysts wondered (again) if the real estate market had at last bottomed out.¹

DOMESTIC ECONOMIC HEALTH
Consumer spending advanced 0.3% in March, with wages rising 0.4%. The wage increase doubled the gain forecast by a consensus of economists polled by Briefing.com; that was the good news. The bad news: those analysts expected a personal spending gain of 0.5% in light of the (revised) 0.9% advance in February. Consumer sentiment was holding up reasonably well even with soaring fuel prices. From March to April, the Conference Board’s poll wavered from 69.5 to 69.2; the University of Michigan’s consumer sentiment survey went from a final March reading of 75.7 to a final April mark of 76.4.^2,3

The initial estimate of Q1 GDP arrived in late April, and it underwhelmed the bulk of economists and Wall Street analysts, who were hoping for something more in line with the 3.0% growth of the preceding quarter. The economy’s 2.2% Q1 growth was by no means horrible; investors just hoped to further justify the winter rally. What kind of inflation was America experiencing? The Consumer Price Index rose 0.3 in March following gains of 0.4% in February and 0.2% in January. Annualized consumer inflation was at 2.7% in March, down from 2.9% in February. The Producer Price Index was flat in March, although core PPI advanced 0.3%.^3,4,5

One big positive that surprised nearly everybody emerged. According to the Institute for Supply Management, April 2012 was the hottest month for U.S. manufacturing since June 2011. ISM’s manufacturing PMI jumped 1.4% for April to 54.8. Weeks earlier, ISM’s service sector PMI had read 56.0 for March, down 1.3% from the February mark. Something else that declined in March: durable goods orders. They fell 4.2%, with core hard goods orders down 1.1%. March retail sales rose by 0.8%, far surpassing the 0.3% gain projected by economists surveyed by Bloomberg.^3,6,7,8

April also saw solid corporate earnings. The buzz was that this earnings season would disappoint, but as Bloomberg noted, 74% of S&P 500 firms reporting results between April 10 and May 1 beat forecasts. At the start of May, the S&P 500 was trading at 14.3x reported earnings, notably below the average of 16.4 recorded since 1954. The takeaway: stocks were still pretty cheap.⁹

The jobless rate ticked down to 8.2% in March. The economy added merely 120,000 jobs during that month, but that brought the net gain in hiring since December to 635,000. While the Federal Reserve indicated it would hold off on further quantitative easing measures, it did state its commitment to keeping the federal funds rate at the current lows through the end of 2014.^8,10

GLOBAL ECONOMIC HEALTH
Was Spain the next Greece? Global investors hoped not, given its comparative magnitude and influence on the European and global economies. April ended with Standard & Poor’s downgrading Spain’s debt from A to BBB with a negative outlook. Spain’s jobless rate had hit 24.4% in the first quarter. Beyond Spain, the EU jobless rate was 10.9% in March with inflation at 2.6% in April. The key Markit purchasing manager index for the EU dipped down to 45.9 last month, marking the ninth straight month of sector contraction. Word also arrived that Great Britain had slipped back into a recession in the first quarter; its last downturn had ended at the start of 2010. In April, a total of 12 European economies were in recession; besides the U.K., the list also included Spain, Italy, Ireland and the Netherlands.^10,11,12,13

The Asia-Pacific region offered a different story. China’s official PMI hit 53.3 for April, a 13-month peak. The HSBC China PMI (which tracks mostly private firms) also rose 1.0% to 49.3. Other key PMIs in April: India, 54.9; Indonesia, 50.5; South Korea, 51.9; Taiwan, 51.2; Australia, 43.9. In other news, exports fell in India for the first time since 2009 in April and the Bank of Japan announced a stimulus.^12,14,15

WORLD MARKETS
Looking at Morningstar data measured in U.S. dollar terms, we see a mixed month. The Hang Seng (+2.50%), Shanghai Composite (+5.90%) and S&P/ASX All Ordinaries (+ 1.07%) fared better than the FTSE 100 (-0.53%), the CAC 40 (-6.16%), the Nikkei 225 (-5.58%), the TSX Composite (-2.19%), the DAX (-4.05%) and the Sensex (-0.71%). The MSCI World Index (-1.37%) and MSCI Emerging Markets Index (-1.48%) both posted April losses.^16,17

COMMODITIES MARKETS

Gold’s allure dimmed just a bit in April. At the close on April 30, the COMEX price was $1,664.20 an ounce (-0.46% on the month). Silver lost 4.52% in April, but copper managed a monthly gain of 0.12%. Oil futures rose 1.80% for the month on the NYMEX to $104.87 per barrel. Heating oil went +0.44% for the month while natural gas went +7.48%. Gasoline futures pulled back: RBOB gasoline lost -5.55% in April. Retail gas prices fell 2.72% as well. It was also a poor month for crop futures, with wheat going -0.95%, corn -1.51%, coffee -2.95% and cotton -4.81%.¹³

REAL ESTATE
According to the National Association of Realtors, pending home sales rose 4.1% in March. Economists polled by Briefing.com expected a 1.0% gain. That was a bright spot, and others could be found in data that for the short term was mostly negative. The February S&P/Case-Shiller Home Price Index showed that overall prices actually rose 0.2% – the first advance since the April 2011 edition. (Zillow reported that the median U.S. home value rose 0.5% in March, the best monthly gain since 2006.) As for new and existing home sales, both retreated: the Census Bureau said that the pace of new home sales fell 7.1% in March and NAR noted a 2.6% slip in residential resales. The bright side in existing home sales: NAR also said the median price had risen 2.5% in the past 12 months.^18,19,20

Looking at Freddie Mac’s March 29 and April 26 Primary Mortgage Market Surveys, average interest rates on home loans moved lower as follows: 30-year FRMs, 3.99% to 3.88%; 15-year FRMs, 3.23% to 3.12%; 5/1-year ARMs, 2.90% to 2.85%; 1-year ARMs, 2.78% to 2.74%.²¹

LOOKING BACK…LOOKING FORWARD
NASDAQ and S&P 500 winning streaks ended in April, but the Dow’s winning streak extended to seven months. At the close on April 30, the Dow was at 13,213.63, the S&P 500 at 1,397.91 and the NASDAQ at 3,046.36.^1,13,22

% CHANGE	Y-T-D	1-MO CHG	1-YR CHG	10-YR AVG
DJIA	+8.15	+0.01	+3.15	+3.46
NASDAQ	+16.94	-1.46	+6.01	+8.39
S&P 500	+11.16	+0.75	+2.52	+3.12
REAL YIELD	4/30 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.30%	0.75%	2.20%	3.48%

Sources: usatoday.com, thestockmarketwatch.com, bigcharts.com, treasury.gov – 4/30/12^{1,22,23,24,25,26}

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Will May be a decent month for stocks? Looking past the old warning to “sell in May and go away”, we see that the fifth month of the year has been a pretty good month in recent market history. The S&P 500 logged a May gain 71% of the time from 1988-2011; the average monthly gain was 1.22%. The MSCI Emerging Markets index advanced in 58% of Mays in the same window of time, with the average May gain being 1.28%. Also, many U.S. economic indicators have really improved in the past 12 months. ISM surveys have manufacturing up 2% year-over year and nonfarm payrolls have expanded by 29% in that time frame. Our 2.2% Q1 growth is a big improvement over the 0.4% GDP advance of Q1 2011. Our housing sector seems poised for improvement, and maybe it is on the way back already – Credit Suisse analysts note that U.S. building permits are up 35% from a year ago, while housing starts and existing home sales are respectively 3% and 5% improved. Auto sales are at a four-year peak. So while spring and summer have historically brought stock market doldrums, it appears we have some compelling reasons to disregard history again, at least for this month.²⁷

UPCOMING ECONOMIC RELEASES: The schedule for the balance of May looks like this … the April jobs report (5/4), March wholesale inventories (5/9), the April PPI and the initial University of Michigan consumer sentiment survey for April (5/11), April’s CPI and retail sales plus March business inventories (5/15), April industrial output, housing starts and building permits and the minutes of the 4/25 Fed policy meeting (5/16), the April Conference Board Leading Economic Indicators index (5/17), April existing home sales (5/22), April new home sales (5/23), April durable goods orders (5/24), the final April University of Michigan consumer sentiment survey (5/25), the March Case-Shiller home price index and the Conference Board’s May consumer confidence poll (5/29), April pending home sales (5/30) and the second estimate of Q1 GDP (5/31). The April personal spending report won’t be released until June 1 – coincidentally, the same day as the May unemployment report and the May ISM services index.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. and may be reached at www.Map2Finance.com or 248.347.1888.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

LD43572-05/12

Citations.

1 – thestockmarketwatch.com [4/30/12]

2 – briefing.com [5/1/12]

3 – briefing.com [4/27/12]

4 – www.nytimes.com [4/13/12]

5 – www.cnbc.com/id/47027476 [4/12/12]

6 – www.ism.ws [5/1/12]

7 – www.ism.ws [4/4/12]

8 – www.bloomberg.com [4/16/12]

9 – www.bloomberg.com [5/1/12]

10 – https://www.mfs.com [4/27/12]

11 – epp.eurostat.ec.europa.eu [5/2/12]

12 – www.reuters.com [5/2/12]

13 – money.msn.com [4/30/12]

14 – blogs.ft.com [5/2/12]

15 – blogs.ft.com [5/1/12]

16 – news.morningstar.com [4/30/12]

17 – mscibarra.com [4/30/12]

18 – www.nydailynews.com [4/27/12]

19 – briefing.com [4/27/12]

20 – blogs.wsj.com [4/19/12]

21 – www.freddiemac.com/pmms/ [4/2/12]

22 – montoyaregistry.com [4/2/12]

23 – www.usatoday.com [4/30/12]

24 – bigcharts.marketwatch.com [4/30/12]

25 – treasury.gov/resource-center [5/2/12]

26 – treasurydirect.gov [1/9/02]

27 – www.marketoracle.co.uk [5/1/12]

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Kevin M. Nast Presents: WEEKLY ECONOMIC UPDATE

Provided by Kevin Nast In: Weekly Economic Update

1 May 2012

WEEKLY QUOTE

“Don’t ever take a fence down until you know why it was put up.”
- Robert Frost

WEEKLY TIP

A good will should propose at least a few executors, as there is always the possibility that your first choice for executor might not outlive you.

WEEKLY RIDDLE

Four grown men decided to play on the sidewalk for three hours. No one chided them for childish or immature behavior; many appreciated the noise they made. They even went home a bit richer. What were these men doing?

Last week’s riddle:

They have no bodies, but you could say they have tails and heads. What are they?

Last week’s answer:

Coins.

April 30, 2012

Q1 GDP: +2.2%

The federal government’s initial estimate disappointed many analysts, even with plenty of potential for upward revision later. After all, Q4 2011 had brought growth of 3.0%. Economists polled by Briefing.com expected the Q1 estimate to come in at +2.5%. Personal spending rose by 2.9% for the quarter, with car sales playing the largest role in the gain; subtract vehicle purchases, and the consumption increase was 1.1%, the smallest in four quarters.^1,2

KEY CONSUMER SENTIMENT SURVEY TOPS ESTIMATES
The final April Reuters/University of Michigan consumer sentiment survey came in at 76.4, 0.7% higher than the prior 75.7 reading. Economists polled by Briefing.com thought there would be no advance. March’s final survey had a 76.2 reading.^2,3

MORE HOME SALES CONTRACTS INKED IN MARCH

Pending home sales improved by 4.1% in March to reach their highest level since April 2010, according to a report from the National Association of Realtors. Another bit of good news was unexpected: February’s S&P/Case-Shiller Home Price Index showed prices rising 0.2% overall, the first advance recorded in ten months. Last week, Zillow said the median U.S. home value had increased 0.5% in March, the best monthly gain in six years. The sour note in last week’s real estate roundup was new home sales. The Census Bureau said they were down 7.1% in March. However, the median sale price was up 6.3% year-over-year.^4,5

NASDAQ HAS BEST WEEK IN NEARLY 3 MONTHS

The tech-heavy index rose 2.29% across April 23-27 to settle at 3,069.20 Friday. The Dow gained 1.53% across the same stretch to finish the week at 13,228.31, while the S&P 500 advanced 1.80% last week to 1,403.36 at Friday’s close. With one market day to go in April, only the Dow is in positive territory for the month.^3,6

THIS WEEK: March personal spending data arrives Monday, and so do Q1 results from NYSE Euronext, Shutterfly and Anadarko Petroleum. Tuesday, ISM’s April manufacturing PMI is out, plus data on April auto sales and earnings from BP, Pfizer, Motorola Mobility, Sirius XM Radio, Broadcom, Chesapeake Energy and CBS. Wednesday brings news on March factory orders and earnings from Marathon Oil, MasterCard, Comcast, Time Warner, UBS, Barrick Gold, CVS, DreamWorks, Green Mountain Coffee, Clorox, Sunoco, Transocean, Visa and Whole Foods. Thursday, we get ISM’s non-manufacturing PMI for April, new initial claims data, and results from General Motors, AIG, Kraft and LinkedIn. Friday, the April unemployment report is released and Berkshire Hathaway announces earnings.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+8.27	+4.23	+0.16	+3.35
NASDAQ	+17.81	+6.95	+4.00	+8.45
S&P 500	+11.59	+3.52	-1.21	+3.04
REAL YIELD	4/27 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.30%	0.81%	2.25%	3.48%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 4/27/12^3,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. and may be reached at www.Map2Finance.com or 248.347.1888.

LD43526-04/12

Citations.

1 – money.msn.com [4/27/12]

2 – briefing.com [4/27/12]

3 – www.cnbc.com [4/27/12]

4 – www.nydailynews.com [4/27/12]

5 – briefing.com [4/27/12]

6 – montoyaregistry.com [4/27/12]

7 – bigcharts.marketwatch.com [4/27/12]

8 – treasury.gov [4/27/12]

9 – treasurydirect.gov [1/9/02]

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ALTERNATIVE INVESTMENTS, AT A GLANCE. What are they? How do they differ from “traditional” investments?

Provided by Kevin Nast In: Investment Strategy

27 Apr 2012

If you’re seeking a different investment path and have a large amount of money to invest, you may already be considering an alternative investment. Alternative investments sidestep the traditional investment paradigm, such as real estate, cash, stocks, and bonds; they seek a greater return from a more complex (and, it must be said, riskier) set of circumstances. Here is a brief overview of some investment options within a vast and complex financial arena.

Hedge funds, private equity funds and venture capital funds. These distant cousins of mutual funds are not for the average investor and offer the possibility of superb returns at considerable risk. Generally speaking, it takes a lot of money to get into one of these funds and they are not for the skittish. ^1,2

Oil and natural gas programs. Direct participation oil and gas investments can produce great returns, or miserable ones – depending on the temperament of the energy markets. Oil and gas investment programs often have high minimums, and navigating these programs can require a veteran eye.

Timber investing. Timber REITs (real estate investment trusts) allow the small investor to participate in this asset class. Timber has historically had very low correlation with the stock, bond, and commercial real estate markets and inflation.^3,4

REITs. Real estate investment trusts (which can be private or publicly traded) allow the small investor a way to participate in the commercial real estate sector without the burden of property management. REITs must pay out about 90% of their annual income, so they are encouraged to pay high dividends to unitholders. The drawback is that the IRS regards that annual dividend as taxable income.^5,6

Options and LEAPS. Options contracts give the holder an option to buy (a call) or sell (a put) a specific amount of a stock, ETF, currency, debt instrument or commodity at a specific price within a specific period of time. High net worth investors consider option contracts because of the potential income from covered calls, the possibility of locking in some profits as a consequence of buying puts, the chance to hedge by selling covered calls and buying puts simultaneously, and the opportunity for added portfolio diversification. Long Term Equity Anticipation Securities (LEAPS) are long-term options contracts (commonly 2-year options).

Futures and E-mini futures contracts. Retail futures traders try to speculate on price movements of all manner of commodities and even gauges of volatility. A small investment of thousands of dollars may allow an investor to control a futures contract worth many times more, so the leverage is really significant. But losses can be significant as well. E-mini futures are smaller versions of larger futures contracts. They generally have a lower minimum than standard futures contracts, but are also potentially subject to the well-publicized shocks of electronic trading rather than the action in the old-school trading pit.

Managed futures. Investing in managed futures means selecting a rigorously regulated professional money manager – a commodity trading advisor, or (CTA) – that invests in commodity, currency and even equity index futures on your behalf. Most CTAs do this through proprietary trading systems. It generally takes $50,000 or more (sometimes much more) to invest in a managed futures account. As this is commodities trading, substantial and sudden losses may occur, as well as substantial and sudden gains.⁷

Real-return securities. Also known as inflation-indexed securities, these are typically notes or bonds with coupon payments linked to inflation rates. The issuer guarantees that the security’s return will outperform inflation if the security is held to maturity.⁸

Market-neutral funds. Cautious investors have looked into these vehicles, which are sometimes called long-short funds. Their money managers commonly work with a goal of buying call options to capture some upside and buying put options and derivatives to hedge on the downside. Unsurprisingly, some of your potential for gains may be tempered as a result, and returns may be underwhelming when the bulls are running.⁹

Global macro funds. These are actually hedge funds that seek to take positions in the markets according to macroeconomic principles.

Business development companies (BDCs). These corporations are cousins to venture capital funds. BDCs have to invest 70% of their assets in private or public corporations and pay out 90% or more of their taxable income as dividends. ¹⁰

Currency funds. Mutual funds and ETFs that invest in foreign currencies gain allure when the dollar weakens. These funds are run by an investment manager and employ some tactics of hedge funds, yet are available to the small retail investor.

Collectibles. By acquiring seasoned knowledge of supply and demand forces and trends in the coin, stamp, art and hobby markets, profit can be made far from Wall Street; it may take years of insight (and great instincts) to truly come out ahead.

Who can explore these “alternatives”? Those who meet account minimums are eligible to invest in managed futures and some other forms of alternative investments thanks to niche mutual funds, REITs and ETFs. However, in many cases individuals and investment companies have to meet strict criteria demanding proof of assets in the millions and/or income in the hundreds of thousands to qualify.

This is but an overview. Anyone wishing to enter the alternative investment arena should speak with financial, legal and tax professionals familiar with its nuances.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. and may be reached at www.Map2Finance.com or 248.347.1888.

Neither the information, nor any opinion expressed in this article constitutes a solicitation for the purchase of any futures contract or security. It should not be assumed that the investment options referred to in this article will be profitable or that they will not result in losses. Examples presented in this article are for educational purposes only. There is a high degree of risk in trading activity and there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any trading program.

Different alternative investment instruments involve different levels of exposure to risk. This brief statement cannot disclose all of the risks and other significant aspects of trading in derivative products. In light of the risks, you should undertake such transactions only if you understand the nature of the investment (and any contractual relationships) that you are entering into and the extent of your exposure to risk. There is a risk of total or significant loss resulting from the use of Financial Derivative Instruments (“FDIs”) for investment. You are advised to consider if you have sufficient net worth to be able to assume the risks and bear the potential losses of trading in these investment products. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances. Although derivative instruments can be utilized for the management of investment risk, some of these products are unsuitable for many investors.

Some commodity-based securities use futures contracts to track the underlying commodity, adding a layer of complexity. You should be aware of the implications of investing in these types of securities. A commodity futures-linked security does not necessarily track the spot price (or current settlement price) of the commodity, and performance of the security can deviate substantially from the performance of the commodity being tracked, i.e., you can experience unexpected gains or losses.

Options carry a high level of risk and are not suitable for all investors. The risk of loss in financing a transaction by depositing of collateral or by trading options is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral. Market conditions may make it impossible to execute contingent orders, such as “stop loss” or “stop limit” orders. You may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, your collateral may be liquidated without your consent. Moreover, you will remain liable for any resulting deficit and interest charged. Therefore, you should consider carefully whether such a financing or trading arrangement is suitable in light of your own financial position and investment objectives.

With long options, investors may lose 100% of funds invested. Covered calls provide downside protection only to the extent of the premium received and limit upside potential to the strike price plus premium received. Writing uncovered options involves potentially unlimited risk. Purchasers and sellers of options should familiarize themselves with the type of option (i.e., put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs. If purchased options expire worthless, you will suffer a total loss of your investment, which will consist of the option premium plus transaction costs. Selling (“writing” or “granting”) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavorably. The seller will also be exposed to the risk of the purchaser exercising the option; when that happens, the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is “covered” by the seller holding a corresponding position in the underlying interest, in a futures contract, or in another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. Only experienced persons should contemplate writing uncovered options, and then only after securing full details of the applicable conditions and potential risk exposure.

LD43492-04/12

Citations.

1 – www.usatoday.com [8/17/07]

2 – www.bls.gov [4/13/12]

3 – www.chicagotribune.com[3/14/12]

4 – www.ncreif.org [1/27/12]

5 – www.onwallstreet.com [3/1/12]

6 – www.investopedia.com [2/1/12]

7 – www.investopedia.com [3/3/11]

8 – www.investopedia.com [4/20/12]

9 – blogs.reuters.com [4/11/11]

10 – www.dividenddetective.com [4/21/12]

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Kevin M. Nast Presents: WEEKLY ECONOMIC UPDATE

Provided by Kevin Nast In: Weekly Economic Update

23 Apr 2012

WEEKLY QUOTE

“The path to success is to take massive, determined action.”
- Tony Robbins

WEEKLY TIP

Take a look at your insurance policy and read the fine print about long-term or progressive illness in case you or a loved one are one day diagnosed with Alzheimer’s Disease, Parkinson’s Disease or other forms of neurological disease.

WEEKLY RIDDLE

They have no bodies, but you could say they have tails and heads. What are they?

Last week’s riddle:

What is the beginning of sorrow and the end of sickness? Something you cannot express happiness without? Something that is always in risk, but never in danger?

Last week’s answer:

The letter S.

April 23, 2012

WHAT HELD UP HOME BUYING LAST MONTH?

The National Association of Realtors said existing home sales fell 2.6% for March. A 1.3% drop in inventory for the month might have been a factor, and mild weather in January and February may have helped homes that would have sold in March sell earlier. Warmer January and February temperatures may have also skewed the numbers for housing starts: the Commerce Department said they slipped 5.8% in March. Now for some good news: building permits rose 4.5% last month to the best pace since September 2008, and Freddie Mac had interest rates on 30-year fixed rate home loans averaging just 3.90% last week.^1,2

RETAIL SALES UP 0.8% IN MARCH
This follows a 1.0% gain in the category in February. Did gas prices account for much of the increase? No. Minus gas and car sales, the March gain was 0.7%, and core retail sales (minus autos, gas, and home supplies) rose 0.5% last month.³

LEADING INDICATORS BACK TO MID-2008 LEVELS

The Conference Board’s index of leading indicators reached 95.7 in March, getting closer to the 100 mark that would imply a healthy economy. The index rose 0.3% for the month with seven of ten indicators positive; interest rate spreads, building permits, stock gains and credit availability were the biggest influences.⁴

DOW BREAKS LOSING STREAK, GOLD PULLS BACK

Across April 16-20, the Dow gained 1.40% to 13,029.26 (its first weekly advance in three weeks), the NASDAQ lost 0.36% to 3,000.45 and the S&P 500 gained 0.60% to 1,378.53. Gold futures fell $17.00 (1.02%) on the week, settling Friday at $1,642.10; oil ended the week at $103.05 after a 0.21% gain across five trading days.^5,6,7

THIS WEEK: Monday, ConocoPhillips, Hasbro, Xerox, DR Horton, Netflix and Texas Instruments announce Q1 results. Tuesday, earnings from Apple, Baidu, AT&T, 3M, US Steel, Amgen and Aflac are out plus the latest Case-Shiller home price index and data on March’s new home sales. On Wednesday, earnings reports roll in from Sprint, Boeing, Caterpillar, Eli Lilly, AutoNation, Delta, Credit Suisse, Motorola Solutions, GlaxoSmithKline and Akamai, March durable goods data is out, and the Fed makes a policy statement. Thursday, the NAR gives us its latest pending home sales report, new initial claims figures are in, and results from Barclays, Pulte, Amazon.com, Bristol-Myers Squibb, Chrysler, ExxonMobil, PepsiCo, Royal Dutch Shell, Starbucks and Zynga round out the day. Friday, Chevron, Procter &Gamble and Merck offer Q1 results, and the BEA’s first estimate of Q1 GDP appears plus the final April consumer sentiment survey out of the University of Michigan.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+6.64	+4.62	+0.10	+2.70
NASDAQ	+15.17	+7.06	+3.75	+6.70
S&P 500	+9.62	+3.62	-1.43	+2.25
REAL YIELD	4/20 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.24%	0.82%	2.27%	3.48%

Sources: online.wsj.com, bigcharts.com, treasury.gov, treasurydirect.gov – 4/20/12^5,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Kevin M. Nast is a Financial Planner with Transamerica Financial Advisors, Inc. and may be reached at www.Map2Finance.com or 248.347.1888.

LD43470-04/12

Citations.

1 – www.omaha.com [4/19/12]

2 – www.cnbc.com [4/17/12]

3 – www.businessweek.com [4/20/12]

4 – www.foxnews.com [4/19/12]

5 – blogs.wsj.com [4/20/12]

6 – montoyaregistry.com [4/20/12]

7 – blogs.wsj.com [4/20/12]

8 – bigcharts.marketwatch.com [4/20/12]

8 - bigcharts.marketwatch.com [4/20/12]

8 – bigcharts.marketwatch.com [4/20/12]

9 – treasury.gov [4/20/12]

9 – treasury.gov[4/20/12]

10 – treasurydirect.gov [1/9/02]

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HOW MUCH RETIREMENT INCOME WILL YOU REALLY NEED? Many people underestimate lifestyle costs, medical expenses and inflation.

Provided by Kevin Nast In: Retirement

11 Apr 2012

What is enough? What is not enough? If you’re considering retiring in the near future, you’ve probably heard or read that you need about 70% of your end salary to live comfortably in retirement. This estimate is frequently repeated, but that doesn’t mean it’s true for everyone; it might not be true for you.

You won’t learn how much retirement income you’ll need by reading this article. You’ll want to meet with a qualified retirement planner who can help you plan to estimate your lifestyle needs and short-term and long-term expenses.

With that in mind, there are some factors which affect retirement income needs; too often, they go unconsidered.

Health. Most of us will face a major health problem at some point in our lives; perhaps even multiple or chronic health problems. We don’t want to think about that reality. But if you’re a new retiree, think for a moment about the costs of prescription medicines, and recurring treatment for chronic ailments. These minor and major costs can really take a bite out of retirement income, even with a great health care plan. While generics have demonstrably slowed the advance of prescription drug costs in the past,one estimate found that 65-year-old couple who retired in 2011 would pay $230,000 for health care costs, excluding insurance and Medicare, as well as the costs for nursing home care.^1,2

Heredity. If you come from a family where people frequently live into their 80s and 90s, you may live as long or longer. Imagine retiring at 55 and living to 95 or 100. You would need 40-45 years of steady retirement income.

Portfolio. Many people retire with investment portfolios they haven’t reviewed in years, with asset allocations that may no longer be appropriate. New retirees sometimes carry too much risk in their portfolios, with the result being that the retirement income from their investments fluctuates wildly with the vagaries of the market. Other retirees are super-conservative investors: their portfolios are so risk-averse that they can’t earn enough to keep up with even moderate inflation, and over time, they find they have less and less purchasing power.

Spending habits. Do you only spend 70% of your salary? Probably not. If you’re like many Americans, you may spend as much as 90% or 95% of it. Will your spending habits change drastically once you retire? Again, probably not. Most people only change spending habits in response to economic necessity or in pursuit of new financial goals. People don’t want to “live on less” once they have had “more”.

Social Security (or lack thereof). Will Social Security even exist by the time you’ve retired? A study from the Government Accounting Office brings this into sharp focus, stating that the long-lived program may start to run out of money by 2036 and may be broke by the end of that decade. Furthermore, the GAO suggests a 20% cut in benefits, due to increased longevity and lower employment. Even if SSI is still a going concern in 2040, it may be very slim pickings.^3,4

So will you have enough? When it comes to retirement income, a casual assumption may prove to be woefully inaccurate. Meet with a qualified retirement planner while you are still working to discuss these factors and estimate how much you will really need.

Kevin M. Nast is a financial advisor with Transamerica Financial Advisors, Inc. and may be reached at 248.347.1888 or www.Map2Finance.com.

Investment Advisor Representative with and Securities and Investment Advisory Services offered through Transamerica Financial Advisors, Inc. (TFA) member FINRA, SIPC and a Registered Investment Advisor. Non-Security products and services are not offered through TFA

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Citations.

1 – www.nytimes.com

2 – www.reuters.com

3 – montoyaregistry.com

4 – www.sfgate.com

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