Monthly Archives: July 2014

A Day in the Life

Weekly Market Commentary
July 28, 2014

The Markets

Anchors aweigh! Put thoughts of the Frank Sinatra and Gene Kelly movie aside. If the Naval Academy fight song is playing in your head, tune it out. The anchors being raised here are setting adrift perceptions that government bonds are always low risk investments.

Behavioral finance – a field of study that looks at behavioral and cognitive psychology in tandem with conventional economics and finance to explain why investors do what they do – tells us investors have been known to make decisions based on faulty reasoning. In some cases, they tend to classify new information based on experience or knowledge.

For instance, people who adhere to the idea U.S. government bonds are low-risk investments might be inclined to take in stride the news that geopolitical tensions pushed bond yields lower during the past two weeks. Who cares that yields are at a low for the year? Government bonds are not risky investments, right?

Not necessarily. While it’s true that U.S. Treasury bonds are backed by the full faith and credit of the U.S. government, they are still subject to the unpredictable changes in the markets. One thing to remember is interest rates and bond prices interact like children on a seesaw. When interest rates go down, bond prices go up. When interest rates go up, bond prices go down. Bond prices generally have been going up since the early 1980s and rates are currently at very low levels. As economies recover and rates start to rise again, bond prices are likely to fall and could have a negative effect on the value of portfolios holding government bonds, particularly those with longer durations.

Bond yields have stayed low during recent years largely because of Federal Reserve monetary policy. President of the Federal Reserve Bank of St. Louis James Bullard recently said there is a mismatch between our macroeconomic goals and the stance of monetary policy. While this mismatch is not currently causing problems for the economy, it may in the future. This week, Fed officials are expected to discuss when and how to begin lifting rates from near zero – a level they’ve been at since 2008.

Data as of 7/25/14
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 0.0% 7.0% 17.0% 13.9% 15.0% 6.2%
10-year Treasury Note (Yield Only) 2.5 NA 2.6 3.0 3.7 4.5
Gold (per ounce) -0.9 7.8 -2.4 -7.1 6.3 12.7
Bloomberg Commodity Index 0.0 2.8 1.2 -7.7 0.9 -1.1
DJ Equity All REIT Total Return Index -0.7 17.8 10.7 10.9 21.7 9.9
S&P 500, Gold, Bloomberg 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 Total Return 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.

‘VIDEO GAMER’ MAY SOON JOIN ASTRONAUT, ATHLETE, AND SUPER HERO on children’s lists of what they want to be when they grow up. Those who reach the top of the e-sport may do well financially since video game competitions can be quite lucrative.

Okay, first, let’s tackle the concept of e-sports. If you’re one of those people who have a hard time thinking of chess or poker as sports, the idea of video games as sports will probably throw you for a loop. However, last week ESPN.com featured The International – the fourth annual world championships of the popular video game ‘Defense of the Ancient 2’ (Dota 2). The event, which was held in KeyArena in Seattle, sold out. In addition, more than 300,000 people watched the event on a popular video game streaming website.

Total prize money for the tournament was $10.9 million, a record for video game competitions and all the more remarkable because fans raised much of the prize money. That’s a big step up from the first championship. It was held in 2011 in Cologne, Germany and the teams competed for a grand prize of $1 million.

The League of Legends championship, another big gaming competition, is coming up in October. Two teams will compete in Sangam Stadium in Seoul, South Korea for bragging rights, the Summoner’s Cup, and $1 million in prize money. USA Today reported last year’s championship “was watched by more people than the NBA Finals, World Series, and BCS (Bowl Championship Series) National Championship [college football].” If that seems like a stunning statistic, consider this: 67 million people play League of Legends every month.

According to PCWorld.com, “Playing PC (personal computer) games has become a bona fide career option and right now business is booming… A confluence of events occurred at just the right time in 2010 to reinvigorate the PC’s strong legacy of hardcore competitive gaming. Most significantly, the PC’s return as professional gaming’s platform of choice is tied to the economic rise of Asia along with huge missed opportunities by console game manufacturers.”

Weekly Focus – Think About It

“The best time to plant a tree was 20 years ago. The second best time is now.”
–Chinese Proverb

Best regards,

John Raudat, AIF, CFS, PPC

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 e-mail with their e-mail address and we will ask for their permission to be added.

Securities offered through LPL Financial, Member FINRA/SIPC.

* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
*Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* 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 afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg 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 Total Return 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.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the Market Commentary, please reply to this e-mail with “Unsubscribe” in the subject line.

Sources:
http://www.investopedia.com/university/behavioral_finance/
http://cfaglossary.blogspot.com/2013/12/behavioral-biases.html
http://blogs.barrons.com/incomeinvesting/2014/07/25/bonds-end-week-on-a-strong-note-30-yr-yield-hits-fresh-2014-low/?mod=BOL_hp_blog_ii (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-28-14_Barrons-Bonds_End_Week_On_A_Strong_Note-Footnote_3.pdf)
http://www.stlouisfed.org/newsroom/displayNews.cfm?article=2258
http://online.wsj.com/articles/feds-rate-debate-looks-set-to-heat-up-1406317442 (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-28-14_WSJ-Feds_Rate_Debate_Looks_Set_to_Heat_Up-Footnote_5.pdf)
http://www.economist.com/blogs/graphicdetail/2014/07/daily-chart-15 (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-28-14_The_Economist-Zap_Bang_Ka-ching-Footnote_6.pdf)
http://ftw.usatoday.com/2014/07/espn-dota-2-international-esports
http://www.keyarena.com/events/detail/the-international
http://bits.blogs.nytimes.com/2014/06/25/league-of-legends-sets-game-championship-for-korea-stadium/?_php=true&_type=blogs&_r=0
http://www.pcworld.com/article/2036844/why-gamers-in-asia-are-the-worlds-best-esport-athletes.html
http://www.forbes.com/sites/kevinkruse/2013/05/28/inspirational-quotes/
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Despite Last Week’s World Cup Victory for Germany, the European Markets Weren’t Celebrating

Weekly Market Commentary
July 14, 2014

The Markets

Germany may have clobbered Brazil in the World Cup quarterfinals last week, earning a chance to become the first European team to win the event in Latin America, but things back home in Europe weren’t quite so rosy.

First, a sizeable Portuguese bank startled investors when it failed to make an interest payment on its short-term debt. Investigators have found financial irregularities at the bank’s parent company and don’t believe the problem is systemic, according to Barron’s.

“…but jittery investors didn’t hang around to find out the true picture. The missed bond payment sparked an indiscriminate selloff among financials across Europe. Banks in countries at the periphery of the euro zone were particularly hard hit, but the ripples washed over markets at the core, too.”

In addition, Reuters reported a Spanish bank cancelled its bond offering and Greece was only able to place one-half of its debt issue as a wake of uncertainty about Europe’s financial system buffeted investors.

Worries in Europe intensified when industrial production numbers came in below expectation. In Germany, production fell by 1.8 percent. In France, it was off by 1.7 percent, in Britain by 1.3 percent, and in Italy by 1.2 percent. Weak industrial production is a sign the European economy is struggling to find solid footing. By the end of last week, European financial companies had lost 3.7 percent of their value and the Stoxx Europe 600 Index was down 3.2 percent.

U.S. markets moved lower last week, too, as reminders of Europe’s banking crisis renewed investor fear. Barron’s suggested investors’ skittishness also had something to do with the fact that Standard & Poor’s 500 Index has not experienced a 10 percent correction for more than two years. Corrections typically occur about every 25 months helping to, “…wipe out some of the frothy sentiment, reset expectations, and prepare the way for another move higher.”

Data as of 7/11/14
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.9% 6.5% 17.5% 14.3% 16.9% 5.9%
10-year Treasury Note (Yield Only) 2.5 NA 2.6 2.9 3.4 4.4
Gold (per ounce) 1.3 11.1 3.9 -5.0 8.0 12.6
Bloomberg Commodity Index -3.0 3.5 1.2 -6.6 2.7 -1.1
DJ Equity All REIT Total Return Index 0.9 17.1 9.3 11.2 24.6 9.5
S&P 500, Gold, Bloomberg 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 Total Return 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.

WHAT IS THE VALUE OF HIGHER EDUCATION? DOES IT JUSTIFY THE COST? It appears the value of education is in the eye of the beholder. Aristotle thought education was about learning to think. He said, “It is the mark of an educated mind to entertain a thought without accepting it.” Nelson Mandela, who helped lead South Africa out of apartheid, said, “Education is the most powerful weapon you can use to change the world.” Ben Franklin wrote, “An investment in knowledge pays the best interest.” On the other hand, Abe Lincoln was self-educated and Mark Twain belittled school boards.

The cost and value of higher education have become issues for debate in recent years. During the 2013-14 school year, the average cost of tuition, room and board, and fees at a four-year public, in-state university was more than $18,000 per year or about $72,000 for four years. At a four-year private non-profit university, the cost was almost $41,000 per year or about $164,000 over four years. That’s a hefty chunk of change even without adding the interest owed on student loans and it has left some parents and students wondering whether it was money well spent.

James Altucher, a venture capitalist, Cornell graduate, and father of two young children, wrote an article questioning the value of college. He suggested young people choose not to attend college and instead start businesses, travel the world, and create art, among other things. He has since become one of the leaders of the ‘anti-college’ crusade, said New York Magazine. When asked about his stance on higher education, he told the publication he was trying to reduce demand for college so costs would go down.

Skipping college may not be the best idea. As it turns out, more than 98 percent of the world’s millionaires went to college, according to a 2013 study from Spear’s magazine and WealthInsight, a consultancy group. Just over one percent took a pass on higher education or dropped out before graduating. The dozen colleges and universities with the most millionaire alumni are:

• Harvard University
• Harvard Business School
• Stanford University
• University of California
• Columbia University
• University of Oxford
• Massachusetts Institute of Technology
• New York University
• University of Cambridge
• University of Pennsylvania
• Cornell University
• University of Michigan

Millionaires who participated in the survey typically studied engineering, business, economics, and law, although many did not pursue careers in their fields of study. According to a Spear’s editor, “Entrepreneurs, who ultimately end up being the wealthiest in the world, are innovators, and the top subjects are those which encourage new and smart thinking, whether technical or financial.”

Weekly Focus – Think About It

“It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.”
–Leonardo da Vinci, Italian inventor

Best regards,

John Raudat, AIF, CFS, PPC

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 e-mail with their e-mail address and we will ask for their permission to be added.

Securities offered through LPL Financial, Member FINRA/SIPC.

* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Investing in foreign securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
*Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* 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 afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg 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 Total Return 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.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the Market Commentary, please reply to this e-mail with “Unsubscribe” in the subject line.

Sources:
http://bleacherreport.com/articles/2125144-why-history-says-argentina-will-defeat-germany-in-american-world-cup-final
http://online.barrons.com/news/articles/SB50001424053111903684104580015250374084756?mod=BOL_hp_we_columns (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-14-14_Barrons-Espirito_Santo_Staggers-Footnote_2.pdf)
http://in.reuters.com/article/2014/07/13/economy-global-idINL6N0PM3CM20140713
http://www.economist.com/blogs/buttonwood/2014/07/european-economy (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-14-14_The_Economist-Four_is_a_Trend-Footnote_4.pdf)
http://uk.reuters.com/article/2014/07/10/uk-france-economy-idUKKBN0FF0OK20140710
http://www.reuters.com/article/2014/07/10/us-markets-stocks-idUSKBN0FF18H20140710
http://online.barrons.com/news/articles/SB50001424053111903684104580015201127411496?mod=BOL_hp_we_columns (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-14-14_Barrons-Climbing_a_Staircase_of_Fear-Footnote_7.pdf)
http://www.brainyquote.com/quotes/quotes/a/aristotle100584.html
http://www.brainyquote.com/quotes/quotes/n/nelsonmand157855.html
http://www.brainyquote.com/quotes/quotes/b/benjaminfr141119.html
https://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2013-14
http://www.jamesaltucher.com/2011/01/8-alternatives-to-college/
http://nymag.com/news/features/college-education-2011-5/
http://www.spearswms.com/spears-intelligence/lists/smarter-money-how-the-wealthy-have-been-educated#.U8BxIhZN1Zg
http://www.brainyquote.com/quotes/quotes/l/leonardoda120920.html
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Don’t Let Me Down

Weekly Market Commentary
July 7, 2014

The Markets

Happy birthday, United States of America!

U.S. stock markets gave Americans plenty of reason to celebrate over the Fourth of July weekend. The Dow Jones Industrials Average earned ‘oohs’ and ‘ahhs’ from investors and pundits as it shot above 17,000 last week (a significant gain from March 2009 when it traded in the mid-6,000 range). Barron’s pointed out the Standard & Poor’s 500 Index was no slouch either having closed “above its 200-day trading average for more than 400 consecutive trading days, the second longest streak in the last 50 years.”

The Telegraph observed, however, market highs sometimes cause investors to engage in emotional behaviors like anchoring – assigning random meaning to numbers or milestones. The online publication suggested some investors may decide the Dow surpassing 17,000 means the market is overvalued and they should sell even though they have no specific evidence to support the idea of overvaluation. Not everyone agrees that’s the way investors will roll. Experts told MarketWatch.com they expect the new high to spark buying rather than selling particularly if herd instincts are set off. Herding describes a situation in which investors gravitate toward specific investments because everyone else is doing it.

These emotion-driven investment behaviors can lead to investment mistakes. The Telegraph also suggested it’s better to choose a tangible valuation measure when trying to determine whether a company’s shares are fairly valued. A valuation measure they recommended is dividend yield: the dollar amount of the dividends a company pays investors each year divided by the company’s share price. In late June, Yahoo! Finance reported, “There is now an extraordinary crowding of big U.S. stocks around the 3% dividend yield level, a threshold that seems to exert a gravitational pull as investors bereft of easy sources of income bid up equities until they yield just a bit more than the 10-year Treasury note.”

Emotions also were running high during the second quarter for reasons having nothing to do with markets. A publicly-traded social media site let it be known it had conducted a psychological experiment on about three-quarters of a million users without their express knowledge. The study’s over-the-top name, Experimental Evidence of Massive-scale Emotional Contagion through Social Networks, brings Austin Powers movies to mind.

Bond markets, as they have throughout much of 2014, continued to confound investors and analysts. According to Barron’s, last week’s strong jobs report, which is credited with pushing stock markets to new highs, may have given investors a déjà vu moment when 10-year Treasury yields rose and then settled back down. The bond market had responded to the Labor Department’s May report in almost the same way. Strong domestic economic news pushed
rates higher and then they retreated. Foreign demand for U.S. Treasuries was thought to be the reason rates pulled back.

Also, during the second quarter, the Federal Reserve confirmed and reconfirmed the ongoing need for accommodative monetary policy. Recently, Chairwoman Janet Yellen said, “…monetary policy has powerful effects on risk taking. Indeed, the accommodative policy stance of recent years has supported the recovery, in part, by providing increased incentives for households and businesses to take on the risk of potentially productive investments. But such risk-taking can go too far, thereby contributing to fragility in the financial system.” She also said she saw no immediate need to tighten monetary policy by raising interest rates.

The World Bank expects the global economy to gain momentum during 2014. Its June report found economic growth in developing countries is likely to be disappointing this year coming in below 5 percent largely because of first quarter’s weakness. Developed market economies have fared better year-to-date. The Euro Area is expected to grow modestly during 2014. Expectations for the United States were revised lower after first quarter’s contraction, but our economy is expected to grow during the remainder of 2014.

Data as of 7/3/14
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) 1.3% 7.4% 22.9% 14.1% 17.2% 5.9%
10-year Treasury Note (Yield Only) 2.7 NA 2.5 3.1 3.5 4.5
Gold (per ounce) 0.0 9.7 5.4 -4.1 7.2 12.7
DJ-UBS Commodity Index n/a n/a n/a n/a n/a n/a
DJ Equity All REIT Total Return Index -0.3 16.1 12.6 10.8 23.7 9.4
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 Total Return 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.

HARVARD DOES IT. MIT DOES IT. UNIVERSITY OF CHICAGO AND STANFORD DO IT. It doesn’t cost a fortune either. In fact, it’s often free. The world’s best colleges and universities (along with organizations like The World Bank, Museum of Modern Art (MoMA), and National Geographic) are offering massive open online courses (MOOCs) as well as interactive online classes. The offerings are available to anyone with Internet access anywhere in the world.

As The Economist tells it, rising costs, changing labor markets, and disruptive technology are conspiring to overthrow higher education as we know it, and the revolution could send colleges and universities down a path previously taken by print newspapers. The success of online education is uncertain, however. It’s held back, in part, by lack of a formal system of accreditation, although some universities have begun to accept MOOC credits toward their degrees.

“Traditional universities have a few trump cards. As well as teaching, examining, and certification, college education creates social capital. Students learn how to debate, present themselves, make contacts… The answer may be to combine the two… Students could spend an introductory year learning via a MOOC, followed by two years attending university and a final year starting part-time work while finishing their studies online. This sort of blended learning might prove more attractive than a four-year online degree.”

Needless to say, the revolution in education could have significant implications for parents and students who are contemplating the costs of higher education as well as workers who need to develop new skills to find places in the labor force.

Weekly Focus – Think About It

“Education is not the filling of a pail, but the lighting of a fire.”
–William Butler Yeats, Irish poet

Best regards,

John Raudat, AIF, CFS, PPC

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 e-mail with their e-mail address and we will ask for their permission to be added.

Securities offered through LPL Financial, Member FINRA/SIPC.

* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
*Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* 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 afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* 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 Total Return 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.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the Market Commentary, please reply to this e-mail with “Unsubscribe” in the subject line.

Sources:
http://www.marketwatch.com/story/why-the-dow-hitting-17000-actually-matters-2014-06-12
http://finance.yahoo.com/q/hp?s=%5EDJI&a=02&b=1&c=2009&d=02&e=31&f=2009&g=d
http://online.barrons.com/news/articles/SB50001424053111904544004579650510623118896?mod=BOL_hp_we_columns (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-07-14_Barrons-Dow_Tops_17000_on_Stellar_Jobs_Report-Footnote_3.pdf)
http://www.telegraph.co.uk/finance/markets/10948379/Dividend-yield-is-better-guide-than-the-FTSE-100-at-7000.html
http://www.investopedia.com/terms/h/herdinstinct.asp
http://www.investopedia.com/terms/d/dividendyield.asp
http://finance.yahoo.com/blogs/daily-ticker/all-just-chips–yield-blind-investors-view-intel-same-as-pepsico-151403290.html
http://www.pnas.org/content/111/24/8788.full.pdf
http://blogs.barrons.com/incomeinvesting/2014/07/03/jobs-report-deja-vu-after-initial-selloff-bonds-bounce-back/?mod=BOL_hp_blog_ii (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-07-14_Federal_Reserve-Jobs_Report_Deja_Vu-Footnote_9.pdf)
http://www.federalreserve.gov/newsevents/speech/yellen20140702a.htm
http://www.worldbank.org/en/publication/global-economic-prospects
https://www.edx.org/schools-partners
http://www.economist.com/news/leaders/21605906-cost-crisis-changing-labour-markets-and-new-technology-will-turn-old-institution-its (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-07-14_The_Economist-Cost_Crisis-Footnote_13.pdf)
http://www.economist.com/news/briefing/21605899-staid-higher-education-business-about-experience-welcome-earthquake-digital (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/07-07-14_The_Economist-Staid_Higher-Education_Business-Footnote_14.pdf)
http://www.brainyquote.com/quotes/quotes/w/williambut101244.html
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