Schwartz Financial Weekly Commentary 2/11/13

 

The Markets

 

Like a climber determined to reach a peak, stock markets continued to move higher last week.

 

Signs of strength in U.S. and international trade data improved the outlook for economic growth at home and abroad. The U.S. trade deficit narrowed in December, a sign that the economy did better than expected during the fourth quarter of last year. In China, robust domestic demand pushed imports significantly higher while exports grew more than anticipated. In Europe, Germany’s 2012 surplus was its second highest in more than 60 years which is a sign of underlying strength in one of the Eurozone’s biggest economies.

 

Positive economic news hurt gold futures which ended the week modestly lower. However, it made riskier assets, like stocks, attractive to investors, which helped push equity markets higher during the week (although trading volumes were low on Friday because of bad weather in the northeast). The NASDAQ closed at a 12-year high, the S&P 500 Index reached a five-year high, and the S&P 500 posted gains for a sixth consecutive week.

 

The Treasury bond market gained ground during the week. However, at a symposium at the St. Louis Federal Reserve, Federal Reserve Board Governor Jeremy Stein’s comments seemed to reinforce the idea that Fed officials are concerned that ongoing accommodative monetary policies could cause some sectors of the bond market to overheat. His comments reinforced the idea that the Fed is considering tightening its credit policies down the road.

 

Data as of 2/8/13	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 (Domestic Stocks)	0.3%	6.4%	12.4%	12.8%	2.7%	6.1%
10-year Treasury Note (Yield Only)	2.0	N/A	2.0	3.6	3.7	4.0
Gold (per ounce)	-0.05	-1.5	-4.5	16.2	12.7	16.2
DJ-UBS Commodity Index	-0.9	1.5	-1.3	-0.3	-5.8	2.2
DJ Equity All REIT TR Index	0.3	4.6	15.1	23.1	7.6	12.6

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results.  Indices are unmanaged and cannot be invested into directly.  N/A means not applicable.

 

there is a new trend in Funerals: Plan your own. Susan Boyle, the Scottish chanteuse who was discovered on Britain’s Got Talent back in 2009 wants to leave mourners at her funeral laughing. What is her plan? She wants to have ‘Nellie the Elephant’ played during the service. Whether you applaud her approach or find it appalling, there is a new trend in the funeral industry: preplanning, prepaying, and personalization. Here are a few of the reasons people are choosing to plan and pay for their funerals ahead of time:

 

Control. When you plan the funeral, you have a pretty good idea about what will happen. You can decide whether there will be a viewing and how your life will be celebrated after the service. You can also create a file with personal information for your obituary, as well as any instructions you have for burial, cremation, or organ donation. Just make sure you leave it with a loved one so they know how to proceed.

 

Negotiate. Grieving family members are rarely good negotiators. Planning ahead gives you a chance to negotiate and secure a guaranteed price on a prepaid plan offered by a funeral home. Make sure you find out answers to questions such as: What happens if prices increase? What happens if you move? What happens if you change your mind?

 

Goodwill. If prepaid plans leave too many questions unanswered, you may choose to fund your funeral through a trust or an insurance policy. Regardless of the payment method, providing instructions with your wishes and funds to cover the expenses can relieve some of the anxiety and stress of a funeral.

 

Personalize. There are many new and unusual options available for funerals and memorial services. Whether you opt for traditional burial, cremation, green burial, mummification, cryonics, a memorial space flight, a memorial reef, or having your ashes compressed into a gemstone, there is a business willing to help.

 

Funeral preferences are changing. Alternatives to traditional funeral home services are becoming popular, especially among Baby Boomers. If you would like to learn more about the options available, visit the Funeral Consumers Alliance web site (www.funerals.org) and the National Funeral Directors Associations web site (www.nfda.org).

 

Weekly Focus – Think About It

 

“Live as if you were to die tomorrow. Learn as if you were to live forever.”

Mahatma Gandhi, philosopher

Value vs. Growth Investing (2/8/13)

Name	1-Week	YTD	4-Week	13-Week	1-Year	3-Year	5-Year
US Market	0.46	6.97	4.50	11.51	14.93	15.83	5.56
Large Cap	0.36	6.35	3.99	10.30	14.98	14.80	4.75
Large Core	0.26	7.52	5.30	11.47	17.46	15.60	6.03
Large Growth	0.83	5.00	2.66	9.36	13.13	15.04	6.24
Large Value	-0.03	6.72	4.22	10.19	14.79	13.80	1.79
Mid Cap	0.69	8.69	5.97	14.65	15.07	18.34	7.18
Mid Core	0.90	8.46	5.74	14.26	15.31	20.21	8.83
Mid Growth	0.25	7.99	5.29	13.61	11.89	18.32	5.92
Mid Value	0.92	9.66	6.91	16.11	18.16	16.43	6.62
Small Cap	0.84	8.48	5.52	15.49	13.71	18.65	8.58
Small Core	0.87	8.12	5.10	15.48	12.90	17.36	8.09
Small Growth	0.80	8.04	5.27	14.83	11.27	19.83	7.90
Small Value	0.85	9.30	6.20	16.13	17.09	18.80	9.68
US Core	0.44	7.77	5.38	12.32	16.81	16.76	6.86
US Growth	0.71	5.78	3.34	10.53	12.69	16.12	6.34
US Value	0.22	7.48	4.89	11.77	15.59	14.67	3.31

©2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

 

Office Notes:

 

Valentines Day-Communicate Love

 

Love, Cupid, hearts, chocolates, diamonds (lots of diamond ads too), cards, and flowers are everywhere—Valentine’s Day is here again! On February 14^th, we celebrate love and friendship. But where did this holiday of affection come from?

The origins of Valentine’s Day are murky. As a matter of fact, I’ve come across numerous versions of its origin. But this is an interesting one I found recently that I thought I’d share with you in the spirit of the holiday.

It’s said that the romance we associate with Valentine’s Day may have sprung from the medieval belief that birds select their mates on February 14th. During the Middle Ages, human “lovebirds” recited verse or prose to one another in honor of the day. “Shall I compare thee to a summer’s day?” wrote William Shakespeare. And poet Elizabeth Barrett Browning expressed love this way:

                        How do I love thee; let me count the ways.
                        I love thee to the depth and breadth and height
                        My soul can reach . . .

Nowadays, the common medium to convey your message of love and appreciation is through a greeting card. “Will you be my Valentine?” people often ask. Probably the first cards, handmade valentines, appeared in the 16th century. As early as 1800, companies began mass-producing them. Initially these cards were hand-colored by factory workers. By the early 20th century even fancy lace and ribbon-strewn cards were created by machine.

Whichever way you decide to let those special people in your life know that they’re loved—be it a poem, serenade, or a greeting card—I hope you make it a special one.

Here at Schwartz Financial, we wish you a Happy Valentine’s Day!

 

Regards,

,

Michael L. Schwartz, RFC®, CWS®, CFS

 

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added. 

 

Michael L. Schwartz, RFC®, CWS®, CFS, offers securities through First Allied Securities, Inc., A Registered Broker/Dealer,  Member FINRA-SIPC.  Advisory Services offered through First Allied Advisory Services, A Registered Investment Advisor.

Schwartz Financial Service is not an affiliate of First Allied Securities, Inc.

 

This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed.  Any opinions expressed herein are subject to change without notice.  An Index is a composite of securities that provides a performance benchmark.  Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.  Past performance is not a guarantee of future results.

 

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

 

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. 

 

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

 

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

 

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

 

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

 

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

 

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

 

* Past performance does not guarantee future results.

 

* You cannot invest directly in an index.

 

* Consult your financial professional before making any investment decision.

 

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