The U. S. equity markets are near or at record levels and have been quite resilient despite the pessimistic news headlines. Our country is currently experiencing strong consumer confidence and investor optimism, and there’s an expectation of future tax reform and foreign earnings repatriation, despite the negative headlines both economically and politically.

It appears to be human nature, however, to become pessimistic as we age.  In an annual survey between

2002 and 2013, a majority of Americans age 65 and older did not believe the US stock Market would

rise in the upcoming year.  The US stock market as measured by the S&P 500® was up ten of those twelve years (down in 2002 and 2008), gaining +105% in total return for an average of +6.2% per year. (source: University of Michigan, as reported in By The Numbers 05-29-17)

If your investment objectives or financial circumstances have changed over time, market tops would be the best times to make alterations, not market bottoms when emotions might run high. We are available if you would like to meet and review your accounts to confirm your holdings remain aligned with your current investment objectives.

Don’t forget, you are invited to our Lunch and Learn presentation the 4th Tuesday of every month at the Gaslight Music Hall in Oro Valley from noon to 1pm.  We also host Eat and Educate presentations the 3rd Thursday of every month at 5:30 pm at the Red Lion Inn & Suites near Ina and Oracle.

We are happy to announce that Lacey is back from maternity leave and Kataya Plett, the Temp we hired to assist in Lacey’s absence, is now a full-time employee at Southwest Investment Advisors.  In addition, we have a summer intern helping in the office, Bart’s nephew Brett Manor, who is majoring in Financial Planning at NAU.

As always, thank you for your business and referrals.

As the first quarter of 2017 comes to an end it is interesting to note that last year’s winners and losers are trading places.  The MSCI International Index finished 2016 down 1.88% but is up this year 7.87% and leading the charge.  Last year’s winner, the Russell Mid/Small Value Index, is second to last this year among the indices we follow at -3.67%.  The S&P Large Cap Growth Index, which was in the bottom half last year, is in the top half this year.  And so it goes.

The bottom line, once again, is that it’s very hard to choose the winners and losers.  Maintaining a diversified portfolio and rebalancing annually is still the optimal method for managing a portfolio over time.

We are pleased to introduce Chris Johnson, who has moved his family from De Kalb, Illinois to join our Team as our newest Investment Advisor.  Chris and his lovely wife Raina have four children and a dog.  Welcome aboard, Chris and family.  Enjoy the sunshine!

Please join us for our monthly Lunch & Learn on the 4th Tuesday every month at noon at the Gaslight Music Hall in Oro Valley and/or our Eat & Educate the third Thursday evening at 5:30pm each month at the Red Lion Inn & Suites near Ina and Oracle.

And finally, please save the date for the afternoon of Sunday, May 7th.  We are having a “Luau in the Desert” at Catalina State Park.  More information to come.  Please call Alison to R.S.V.P. 544-2500.

2017 experienced the first positive January in three years, so it was a good start. We are hopeful and optimistic that the equity markets have plenty of upside potential. In the end it will come down to earnings.  As the chart demonstrates, after two years of stagnant earnings, the S&P500 earnings are finally improving.  Many pundits believe the recent rally in equity markets is directly related to President Trump’s pledge to lower corporate tax rates. Lower corporate taxes would be reflected in even stronger earnings, and thus a stronger market.

Earnings

As a reminder, if you need help deciding on when to take your Social Security benefits, we are here to assist you.

Also, on February 16th as on each third Thursday, is our next Eat & Educate evening educational series at the Red Lion Inn & Suites at Ina and Oracle beginning at 5:30pm. Our Lunch & Learn series continues on February 28th as on each fourth Tuesday, at the Gaslight Music Hall in Oro Valley at 12:00pm.

Lacey will be on maternity leave beginning sometime in March and is expecting her second child, a baby girl. Of course Stephanie and Alison will be happy to assist you as always. Rob will be performing at the Gaslight Music Hall on February 28th (Fat Tuesday) with the Wildcat Jazz Band.  It’s a Mardi Gras Celebration also featuring professional ballroom dancers.

Aloha!  Please hold the date of May 7th.  We will be having a Luau in the Desert at Catalina State Park for our Spring Client Appreciation Event with pulled pork, Hawaiian music and various beverages.

Thank you for your business and referrals.  And please do us a favor and “like us” on Facebook.  Thanks.

Facebook

Happy New Year!  What a year 2016 was.  The stock market began the year in a downward spiral in the first quarter, falling about 13% from the previous high, then it came back despite stagnant corporate earnings and rallied into the year-end.  Small and Mid-Cap stocks led the way domestically while international equities and high grade bonds lagged.

So what now?  There will likely be some pullbacks along the way; however, we expect the bull market to continue as a recession seems nowhere in sight.  The consumer confidence readings were at a 13-year high at the end of 2016, which raises the likelihood that both businesses and consumers will spend money.  However, we believe what happens in Washington will be closely watched by investors anxious to see if Donald Trump and Congress are able to come through with various campaign promises, such as lower corporate taxes, reduced governmental regulation, repatriation of corporate profits, and the replacement of the Affordable Care Act.

Just a reminder: you have until April 17th to make IRA contributions for 2016.

Something new: Beginning this month on January 19th we will be hosting an evening workshop on every third Thursday of the month. The workshop will be from 5:00-6:30pm at The Red Lion Inn & Suites near Oracle and Ina.

And continuing:  We will restart our Lunch-and-Learn series at the Gaslight Music Hall in Oro Valley on the fourth Tuesday of every month, beginning January 24th at noon.   Speaking of the Gaslight Music Hall, our own Rob Wright will be performing with the Wildcat Jazz Band on February 28th for a Mardi Gras Celebration!

We Wish You A Merry Christmas And A Happy New Year!

And if you are in Tucson, please join us for a holiday wine tasting and art viewing party, December 18th from 1:00pm to 4:00pm at Madaras Art Gallery

Located at 3035 North Swan Road, Tucson AZ 85712

As we have in the past, we will be collecting unwrapped gifts for the women and children at the Gospel Rescue Mission (children ages infant to 14).

They are always grateful for your generosity.

Because space is limited we will have two shifts beginning at 1:00pm and 2:30pm.

Please RSVP with your number of guests and shift preference

to Alison at 520 544-2500.

Thank you for your continued trust, loyalty and friendship.

With the elections nearing we would not be surprised to see volatility in the financial markets.  With now six straight quarters of disappointing earnings, the markets have been surprisingly resilient.  Adding the uncertainty of the elections, the market has already discounted each outcome, regardless of who wins, which gives us hope for a strong year-end.   Only time will tell!

We are pleased to report many happy and healthy babies were born to the SIA Team this year; Stephanie’s son Nolan was born January 10th, Mary’s daughter Brielle was born on January 21st and Alix’s son Logan was born on April 17th.  And congratulations to Lacey who is expecting her second child in March of 2017. (Don’t drink the water!)

On a sad note, after 22 years in the business, Tom Cariseo is retiring from our industry.  Best wishes, Tom, we will miss you.

Please welcome our newest team member, Jesse Montoy, who is studying diligently for the Series 7 exam to become our next Advisor.

Did you know: Almost 70% of people turning age 65 will need long-term care at some point in their lives? According to the US Department of Health and Human Services, women need long term care longer (3.7 years) than men (2.2 years) and one-third of today’s 65-year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years.  If you don’t have a Long Term Care Plan in place, we can offer you a solution and would be happy to start the conversation.

As always, we appreciate your business and referrals. If you think there is anyone who can benefit from our experience and services we have provided to you, please have them contact us as we are happy to help!

And finally, Save the Date: December 18, 2016 will be our Annual Christmas Party.

The second half of 2016 finds us at or near all-time stock market highs in spite of a corporate earnings recession and the infamous Brexit.  How can this be?  We must remember that the stock market reflects investor attitudes regarding future earnings, not the past.  We believe that the market is telling us that investors are anticipating stronger earnings in the second half of 2016 and even better possibilities for 2017.  Although not over-priced, our stock market is somewhat buoyed by the fact that internationally, our markets look attractive when compared to most foreign markets. 

We continue to monitor the performance of our investment choices and have begun to incorporate some exchange traded funds with strong track records relative to more actively managed funds.   As always, we strive to stay on top of the latest industry trends, products and services.

In other news, the Securities and Exchange Commission (SEC) has amended rules on non-government money market funds, giving them the option of imposing redemption fees and limiting redemptions.  As a result, on or about September 17th we will be exchanging your current money market fund into one investing in US Government securities.  There are no other changes as these money market funds continue to offer the same sweep feature that you currently enjoy by automatically investing any uninvested cash as well as offering daily liquidity and use of your checkbook, if you have one.  We will process this transaction; you do not need to take any action.

In our last letter we mentioned that Alix would be out for a while on maternity leave.  Well, we are pleased to announce the arrival of Logan Marshall Kusler, born April 17th! Mother and child are doing great and Alix is back at work.

Thank you for your business and referrals and have a great rest of the summer.

Certain statements contained within are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives.  Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.   The opinions voiced are for general information only.  They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC.  To determine which investments may be appropriate for you, consult with your financial professional.  Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.  Investment in stocks will fluctuate with changes in market conditions and indices are unmanaged measures of market conditions.  It is not possible to invest directly in an index.  Past performance does not guarantee future results.

The all-time highs in the equity markets were in May of 2015, just over a year ago. The chart below demonstrates that over the past eighteen months the market as measured by the S&P has gone essentially nowhere, with two secondary reactions disrupting an otherwise sideways movement within this Bull Market.

d
Trouble in China, Oil prices dropping to below $30 a barrel, and what some are calling an earning recession for Corporate America have been some strong headwinds. Additionally, we have not come across anybody happy with the political scene! The major positives are improvement in the employment numbers and a better real estate market. So as usual, the world is a very confusing place in which to live!
No wonder it is so easy for investors to lose sight of the forest through the trees. That is why we are conducting our monthly Lunch and Learn workshops at the new Gaslight Music Hall at 13005 N. Oracle Road in Oro Valley. The workshops are held on the fourth Tuesday of each month at noon, lunch is on us. The next Lunch and Learn will be June 28th. Please join us and bring a guest. RSVP to Alison at 520 544-2500. Have a safe and happy summer and thank you for your business and referrals.

Our last correspondence on February 11th turned out to be the day of the most recent market bottom.  Since that time the major indices have recovered significantly, about 12.5%, and although the first quarter of 2016 may end up rather flat, it certainly took a volatile path to get there.  At this juncture we do not believe a recession is looming in the near future.

The February and March Lunch and Learn workshops at the new Gaslight Music Hall in Oro Valley were well received, and if you are in town we hope to see you at our next one on April 26th from 12:00pm to 1:30pm.  This month’s topic is Turbulence, Perspective and Opportunity.  Lunch will be provided.

We are bringing back one of our most popular client events in two weeks on April 17th.  Please join us for the Arizona vs. Stanford baseball game at Hi-Corbett field.  The game begins at 1:00pm so we will be serving hot dogs and beverages beginning at 12:00pm.  As always we encourage you to bring guests to any and all of our client appreciation events.  Also, please note that the UofA has instituted a “clear bag” policy at all events.   RSVP to Alison at 520 544-2500 and Bear Down!

You most likely won’t be seeing Alix at this event as she is due to have her first child in the coming weeks, making this the third child born into the Southwest Investment Advisors family in 2016!

As always thank you for your business and referrals.

Certain statements contained within are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives.  Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.   The opinions voiced are for general information only.  They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC.  To determine which investments may be appropriate for you, consult with your financial professional.  Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.  Investment in stocks will fluctuate with changes in market conditions and indices are unmanaged measures of market conditions it is not possible to invest directly in an index.  Past performance does not guarantee future results.

We are beginning to receive some calls of concern due to recent market pullbacks so we are reaching out with, hopefully, the voice of reason.  As you know we have been advising investors for decades and it has never been our strategy to sell in falling markets.   This time is no different.  We expect that if this correction turns out to be a bear market it will be relatively brief and followed by a great bull run.

No one knows where the market will reach the bottom, but we do know that it is down greater than 14% from the highs last May.  As we rebalance portfolios we will most likely be reducing fixed income in favor of equities wherever appropriate.  Buy low, sell high!

For investors seeking income, we do not anticipate interruptions to income streams, therefore, no reason for panic.  It’s never fun, but pullbacks are part of investing and not out of the ordinary.

Thank you for your business and referrals.

Certain statements contained within are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives.  Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.   The opinions voiced are for general information only.  They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC.  To determine which investments may be appropriate for you, consult with your financial professional.  Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.  Investment in stocks will fluctuate with changes in market conditions and indices are unmanaged measures of market conditions it is not possible to invest directly in an index.  Past performance does not guarantee future results.