April 1, 2013

We have had a good, productive, and profitable quarter. The S & P was up 6.61% and markets are close to their 2007 highs. I think the risks of the market (Europe, China, the Sequester, and now North Korea) are well known and are priced into the market and we will continue to be rewarded with reasonable returns. All the risks I mentioned while not good; make the US a more attractive place to be.

Our economy is recovering (housing, retail sales, and manufacturing are all up and it now appears that the oil/natural gas boom is actually going to make us energy independent a lot faster than anyone predicted. The recovering economy and the oil boom alone should make people more bullish. The sequester while painful to the area’s involved is a 2.3+/-% cut overall and even if you slice it to the military it is a 7.9+/-% cut there. I really have a hard time believing that we can’t cut from the military while preserving our “readiness”. Controlling our spending is now being done by the Sequester. While not reducing spending the way we should, it is helping solve the long-term debt problem. Corporate balance sheets are very solid and profits are almost twice what they were in 2000. There are actually parts of the market that are still “on sale”.

Soon we will be seeing inflation creeping into more than food. My health insurance cost just increased 20% and I was told to expect another 10% soon. For those of you on Medicare, get ready for Obamacare. The rates were withheld until after the election and as you may have already seen the per person rates for 2013 went up to $120.20 and are going to $247.00 in 2014. The Denver real estate market is another good example. There is very little supply and when something does get listed there are multiple full price offers. With this in our future there are two places to be Equities & Real Estate. I leave you with a few quotes from the 1800’s.

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money” —-Alexis de Tocqueville, “Democracy in America.

Let wealth come in by comely thrift,
And not by any sordid shift;
‘Tis haste
Makes waste;
Who gripes too hard the dry and slipp’ry sand,
Holds none at all, or little, in his hand.—-Robert Herrick

As usual we thank you for your business and trust you place with us.


Willis Ashby, CFP®

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