July 1, 2010

It’s not over till it’s over. That saying certainly is true this last quarter. The last day sent the markets down to finish the quarter with the S & P 500 and NASDAQ down 12 % and the DOW down 10%. The “Flash Crash” on May 6th is still being studied to figure out what exactly happened. To remind you that was the day I went to lunch and while I was out the market dropped almost 1,000 points and recovered 880. I’m happy I was at lunch. The Federal stimulus is turning into a mixed bag. Our national debt is now $12,971,061,397,832.00 (call it 13 Trillion) and growing fast. We are spending money which will need to be paid back by us to try to grow the economy. The problem is best illustrated by the housing tax credit which expired in May. Builders broke ground on 300,000 new homes a fall of 33% to the lowest on record. It appears we are spending money to prop a sector up but when we stop it falls back down and we now have to pay the principle and interest on the money we spent with little lasting result. I have painted a dark picture so let’s look at the bright side of things. We most likely will not drop into a “double dip” recession and this presents potential equity buying opportunities and should keep inflation at bay for quite a while. Interest rates are at rock bottom and it is the best time in 50 years to refinance your home. Our value investing style is being proven to be a wise way to go. Stocks are becoming cheap and a lot of them are paying a nice dividend which is better than any CD or annuity currently on the market. The Chinese are letting their currency, the Yuan, rise in value which will help our deficit and manufacturing.  There are lots of scary things going on but we will figure out how to best fix them.

Some good news for people who do not work with firms like Integra: There is talk that they may get some relief that they likely don’t know they need. Mainly that they are working for people who have their own best interest at heart not the investors. Deputy Treasury Secretary Neal Wolin was quoted “We believe that retail brokers offering investment advice should be held to the same fiduciary standard of care as investment advisors, (they must do what’s best for the client not themselves) and we will work to include that provision in the final bill, “Clients receiving investment advice don’t distinguish between broker-dealers and investment advisors, and neither should the law.”

It is with much regret that I inform you that my Assistant, Eileen Lovenstein has accepted a new position with her former boss that “she just couldn’t refuse” and has left my employment.  Eileen asked me to please tell our clients that she “has enjoyed getting to know you, working with you, and will miss you!”  She “wishes you all good health and good wealth” and wants you to know that she is “grateful for the experience of working at Integra Financial, Inc. and especially with Mr. Willis Ashby.” I am very pleased to introduce Kathy Patton, she has 20 years of experience and has a level of technical expertise which is needed in our current environment. I hope you welcome her when you meet her as she is looking forward to getting to know all of you in the near future.

Yours truly,


Willis Ashby, CFP®

Information for this came from the following sources: Wall Street Journal; FPA SmartBrief; Morningstar Investment Services; Toyota Annual Report; Integra Financial 

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