Archive for the ‘U.S. Economy’ Category
Global Capital Markets Review; 1Q12
Quarterly Market Review; 1Q12
The U.S. economy shows signs of a sustained, modest, expansion. There were 700,000+ new jobs in the three months ending February 29, 2012. Inflation at the consumer level accelerated with the Consumer Price Index rising 1.65%. The Federal Reserve affirmed their target Fed Funds rate of 0.0%-.25% until mid-2014.
U.S. stocks posted the best first-quarter return since 1998, and best quarterly performance since the third quarter of 2009. Growth stocks outperformed value stocks, across all capitalizations. Small cap stocks outperformed large cap stocks. All sectors of the S&P 500 posted positive returns, with the exception of Utilities (-1.58%). The strongest performer was the Financials sector (+22.00%) followed by Information Technology (+21.44%).
As investors rotated into higher-risk assets, they became net sellers of U.S. Treasury bonds, driving yields higher, long-maturity U.S. Gov’t issues (Barclays Long Treasury, -5.80%) significantly underperformed short-maturity issues (Barclays 1-3 Year Treasury, -0.08%). Bond investors continued to demand securities with higher yields (Barclays U.S. Credit, +2.04%; Barclays U.S. MBS, +0.57%; Barclays U.S. Government, -1.12%). U.S. high yield bonds outperformed investment-grade issues (Barclays U.S. High Yield, +5.33%; Barclays U.S. Aggregate, +0.30%).
As investors rotated into higher-risk assets, they became net sellers of U.S. Treasury bonds, driving yields higher, long-maturity U.S. Gov’t issues (Barclays Long Treasury, -5.80%) significantly underperformed short-maturity issues (Barclays 1-3 Year Treasury, -0.08%).
Bond investors continued to demand securities with higher yields (Barclays U.S. Credit, +2.04%; Barclays U.S. MBS, +0.57%; Barclays U.S. Government, -1.12%). U.S. high yield bonds outperformed investment-grade issues (Barclays U.S. High Yield, +5.33%; Barclays U.S. Aggregate, +0.30%).
Strong performance in export-driven economies such as Germany offset the effects of the continuing European debt crisis (MSCI Europe, net, +10.66%). Asia-Pacific stocks (MSCI Pacific, net, +11.27%) were propelled by Japanese equities best quarter in 24 years.
The risk-on trade favored emerging markets equities (MSCI Emerging Markets, net, +14.08%) over developed markets equities (MSCI EAFE, net, +10.86%).
1Q12 FUNdamental Facts
- Apple announced its first quarterly dividend ($2.65 per share) in company history. At a total of around $10 billion per year, it is the biggest dividend payout ever.
- From the end of 1929 through March 2012, reinvested dividends provided almost half the S&P 500 Index’s total return, 9.4% total return comprised of 5.2% price appreciation and 4.2% reinvested dividends.
- From the end of 1979 through March 2012, a $100 investment in the S&P 500 with dividends reinvested turned into $3,145 compared to $1,305 from price change alone.
- Dividend payouts by S&P 500 companies grew at 16.2% in 2011, the fastest rate in 30 years.
- Currently 400 of the 500, S&P 500 companies pay dividends, nearly 89% of the index by market value. This is in line with levels last seen in the 1980s when 90% of stocks in the index paid dividends.
Asset Strategies Portfolio Services, Inc. is a Registered Investment Advisor with the U.S. Securities and Exchange Commission under the Investment Advisor Act of 1940, and amendments thereto. Our only line of business is to provide independent, investment advice and consulting services to institutional investors. We do not sell investment products. We are not affiliated with any broker-dealer firm. For a copy of our Form ADV, please contact our office:
Asset Strategies Portfolio Services, Inc. 2635 Lapeer Road, Auburn Hills, Michigan 48326-1926 Telephone: 248-373-9900 Email: info@assetsrategie.com
April 2012: Capital Markets & U.S. Economic Update
April 2012: Capital Markets & U.S. Economic Update
Asset Strategies Portfolio Services, Inc. is an independent institutional investment consultant located in Auburn Hills, Michigan. For additional information please call (248) 373-9900.
March 2012: Capital Markets & U.S. Economic Update
March 2012: Capital Markets & U.S. Economic Update
Asset Strategies Portfolio Services, Inc. is an independent institutional investment consultant located in Auburn Hills, Michigan. For additional information please call (248) 373-9900
Asset Strategies Portfolio Services, Inc.
Celebrates 20 Years of Excellence
1992 – 2012
The Asset Strategies team gathered with friends, family and clients on Friday, March 30, 2012 to celebrate the 20 year anniversary of the firm. In attendance were trustees from many of the retirement plans advised by the firm. The City of Southfield Fire and Police Retirement System, by its’ board President, Dick Keier, presented George Vitta with a framed, resolution of the board in recognition of service to the board since September of 1993. Specifically, the trustees resolved;
RESOLVED, that the Board of Trustees, on behalf of itself and all concerned, hereby expresses its gratitude and appreciation to Mr. Vitta and Asset Strategies for their honorable and distinguished service as the Retirement System’s Investment Consultant, and be it further
RESOLVED, that the Board of Trustees, on behalf of all the aforementioned parties, says “Thank You for a Job Well Done” and expresses its congratulations to Asset Strategies in celebration of its 20th Anniversary.
Asset Strategies has provided strategic investment advice and oversight for client fiduciaries from all major plan sponsor types including union and multi-employer funds, government retirement plans, corporate retirement plans, endowments, foundations, healthcare plans and managed risk pools since 1992. Our objective is to ensure that all plan fiduciaries have the education and information necessary to fulfill their fiduciary responsibilities. We are continuously working to make fiduciary responsibilities easier to manage by identifying ways to enhance the long-term value of their funds. The cornerstone of our philosophy is the belief that we must add value for our clients.
Asset Strategies has never been affiliated with brokers, banks, insurance companies, mutual funds or money managers. We have no corporate partners or joint venture partners. Independence and objectivity were the foundation for the creation of this firm in 1992, and to date, there has been no compelling reason to sacrifice either.
Like many of life’s milestones, our recent anniversary has the team reflecting on years past and the people we have served. Recognizing that our success is dependent upon the confidence and trust of our clients, we extend our thanks and appreciation for their ongoing support. Cheers to the next 20 Years!
February 2012: Capital Markets & U.S. Economic Update
February 2012: Capital Markets & U.S. Economic Update
Asset Strategies Portfolio Services, Inc. is an independent institutional investment consultant located in Auburn Hills, Michigan. For additional information please call (248) 373-9900.
“Fall 2008 – Deja vu”
The American Enterprise Institute, a Washington ‘think tank’ issued a report on January 19, 2012 entitled ‘Bet the house: why the FHA is go (for) broke’. Click the link to see the entire report. A few highlights we think are important:
1. FHA loans were designed to help low- and moderate-income borrowers finance as much as 97% of their home’s purchase price.
2. Congress unfettered the agency, raising the $625,750 conforming loan limit it had imposed under Dodd-Frank “reform” to $729,750.
3. In December 2011, the 30-day-plus delinquency rate on FHA insured loans rose to nearly 18%, from 17.42% in November.
4. The FHA is not subject to the same capital requirements or accounting methods that private-market insurers must meet.
5. The agency’s traditional single family program has about $1.2 billion of capital supporting more than $1 trillion or loan guarantees, leaving it levered by nearly 1,000 to one.
6. The Agency, as measured by accounting standard applied to private insurers, is “deeply insolvent” with a capital shortfall of $35 billion
7. If it were private, regulators would “immediately shut it down.”
8. Meanwhile, the FHA wants to relax credit scores for borrowers.
Asset Strategies Portfolio Services, Inc. is a Registered Investment Advisor with the U.S. Securities and Exchange Commission under the Investment Advisor Act of 1940, and amendments thereto. Our only line of business is to provide independent, investment advice and consulting services to institutional investors. We do not sell investment products. We are not affiliated with any broker-dealer firm. For a copy of our Form ADV, please contact our office:
2635 Lapeer Road, Auburn Hills, Michigan 48326-1926
Telephone: 248-373-9900
Email: info@assetstrategie.com
Periodic Table of Investment Returns (through 2011)
4Q11 Periodic Table of Investment Returns
‘Click’ to open the Periodic Table
Asset Strategies Portfolio Services, Inc. is an institutional, investment consultant located in Auburn Hills, Michigan. Please call 248-373-9900 for more information.
January 2012: Capital Markets & U.S. Economic Update
January 2012: Capital Markets & U.S. Economic Update
Asset Strategies Portfolio Services, Inc. is an independent institutional investment consultant located in Auburn Hills, Michigan. For additional information please call (248) 373-9900.
Fourth Quarter 2011, Capital Markets Commentary
The U.S. economy continued expansion at a modest pace. Reported unemployment trended down, ending the year at 8.5%. Inflation at the consumer level fell with the Consumer Price Index declining by -0.54%. The Federal Reserve maintained its historically low Fed Funds range of 0 – 0.25%.
U.S. equity markets rebounded sharply from the abysmal third quarter lows. Value stocks outperformed growth stocks, across all capitalizations. Small cap stocks outperformed large cap stocks. All sectors of the S&P 500 posted positive returns. Energy (+18.22%), driven by a 25% increase in crude oil prices, was the best performing sector. The next best performer was Industrials (+16.61%). Telecommunications (+7.62%) was the worst performer.
The flight-to-safety into Treasury bonds diminished as investors rotated into equities. Demand for U.S. Treasuries was strong due to concerns over the Eurozone debt crisis. The best performing investment-grade bond sector was long-maturity treasuries (Barclays Long Treasury, +1.86%). U.S. credits (Barclays U.S. Credit, +1.70%) outperformed government-related debt (Barclays U.S. Government, +.84%) and mortgage-backed securities (Barclays U.S. MBS, +.88%). U.S. high yield bonds (Barclays U.S. High Yield, +6.46%) outperformed all bond sectors by a wide margin.
Foreign equity investors received some relief with positive returns for both developed and emerging stocks. Emerging markets (MSCI Emerging Markets, net, +4.42%) outperformed developed markets (MSCI EAFE, net, +3.33%). European stocks (MSCI Europe, net, +5.39%) rallied as European lenders attempted to address the growing default crisis. Pacific region stocks (MSCI Pacific, net, -.30%) fell as Japan’s economy continued its slow recovery from the March earthquake and tsunami.
This was not a good year for hedge funds and other types of alternative investments, in general (see FUNdamental facts for some reasons). Commercial real estate however, was one of the best performing asset class, owing to the reduced risk-perception by investors. This perception brought many investors back to the asset class and drove prices up significantly. Most appreciation was due to ‘perceived values or accounting valuations’ rather than transaction-based values.
Asset Strategies Portfolio Services, Inc. is an independent institutional investment consultant located in Auburn Hills, Michigan. For additional information please call (248) 373-9900.
December 2011: Capital Markets & U.S. Economic Update
Capital Mkts & US Econ Mthly Update Dec11
Asset Strategies Portfolio Services, Inc. is an independent institutional investment consultant located in Auburn Hills, Michigan. For additional information please call (248) 373-9900.
