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.
November 2011: Capital Markets & U.S. Economic Update
November 2011: 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.
As year end draws near . . .
During this 2011 holiday season, we will be reminded of ‘wise men’ and in turn, reflect often on those wise individuals who influenced us the most us. Let’s be reminded of these wise words:
You cannot help the poor
by destroying the rich.
You cannot strengthen the weak
by weakening the strong.
You cannot bring about prosperity
by discouraging thrift.
You cannot lift the wage earner up
by pulling the wage payer down.
You cannot further the brotherhood of man
by inciting class hatred.
You cannot build character and courage
by taking away men’s initiative and independence.
You cannot help men permanently
by doing for them what they could, and should, do for themselves.
Abraham Lincoln
Let us hope our great nation will soon, yield a leader(s), with the wisdom, courage and strength of this great president.
Asset Strategies Portfolio Services, Inc., is an institutional, investment consultant located in Auburn Hills, Michigan. For information please call 248-373-9900.
October 2011: Capital Markets & U.S. Economic Update
October 2011: 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.
FUNdamental Facts; 3Q11
- The third quarter stock market loss was the worst in 37 years. According to Barron’s there have been fifteen quarters since 1964 in which the S&P lost 10%plus. Twelve of the following quarters saw rallies, with average gains of 10%.
- As of August, Apple was the largest company in the world by market capitalization with enough cash on its balance sheet to buy Bank of America/Merrill Lynch and still have $7 billion left over.
- The U.S. Government budget deficit for the 2011 fiscal year (ended 9/30) was $1.3 trillion, or 8.5% of of our countries annual output (GDP).
- This is the third-largest budget deficit in U.S. history. It was exceeded only by the budget deficits of 2009 and 2010.
- Also from Barron’s: For every one dollar taxpayers sent to Washington, the U.S. government borrowed another 56 cents.
Asset Strategies Portfolio Services, Inc. is a registered investment advisor with the SEC. Serving institutional investors since 1992.
2635 Lapeer Road, Auburn Hills, Michigan 48326
248-373-9900
Third Quarter 2011, Capital Market Commentary
Sluggish industrial production and consumer spending caused r GDP to fall to a 1.3% annual rate as unemployment remained above 9%. The Consumer Price Index rose 0.5% with higher prices in core consumer good slightly offset by a 0.10% decline in food and energy prices.
U.S. equity markets fell in all three months of the quarter. Large cap growth stocks slightly outperformed large cap value stocks. Value names outperformed growth in the mid- and small-cap ranges. For the quarter, large cap stocks outperformed small cap stocks by a wide margin.
Utilities (1.55%) was the only sector with a positive return. The next best performing sector was Consumer Staples (-4.26%). Economically sensitive sectors; Materials (-24.06%), Financials (-22.86%) and Industrials (-21.02%), were the weakest.
US and Euro zone countries’ lack of austerity plans and inability to control government spending sent investors to the safety of U.S. Treasuries: This, in the face of a downgrade of U.S. Treasury debt by Standard & Poors. Long-maturity treasuries (Barclays Long Treasury, +24.66%) outperformed short-term maturities (Barclays 1-3 Year Index, 0.50%). Credit spreads widened by 78 bps resulting in corporate issues (Barclays U.S. Credit Index, +3.03%) underperforming government issues (Barclays U.S. Government Index, +5.84%). U.S. high yield bonds (Barclays High Yield Index, -6.06%) were the worst performers within the U.S. bond market.
A global flight to safety depressed returns for foreign equity investors as well. The U.S. dollar strengthened against the Euro, eroding returns for dollar-based investors (MSCI Europe, net, -22.61%). The Yen strengthened during the quarter, improving Pacific region stocks (MSCI Pacific, net, -11.70%) performance in dollar terms. Emerging markets stocks (MSCI Emerging Markets, net, -22.56%) sold off due to slowing China economic growth.
Asset Strategies Portfolio Services, Inc. is an SEC registered investment advisory firm providing consulting to institutional investors. Located in Auburn Hills, Michigan, we can be reached at 248-373-9900.
September 2011: Capital Markets & U.S. Economic Update
September 2011: 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.
GEORGE VITTA TO SPEAK AT AGRIP/NLC-RISC CONFERENCE
Association of Governmental Risk and Insurance Pools (AGRIP) and the National League of Cities Risk Information Sharing Consortium (NLC-RISC) will present an Investment Management & Oversight conference on October 5 & 6, 2011. Members of AGRIP and NLC-RISC will attend education sessions geared toward building a sound investment program for their pooled risk funds.
George Vitta will attend and speak at the conference. In addition to his participation in panel and round-table discussions, George will present a session on Performance Measurement. When managing a risk pool, an important component to success is the ability to assess the portfolio’s performance. George will discuss the concept of benchmarking and how to determine an appropriate benchmark.
The current economic environment has been unpredictable and volatile; making this conference timely and fitting. Other sessions will provide an update on the latest developments in the markets, including current interest rates, yield spreads, and major market trends as they pertain to the public funds investor. Also included will be a review of key economic data and what it indicates about where we are in the economic recovery process.
George Vitta is President of Asset Strategies Portfolio Services, Inc., an institutional, investment consulting firm located in Auburn Hills, Michigan. For more information about our firm, our consultants, or the services we offer, please call 248-373-9900.
A DOUBLE DOSE OF REALITY:
This is how the President and Congress (‘Belt Way Buddies’) manage our country’s annual budget:
| Annual Tax Revenue to the U.S. Government: | $2,170,000,000,000 |
| • 2011 Government spending: | $3,820,000,000,000 |
| • Government borrowing (additional debt) to cover spending shortfall: | $1,650,000,000,000 |
| • National debt (as of 8/29/11): | $14,271,000,000,000 |
| • Recent spending cutback (budget reduction): | $38,500,000,000 |
And here is fiscal reality for Main Street USA (‘taxpayers’). Remove 8 zeros and think of the Belt Way’s budget as if it were a taxpayer’s budget:
| Annual family income: | $21,700 |
| • Money the family spends in 2011: | $38,200 |
| • Additional family debt (goes on the credit card; home equity is used up): | $16,500 |
| • Outstanding balance on the credit card: | $142,710 |
| • Family spending cutback: | $385 |
And now we understand why the Belt Way Buddies do not see or feel the pain on Main Street.
Starting with the latter analogy, a template might be developed which provides an intellectual response to solving our nation’s spending and borrowing crisis.
Warren Buffet recently suggested an increased tax on the wealthiest Americans. It is interesting that despite polls suggesting most Americans support a tax increase, Congress refuses to pass a budget increasing taxes.
With politicians taking so many spending items “off the table”, it appears the table is set for the PIIGS (Portugal, Ireland, Italy, Greece and Spain are all countries facing the same spending and debt crisis which the U.S. is in the midst of).
George Vitta, President
Asset Strategies Portfolio Services, Inc. is an independent, fee-only, institutional, investment consultant located in Auburn Hills, Michigan.
For more information, please call 248-373-9900.
Asset Strategies’ Investment Consultants to attend MAPERS Conference
George Vitta and Katherine Ghannam will attend the MAPERS 2011 Fall Conference on Sunday, September 18 through Tuesday, September 20 at the Amway Grand Hotel in Grand Rapids, Michigan.
The three days of educational programming targeted to public retirement plan trustees includes new a ‘New Trustee Workshop’ geared toward first term fiduciaries, investment education sessions on managing risk while pursuing returns and investment strategies. Of great interest to many of our clients will be the review and discussion of the MAPERS membership survey conducted earlier this year.
The theme for the conferences’ social events is the ‘Awesome 80s’. While most of us recall the era of trend-setting fashion and the driving beat of the dance music, we may prefer to forget the 12 – 15% mortgage interest rates that prevailed through much of the decade.
Asset Strategies Portfolio Services, Inc. is an institutional, investment consultant located in Auburn Hills, Michigan. For more information, please call 248-373-9900.
