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Follow on Google News | 3rd Quarter, 2015 Review: Madison Middleton Investment ServicesKeeping customers informed on important aspects of money management, trends, and factors that influence their portfolios is key to any investment advisor service.
By: Googins Advisors Inc Madison's Investment Advisor THE MARKET The market is not overpriced, nor underpriced; THE FED AND INTEREST RATE The Fed should “just get it over” and increase the interest rate! The market expects a rate increase and has “factored it” in - adding to the reasons the market has stagnated for several months. Low interest rates are no longer stimulating the economy; the Federal Reserve effectively froze interest rates by offering banks interest on their reserves beginning Fall of 2008; the interest margin on loans is not sufficiently greater to encourage them to aggressively make loans. The QE money the Federal Reserve pushed into the economy is sitting on the sidelines in banks’ reserves. And corporations continue to hold large amounts of cash waiting for greater business opportunities. Regulations and income taxes are damping corporations’ CHINA…GREECE… The U.S.’s biggest trading partners are Canada and Mexico, not China or Greece. China’s economy increased by 150% the twelve months leading up to June, 2015. Then it dropped about 40% - a logical drop even if China’s market is a controlled market and the outside world suspects the rate of growth is less than China has advertised. China’s economy makes up 15% of the world GDP, more significant to trading partners Japan, Europe, Australia and Brazil than the U.S. MARKET TURMOIL “Remember that the majority of market returns occur in a small minority of days and that the big return days tend to be unpredictable and hot on the heels of awful news. Whether you are active-or passive-biased, it almost never makes sense to leave the equity markets entirely.” Daniel Crosby, president, IncBlot Behavioral Finance. OIL The U.S. shale industry has changed the game for traditional OPEC competitors. Contrary to the large, slow moving, state-owned foreign oil companies, the U.S. is comprised of small, nimble, innovative, capital market-linked companies. In the U.S. it takes about 77 companies to produce 75% of U.S. crude oil output, whereas nearly 100% of foreign output comes from solely state-owned companies in Saudi Arabia, Mexico, Iran, and Kuwait. The fragmentation of the U.S. shale industry means OPEC ministers have no U.S. shale oil minister to call and negotiate output. The oil industry can no longer be controlled by a sole foreign entity flooding the market with supply to squeeze out the small players. (J. Derek Lewis & Associates, Inc. Newsletter) SNOW BIRDS Did you know you can change your address and renew your expiring forwarding address by visiting USPS's website. TRADING VOLUME The market has made wide swings recently, but the trading volume has been less than average. It seems the consensus to sell or buy is low. PLEASE CALL - Any questions or concerns or to set up a time to review your accounts. Sincerely, Louise Googins Karl Kuelthau Andy Yadro Learn more: http://www.googins.com/ End
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