Monthly Archives: November 2016

November 28, 2016

The Markets

It’s a myth!

According to WebMD, the amino acid L-Tryptophan is not responsible for Americans’ post-Thanksgiving food coma. The real culprit is overeating. So, last week’s post-feast sleepiness can be blamed on big appetites.

Investors also indulged their appetite for risk last week. Barron’s reported:

“…the stock market sent all four major U.S. benchmarks – the Standard & Poor’s 500, the Dow industrials, the NASDAQ Composite, and the Russell 2000 – to record highs last week, on the same day. Lest you think that’s an easy feat, we haven’t seen such a gathering at the summit since December 31, 1999, back when we had juvenile waistlines and Napster accounts. Then, for emphasis and encore, the market did it again a day later, a back-to-back fete the likes of which we haven’t seen since the positively Pleistocene era…of 1998. The buying binge continued on Friday, after Thanksgiving’s regrettable interruption, propelling the indexes to – you guessed it – more record highs.”

U.S. stock markets are doing well and so are some overseas markets. Barron’s reported Canada’s national index is up 14.3 percent for the year, Thailand’s is up 14.4 percent, Indonesia’s is up 12.6 percent, and the United Kingdom’s is up 8.5 percent.

It’s quite gratifying to watch the value of stocks rise. However, U.S. shareholders may want to ask, “Is this congregation of indexes at record highs a sign that our seven-year-old bull market is finding a second wind – or is it a signal that the party has peaked?”

 
HOW MUCH WEALTH IS THERE IN THE WORLD? In 2016, the Earth’s inhabitants were worth about $256 trillion, according to the Global Wealth Report by Credit Suisse Research Institute. Population has grown along with wealth.

1. North America, which has more than 5 percent of the world’s population, is the wealthiest region with about $92 trillion of the world’s wealth.
2. Europe, which accounts for about 12 percent of the world’s population, is next with about $73 trillion.
3. The Asia-Pacific region, excluding China and India, encompasses almost 25 percent of the world’s population, and is worth a bit more than $53 trillion.
4. China has more than 20 percent of the world’s population and comes in just above $23 trillion.
5. Latin America has less than 10 percent of the world’s people and accounts for about $7.5 trillion of the world’s wealth.
6. India, with more than 15 percent of earth’s inhabitants, has almost $3.1 trillion.
7. Africa has more than 10 percent of the world’s population and about $2.5 trillion of its wealth.

The Economist reported:

“If you had only $2,220 to your name (adding together your bank deposits, financial investments, and property holdings, and subtracting your debts) you might not think yourself terribly fortunate. But you would be wealthier than half the world’s population… If you had $71,560 or more, you would be in the top tenth. If you were lucky enough to own over $744,400 you could count yourself a member of the global 1% that voters everywhere are rebelling against.”

Of course, where a person lives factors into how wealthy they feel. For instance, last week, Expatison.com reported living in New York was 15 percent more expensive than living in London, and London was 30 percent more expensive than living in Toronto. Living in Toronto was 115 percent more expensive than living in Belgrade. Belgrade was 60 percent less expensive than Singapore, and Singapore was 139 percent more expensive than Mumbai.

Weekly Focus – Think About It

“You don’t learn to walk by following rules. You learn by doing, and by falling over.
–Richard Branson, British businessman and entrepreneur

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* 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.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* 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.

Sources:
http://www.webmd.com/food-recipes/features/the-truth-about-tryptophan#3
http://www.barrons.com/articles/wall-street-borrows-from-next-years-gains-1480137144?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-28-16_Barrons-Wall_Street_Borrows_from_Next_Years_Gains-Footnote_2.pdf)
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_Nav_MAR_hpp (Click on U.S. & Intl Recaps, International Perspective, then on ‘Uncertain times’) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-28-16_Barrons-Global_Stock_Market_Recap-Footnote_3.pdf)
http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=AD783798-ED07-E8C2-4405996B5B02A32E
http://www.economist.com/news/business-and-finance/21710771-new-analysis-how-worlds-wealth-distributed-you-may-be-higher-up?cid1=cust%2Fddnew%2Fn%2Fn%2Fn%2F20161123n%2Fowned%2Fn%2Fn%2Fnwl%2Fn%2Fn%2FNA%2F8198389%2Femail&etear=dailydispatch (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-28-16_TheEconomist-You_May_be_Higher_Up_the_Global_Wealth_Pyramid_than_You_Think-Footnote_5.pdf)
https://www.expatistan.com/cost-of-living/comparison/singapore/belgrade (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-28-16_Expatistan-Cost_of_Living_Index-Footnote_6.pdf)
https://www.brainyquote.com/quotes/quotes/r/richardbra414117.html

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November 21, 2016

The Markets

This time it’s the end. Really. Possibly.

It seems like experts have been forecasting the end of the bull market in bonds for years – and they have been doing so. In July 2010, bond guru Bill Gross predicted the 28-year bull market in bonds was near an end and, as interest rates moved higher, bond values would move lower. The Federal Reserve’s first round of quantitative easing had ended in March 2010, and he couldn’t know a second round, which would keep interest rates low, would begin in November 2010.

Since the U.S. election, investors have begun to favor stocks over bonds. Barron’s explained:

“BofA ML [Bank of America Merrill Lynch] said the weekly influx was the biggest into equities since December 2014. The outflows from bonds, meanwhile, was the largest since the taper tantrum of June 2013…The flight from bonds made for the biggest two-week loss in more than a quarter-century in the Bloomberg Barclays Global Aggregate Index, which fell some 4 percent, Bloomberg reports. The outflows from municipal and emerging market bond funds were especially acute, about $3 billion and $6.6 billion, respectively.”

The Wall Street Journal reported the yield on 10-year U.S. Treasuries finished last week at a 12-month high, after recording the biggest two-week gain in 15 years.

Will investors’ enthusiasm for U.S. stocks persist? Will this prove to be the end of the 35-year bull market in bonds? Stay tuned.

  

LOOKING FOR A GREAT GIFT? If you have friends or relations with young children, consider starting or contributing to a 529 College Savings Plan. It’s a great way to fund a future education and, let’s face it, really young children often enjoy the box and wrapping more than the gift.

So, if you want to give a child something they’ll always remember, starting a college fund may fit the bill. It’s a gift that may also benefit the parents. The College Board reported the average cost of tuition, fees, room, and board for in-state students attending a public four-year university is expected to be about $20,000 for the 2016-17 school year. At that rate, the average cost for four years of college would be about $80,000. Since two-thirds of students received financial aid during the 2014-15 school year, the following example estimates out-of-pocket college costs at $60,000.

Consider the cost of each option for this fictional family:

Borrowing to pay for college: The Smiths borrow $60,000 to pay for 18-year-old Joe Smith’s college tuition. The interest owed is 5 percent per year. Over the next 10 years, they repay the principal, plus about $16,400 in interest. By the time Joe is 28, and the loan is repaid, his undergraduate degree will have cost about $76,400.

Saving to pay for college: Alternatively, the Smiths could open a 529 Plan account for Joe Smith when he was born. If his family contributed $2,100 a year to the account and earned 5 percent each year, at age 18, Joe would have about $62,000 for college. His family would have contributed about $37,800 and earnings in the account would have contributed about $24,200.

The difference in the amount this fictional family would spend on college is about $38,600.

529 plans offer other advantages, too. Any earnings plan accounts grow federally tax-free, and distributions are tax-free as long as the money is used for qualified college expenses. Many states offer tax deductions or tax credits for 529 plan contributions, as well.

Any adult can open a 529 plan and fund it on behalf of a child. Once the account has been established, parents, grandparents, relatives, and friends can contribute. If you would like to learn more, contact your financial professional.

Weekly Focus – Think About It

“Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world.”
–Harriet Tubman, Civil rights activist

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* 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.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* 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.

Sources:
http://www.economist.com/news/business-and-finance/21621340-our-coverage-pimcos-ill-fated-decision-bet-bond-markets-bull-run-was-end-bill (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-21-16_TheEconomist-Bill_Gross_Last_Gambit-Footnote_1.pdf)
https://research.stlouisfed.org/pageone-economics/uploads/newsletter/2011/201104_ClassroomEdition.pdf
http://www.barrons.com/articles/has-the-trump-rally-gone-too-far-1479537624?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-21-16_Barrons-Has_the_Trump_Rally_Gone_Too_Far-Footnote_3.pdf)
http://www.wsj.com/articles/treasury-yields-retreat-from-11-month-high-1479483648?ru=yahoo?mod=yahoo_itp&yptr=yahoo (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-21-16_WSJ-Rout_in_US_Government_Bonds_Deepens-Footnote_4.pdf)
https://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2016-17
https://bigfuture.collegeboard.org/pay-for-college/financial-aid-101/financial-aid-faqs
http://www.finaid.org/calculators/loanpayments.phtml (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-21-16_FinAid-College_Loan_Calculator-Footnote_7.pdf)
http://www.moneychimp.com/calculator/compound_interest_calculator.htm (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-21-16_Moneychimp-Compound_Interest_Calculator-Footnote_8.pdf)
http://www.savingforcollege.com/intro_to_529s/name-the-top-7-benefits-of-529-plans.php
https://www.brainyquote.com/quotes/quotes/h/harriettub310306.html?src=t_change”

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November 14, 2016

The Markets

Surprise!

Markets were remarkably sanguine following the election of Donald Trump to the presidency of the United States.

There was a moment of panic. As election results rolled in on Tuesday, Gold prices rose and Treasury yields fell, as investors sought safe havens. Dow Futures, a measure of overnight sentiment, fell by 4 percent, and Standard & Poor’s 500 futures dropped 5 percent. (When index futures trade lower before the market opens, it is an indication investors expect the actual index to trade lower when the market opens.)

The losses triggered market circuit breakers, forcing investors to take a moment. They listened to President-elect Trump’s conciliatory acceptance speech, reassessed the political and economic landscape, and liked what they saw, according to Barron’s. Financial Times offered this assessment:

“Fear and loathing was the overriding sentiment of fund managers and analysts contemplating the market implications of an unlikely Donald Trump presidency…But when confronted by the reality of his election win, stock investors swiftly switched back to their more natural state of optimism, focusing on the prospect of growth-boosting stimulus, tax cuts and tax reform, and the rollback of industry-inhibiting regulation. Simultaneously, bad policies were dismissed as campaign rhetoric.”

Bond markets weren’t enthusiastic about the President-elect’s fiscal stimulus plans. Barron’s reported:

“The 30-year bond climbed 0.3 percentage point to 2.94 percent, resulting in a 6.3 percent decline in price. (Bond prices move inversely to yields.)…It wasn’t just Treasuries. Municipal bonds, corporate bonds, and preferred securities all fell. Bloomberg estimates $1 trillion in the value of bonds evaporated last week after the election.”

There was speculation Mr. Trump’s win would cause the Federal Reserve to delay the next rate hike. However, in a speech on Friday, Federal Reserve Vice Chairman Stanley Fisher said the Fed seems reasonably close to achieving its inflation and employment targets. “Accordingly, the case for removing accommodation gradually is quite strong, keeping in mind that the future is uncertain and that monetary policy is not on a preset course.” It appears rates may move higher in December.

  

IT’S JUST NOT EASY TO DO. Brexit came as a shock to many. So did the outcome of the U.S. election, but let’s face it – whether you’re trying to evaluate the potential of a company or the future of a country – predicting what may be ahead is never easy.

For instance, back in 1901, John Elfreth Watkins conferred with the “the wisest and most careful men in our greatest institutions of science and learning” to determine what might happen during the next 100 years. His predictions weren’t all accurate, but some were quite insightful:

“There will probably be from 350,000,000 to 500,000,000 people in America and its possessions…Nicaragua will ask for admission to our Union after the completion of the great canal. Mexico will be next. Europe, seeking more territory to the south of us, will cause many of the South and Central American republics to be voted into the Union by their own people.”

“The American will be taller by one to two inches. His increase in stature will result from better health, due to vast reforms in medicine sanitation, food, and athletics. He will live fifty years instead of thirty-five as at present – for he will reside in the suburbs.”

“Hot or cold air will be turned on from spigots to regulate the temperature of a house as we now turn on hot or cold water from spigots to regulate the temperature of the bath…”

“There will be no street cars in our large cities. All hurry traffic will be below or high above ground when brought within city limits…These underground or overhead streets will teem with capacious automobile passenger coaches and freight wagons, with cushioned wheels…Cities, therefore, will be free from all noises.”

“Wireless telephone and telegraph circuits will span the world. A husband in the middle of the Atlantic will be able to converse with his wife sitting in her boudoir in Chicago. We will be able to telephone to China quite as readily as we now talk from New York to Brooklyn.”

The future is always ripe with possibility.

Weekly Focus – Think About It

“Yesterday is not ours to recover, but tomorrow is ours to win or lose.”
–Lyndon B. Johnson, 36th President of the United States

 

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* 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.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* 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.

Sources:
1 http://www.foxbusiness.com/markets/2016/11/08/stock-futures-pare-losses-as-trump-wins-white-house.html
2 http://www.barrons.com/articles/trump-agenda-could-promote-economic-growth-1478931198?mod=BOL_hp_highlight_1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-14-16_Barrons-Trump_Agenda_Could_Promote_Economic_Growth-Footnote_2.pdf)
3 http://www.investopedia.com/ask/answers/146.asp
4 http://www.marketwatch.com/story/as-stock-futures-plunge-heres-what-it-takes-to-trigger-circuit-breakers-2016-11-09
5 https://www.ft.com/content/a606181e-a7fb-11e6-8b69-02899e8bd9d1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-14-16_FinancialTimes-Markets_Indulge_in_Make-Believe_Over_a_Trump_Presidency-Footnote_5.pdf)
6 http://www.barrons.com/articles/moves-to-make-as-the-bond-market-sinks-1478931249 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-14-16_Barrons-Moves_to_Make_as_the_Bond_Market_Sinks-Footnote_6.pdf)
7 https://www.federalreserve.gov/newsevents/speech/fischer20161111a.htm
8 https://upload.wikimedia.org/wikipedia/commons/0/0c/John_Elfreth_Watkins_Ladies_Home_Journal_Predictions_1900.jpg
9 https://www.brainyquote.com/quotes/quotes/l/lyndonbjo103549.html?src=t_positive

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November 7, 2016

The Markets

Markets hate uncertainty – and that may create opportunities.

Last week, investors experienced another bout of election jitters, and the Standard & Poor’s 500 (S&P 500) Index fell for the ninth straight session.

The CBOE Volatility Index (VIX), a.k.a. the fear gauge, which measures the expected volatility of the S&P 500 during the next 30 days, was up more than 40 percent for the week. The shift in the VIX reflected investors’ concerns about stock market performance after the election. Many think the next four weeks will offer a rough ride.

That may prove to be the case; however, all of the election hoopla and hyperbole has obscured some positive news. So far, the third quarter earnings season has been going well. According to FactSet, 85 percent of companies in the S&P 500 Index have reported earnings and the blended earnings growth rate for the Index is 2.7 percent. That means the S&P 500 Index is on track to experience its first quarter of earnings growth after five quarters of falling earnings.

A savvy portfolio manager or investor might wonder whether any of the companies with improving earnings have seen their share values decline because of election volatility and take time to evaluate whether any of those companies have become more attractive investments as a result.

If you’re too worried about the future of America to think about investment opportunities, it may help to remember the President of the United States doesn’t govern alone. An expert cited by Barron’s offered this insight:

“Regardless of who wins the White House…the new president will probably be playing between “the 40-yard lines” of the political gridiron against a Congress with at least one chamber controlled by the opposition. If both houses are held by the opposing party, the action probably could be stymied between “the 47-yard lines” – likely beyond even field-goal range to score any policy points.”

No matter how moving the election rhetoric, the next President may have a hard time getting much done.

 

WILL THE U.S. PRESIDENTIAL ELECTION MOVE THE STOCK MARKET? Elections often produce market volatility because markets hate uncertainty, and there is nothing certain about the outcome of the U.S. election. Election-induced volatility, however, often is relatively short-lived.

Remember, the downturn that followed the British vote to leave the European Union? Globally, markets lost about $3 trillion in two days following the late June vote. By the Fourth of July, many markets had recovered lost ground and made new gains, according to Financial Times.

So, what may happen after U.S. elections? Here are some thoughts:

“In the event of a very narrow Clinton win, it is all but guaranteed that Trump would claim the election had been “rigged” and would challenge the result via the courts. Civil disorder is also possible. Under those circumstances, the infamous 2000 election suggests that the uncertainty could persist for at least a month and could weigh heavily on the stock market during that time. It was not until December 12, more than a month after polling day, that a Supreme Court ruling effectively handed the 2000 election to George W. Bush.”
–Paul Ashworth, Capital Economics, cited by Barron’s

“After the silly season is over on November 8, about half the country will be elated and nearly half will be scared. And, both groups, research shows, are likely to tweak their investments accordingly. That’s when things really get risky. The key to your success this year is understanding that your emotional reaction to the election – not who actually wins it – is what truly matters.”
–Taylor Teppler, Time.com/Money

“Successful investors understand that markets are always moving, and there’s really no way to avoid the volatility that can come from uncertainty – even when it’s caused by a contentious political campaign. The trick is to create a portfolio that includes a diverse mix of assets and is based on your investing time frame and risk tolerance.”
–Schwab Survey: Investors Who Plan Don’t Fear Election Volatility

Markets may get bouncy following the election. That doesn’t change your long-term financial goals. If a portfolio review would help settle your election jitters, you may want to contact your financial professional.

Weekly Focus – Think About It

“The thing about democracy, beloveds, is that it is not neat, orderly, or quiet. It requires a certain relish for confusion.”
–Molly Ivins, American newspaper columnist

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* 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.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* 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.

Sources:
http://www.cnbc.com/2016/11/04/us-markets.html
http://www.investopedia.com/terms/v/vix.asp
https://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_11.4.16
http://www.barrons.com/articles/trades-big-role-in-the-presidential-election-1478322668?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-07-16_Barrons-Trades_Big_Role_in_the_Presidential_Election-Footnote_4.pdf)
https://www.ft.com/content/24124fe0-3d2e-11e6-9f2c-36b487ebd80a (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-07-16_FinancialTimes-How_Long_Does_the_Post-Brexit_Markets_Bounce_Last-Footnote_5.pdf)
https://www.ft.com/content/aa096aa6-7449-32d0-9673-3718b6d439b5 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-07-16_FinancialTimes-Stock_Markets_Continue_Post-Brexit_Recovery-Footnote_6.pdf)
http://blogs.barrons.com/stockstowatchtoday/2016/11/04/that-sinking-feeling-sp-500-drops-for-9th-day-longest-losing-streak-since-1980/
http://time.com/money/page/2016-presidential-election-clinton-trump-affect-finances/
http://www.schwab.com/insights/market-commentary/schwab-survey-investors-who-plan-dont-fear-election-volatility?cmp=em-QYB
http://www.brainyquote.com/quotes/quotes/m/mollyivins390530.html

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