Finished With Your Spring Cleaning, Then Take Advantage of Our Spring Shredding Event!

On Saturday, May 31st from 11AM to 1PM we will be providing free, secure containers for documents/paperwork that you'd like to have shredded. In addition, we will be serving lunch and refreshments. This is a way for you to conveniently get rid of old clutter and keep your information confidential until it is shredded.

We hope you can attend, and feel free to invite others. Please note, if you cannot attend the event, you can always drop off your documents at our office next week, and we will put them in the secure containers. If you have any questions regarding this event, please contact the office or click on the image for details.IAG Shredding Event

  News on the Street

News on the StreetThe good news:

U.S. home construction surged in April and building permits rose to the highest level in more than five years, a sign the industry is rebounding after a weak winter and sees room for growth.

Along this line, Home Depot said May sales were "robust" and the No. 1 home improvement retailer raised its full-year earnings forecast. Spring is the biggest season for home improvement retailers as homeowners and others work on their yards and gardens.

Meanwhile, the U.S. housing market has emerged from a deep slump, aided by rising home prices, steady job growth and fewer troubled loans dating back to the housing-bubble days. While the housing market has recently struggled to maintain that momentum, many home owners are spending more to renovate their homes.

Home Depot's CEO noted that he saw the remainder of the year looking good for the home improvement chain.

The bad news:

Disappointing earnings from retailers Staples, Dick's Sporting Goods, Urban Outfitters and others stirred fresh concerns about the retail sector and the potential negative outlook for consumer spending in the U.S, which resulted in a selling spree Tuesday.

In addition, Federal Reserve Bank of Philadelphia President Charles Plosser, said interest rates may have to rise sooner rather than later. This stance comes counter to prior comments from other Fed officials who've been advocating low interest rates for the foreseeable future.

The bottom lineThe bottom line:

It is possible that some traders (not long-term investors) took profits in light of the previously noted bad news. That being said, there has not been much in the geopolitical or economic headlines to negatively impact the current bull market. Believe me, I am not celebrating or worrying, but just patiently waiting for market downturns before adding or investing any new cash.

Reaching for Yield...Don't overdo it!

The Wall Street Journal reported this week that some large investors are rushing into the riskiest corporate bonds. This is the result of them being frustrated by low interest rates on safer investments and convinced that even companies with shaky finances are in little danger of default.

These investors have been buying up speculative grade corporate bonds, which is driving up prices on these bonds and pushing down their yields, which fell to their lowest level on record (per the Bank of America Merrill Lynch index). Yields fall when prices rise.

I can understand investors wanting a higher return on their funds, but too much of a good thing is definitely bad for you. As such, I believe these investors who disproportionately invest too heavily in one sector in the hopes of earning more income, will eventually be disappointed. High yield bonds are okay, but in manageable amounts.

Points to Ponder

"Expected returns are best when confidence is entirely absent, confusion reigns and the disputes are unmistakable. The more the leadership becomes crystal clear the more caution is required. Right now things feel like we're in the indeterminate middle."

                   Michael Goldstein, Empirical Partners

"The U.S. economy is growing, albeit with bumps in the road. With a confrontation unlikely in Congress over raising the federal debt ceiling, business and consumer psychology should continue to improve."

                   Mario Gabelli, Barron's, February 1, 2014

Quotes

"Investors should diversify emotionally as well as financially."

                   Terrence Odean

 "Those who want freedom from concerns must accept lower returns."

                   Benjamin Graham

 "Market efficiency is only a half truth. You can profit from irrational exuberance."        

                   Robert Shiller

Have a great Memorial Day Weekend!

Memorial Day

 

 

 

 

 

 

Tony Moeller, CPA

The information listed in this commentary is a compilation of various publicly available sources and is for informational purposes only. It is not a recommendation or solicitation of any particular investment or strategy. A risk of loss is involved with investments in the stock and bond markets.

If you enjoy the commentary and believe others may benefit or find it of interest, please feel free to forward it on. Also, interested individuals can contact us, and we will be happy to add them to our mailing list.

Sign up to receive our Commentary

First Name:
Last Name:
Email:
Security Code:
 
Back to top