Market Week: March 31, 2015

March 31st, 2015

The Markets

An uptick in equities on Friday couldn’t overcome the four-day downdraft across the board that preceded it. Whether the slump was caused by weak economic data, a fresh outbreak of Middle East conflict, a discouraging report about corporate profits, or simple profit-taking after the previous week’s strength, it left the S&P 500 a whisker away from flat for the year and wiped out all year-to-date gains for the Dow industrials. Military action in Yemen, a country situated at a key chokepoint for Middle Eastern oil shipments, was seen as a potential threat to supplies and fueled a bounce in the price of oil. However, anxiety about equities didn’t translate into gains for the benchmark 10-year U.S. Treasury note, which remained relatively stable. Gold built on the upswing that began the previous week; it has now gained roughly $50 an ounce in a little less than two weeks.

Market/Index

2014 Close

Prior Week

As of 3/27

Weekly Change

YTD Change

DJIA

17823.07

18127.65

17712.66

-2.29%

-.62%

Nasdaq

4736.05

5026.42

4891.22

-2.69%

3.28%

S&P 500

2058.90

2108.10

2061.02

-2.23%

.10%

Russell 2000

1204.70

1266.37

1240.41

-2.05%

2.96%

Global Dow

2501.66

2566.23

2520.49

-1.78%

.75%

Fed. Funds

.25%

.25%

.25%

0%

0%

10-year Treasuries

2.17%

1.93%

1.95%

2 bps

-22 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

· The Bureau of Economic Analysis’s final figures confirmed that U.S. growth slowed in 2014’s final quarter, dropping from 5% in Q3 to 2.2%. That meant GDP increased 2.4% over all of 2014. The 4.4% increase in consumer spending was the biggest quarterly gain since the first quarter of 2006, but a 12.2% decline in federal defense spending and a 10.4% increase in imports helped offset it. Meanwhile, a 1.6% drop in the quarter’s after-tax corporate profits (adjusted for inventories and capital consumption) contributed to an 8.3% annual decline for 2014–the worst year for profits since 2008.

· A 1.4% drop in February durable goods orders–the third decline in the last four months–confirmed a winter slowdown in the economy, according to the Commerce Department. Just as troubling was a 2.6% slump in business spending on capital equipment.

· Fed Chair Janet Yellen confirmed that although the Fed’s key interest rate is unlikely to remain near zero for the rest of the year, any increases will probably be very gradual. She cited a number of factors that could keep rate hikes moderate, including the strong dollar, low inflation, and examples of countries abroad who suffered from raising rates prematurely.

· Sales of existing homes rose in February, and ongoing low inventories of homes for sale pushed prices up once again. According to the National Association of Realtors®, February’s 1.2% increase put home resales 4.7% ahead of a year earlier. Meanwhile, the $202,600 median home sales price represented a 7.5% gain over the last 12 months, while the housing inventory is half a percent lower than a year ago.

· New home sales also were up by 7.8% in February, and the January figure was revised upward. The Commerce Department said that put sales almost 25% higher than last February, and the 539,000 annual sales rate for new single-family homes hasn’t been that high since February 2008.

· After three months of falling consumer prices, consumer inflation turned up 0.2% in February. The Bureau of Labor Statistics said energy, food, and housing costs all contributed to the monthly increase, which left the inflation rate over the last 12 months essentially flat.

· Greek government officials met with major international creditors to try to ensure that more detailed plans for economic reform will be sufficient to qualify for the next round of bailout funds from its major international creditors, which would help with a €460 million payment to the International Monetary Fund that is due on April 9. Meanwhile, Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel struck a conciliatory tone after a one-on-one meeting in Berlin.

Eye on the Week Ahead

U.S. and Chinese manufacturing data and Friday’s U.S. unemployment report are likely to be the highlights of the holiday-shortened week as the Q1 earnings season approaches. Overseas, the Yemen situation and any initial reactions to Greece’s economic proposals will be monitored.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

Market Week: March 17, 2015

March 17th, 2015

The Markets

Bulls and bears duked it out last week, with the Dow experiencing multiple triple-digit intraday swings. In the end, the bears prevailed as the Dow and S&P 500 had their third straight week of losses, which sent both back into negative territory for the year. The dollar continued to gain strength, hitting $1.06 against the euro (its highest level since January 2003), while the price of oil, which had been above $50 a barrel at the beginning of the month, fell to roughly $45. Coupled with the start of quantitative easing by the European Central Bank, that raised concerns about how U.S. multinational companies’ sales overseas would fare going forward. The small caps of the Russell 2000, which are seen as having less international exposure, had the week’s only gains.

Market/Index

2014 Close

Prior Week

As of 3/13

Weekly Change

YTD Change

DJIA

17823.07

17856.78

17749.31

-.60%

-.41%

Nasdaq

4736.05

4927.37

4871.76

-1.13%

2.87%

S&P 500

2058.90

2071.26

2053.40

-.86%

-.27%

Russell 2000

1204.70

1217.52

1232.14

1.20%

2.28%

Global Dow

2501.66

2530.74

2488.94

-1.65%

-.51%

Fed. Funds

.25%

.25%

.25%

0%

0%

10-year Treasuries

2.17%

2.24%

2.13%

-11 bps

-4 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

· Wholesale prices in the United States fell 0.5% in February, mostly because of the eighth straight monthly decline in costs for final-demand goods such as fuel/lubricants, machinery/equipment, and apparel. The Bureau of Labor Statistics said wholesale prices overall have now fallen 0.6% over the last 12 months.

· Retail sales fell for the third straight month as February’s harsh winter weather helped cut spending by 0.6%. The Commerce Department said declines were seen in virtually all segments of the retail sector. However, retail sales as a whole were 1.7% ahead of February 2014.

· Job openings (sometimes seen as a proxy for workers’ willingness to risk changing jobs) continued to rise, reaching 5 million in January. The Bureau of Labor Statistics said openings have now risen above their March 2007 peak. The number of people quitting their jobs in January was 3% higher than in December, according to the BLS’s Job Openings and Labor Turnover Survey, and has now increased 17% over the last year.

·
The recent slight bump in oil prices is probably temporary, according to the International Energy Agency’s monthly report. The IEA warned that increased U.S. oil production could soon exceed storage capacity, which could renew downward pressure on prices. Financial markets have been concerned that falling oil prices might hit energy stocks hard and lead to production cutbacks and layoffs. While that might help stabilize oil prices, it could take a toll on the rest of the economy as well as stock indices that include a large energy component.

Eye on the Week Ahead

All eyes will be on the statement to be issued Wednesday by the Federal Open Market Committee. Any change in language–for example, not continuing to say that the committee will be “patient” about interest rates–could unleash more speculation about a June rate hike. Conversely, retention of the p-word might fuel speculation about a possible delay.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

Market Week: March 11, 2015

March 11th, 2015

The Markets

Good news about unemployment proved bad news for the equities markets. The Dow industrials closed 279 points lower after Friday’s strong jobs report as investors feared it might help hasten the end of the Fed’s near-zero target interest rate. Nevertheless, the Nasdaq topped 5,000 earlier in the week for the first time since March 2000. The strengthening of the U.S. dollar in the wake of Thursday’s European Central Bank meeting took a toll not only on the euro but on gold and oil; gold fell to $1,164–its lowest price of the year–while oil dipped below $50 a barrel. Meanwhile, the benchmark 10-year Treasury yield shot to its highest level of the year as prices fell.

Market/Index

2014 Close

Prior Week

As of 3/6

Weekly Change

YTD Change

DJIA

17823.07

18132.70

17856.78

-1.52%

.19%

Nasdaq

4736.05

4963.53

4927.37

-.73%

4.04%

S&P 500

2058.90

2104.50

2071.26

-1.58%

.60%

Russell 2000

1204.70

1233.37

1217.52

-1.29%

1.06%

Global Dow

2501.66

2581.89

2530.74

-1.98%

1.16%

Fed. Funds

.25%

.25%

.25%

0%

0%

10-year Treasuries

2.17%

2.03%

2.24%

21 bps

7 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

· The U.S. economy added 295,000 jobs in February, which helped cut the unemployment rate from 5.7% to 5.5%. The Department of Labor said February’s job growth exceeded the 266,000 monthly average for the last year. Hourly wages were up 2% from a year earlier.

· The European Central Bank raised its forecast for economic growth this year from 1% to 1.5%, and from 1.5% in 2016 to 1.9%. Following the ECB meeting, the euro fell to $1.08 against the U.S. dollar, its lowest level since fall 2003. The ECB begins monthly purchases of €60 billion of bonds this week.

· China cut its growth forecast for 2015 to 7%; Premier Li Keqiang cited underutilization of manufacturing capacity, slowing investment growth, potential deflation, and the need for increased public spending on social services. Though most developed economies would be thrilled with 7% growth, it’s lower than 2014’s 7.4% increase.

·
The U.S. economy seemed to survive the winter-weather onslaught reasonably well, as the Federal Reserve’s anecdotal “beige book” report showed economic expansion in most of the Fed’s 12 districts between early January and mid-February. Consumer spending was said to have improved since the previous report, while manufacturing increases were spottier.

· In the fifth round of stress tests for the nation’s largest banks, the Federal Reserve said all 31 banks tested demonstrated that they had the ability to survive a series of simultaneous financial pressures, such as a sudden sharp increase in unemployment, a housing market collapse, and a crash on Wall Street.

· Apple will replace telecommunications company AT&T as one of the 30 stocks in the Dow Jones Industrial Average. According to S&P Dow Jones Indices, the March 18 change in the price-weighted index was made to help offset a four-for-one split in Visa, another Dow stock, which otherwise would have substantially affected the index’s weighting of the information technology sector.

· Americans’ personal income was up 0.4% in February, according to the Bureau of Economic Analysis; even on an inflation-adjusted basis, income was up 0.9%. Meanwhile, lower gas prices helped cut consumer expenditures by 0.2% during the month.

· Growth in the U.S. services sector continued to accelerate, according to the Institute for Supply Management’s February survey. The 56.9% reading was 0.2% higher than in January and represented the 61st straight month of growth. However, the ISM’s corresponding survey of manufacturers showed a 0.6% decline from January’s 53.5%.

· Construction spending rose 1.1% in January and was 1.8% higher than a year earlier. Private construction was up 0.5%, with commercial construction responsible for the largest share of the increase.

Eye on the Week Ahead

Investors will watch to see if last week’s jitters about a midyear rate increase continue as the March 17-18 Federal Open Market Committee meeting gets closer. The Job Openings and Labor Turnover Survey (JOLTS) could reinforce Friday’s strong unemployment data.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

2014: The Year of the Mighty Dollar

March 8th, 2015

2014 makes the second consecutive year that US stocks, as measured by the S&P 500, have markedly outperformed foreign markets. Last year, the S&P 500 rose +13.6%1, while non-US equities (as measured the MSCI ACWI ex-US index or “ACWX”) actually fell –3.9%2. The disparity was almost as great in 2013: +28.7% for the S&P 500 and +14.8% for the ACWX.

Will 2015 make it three in a row? We’ll know for sure on Dec. 31, but there’s already reason to think it won’t. So far this year (through Feb. 27), the S&P 500 is up +2.6%, but the ACWX has already risen +5.2%. This difference is even more impressive than it looks, as we’ll explain below. Bottom line, don’t expect the US to outperform the rest of the world every year; historically, it’s done so only about half the time, meaning non-US stocks did better the other half.3

What’s driving the relative performance of global markets? Certainly the sharp drop in the price of oil during the second half of 2014 significantly affected energy stocks and oil exporting nations. We went into detail about the oil situation in our previous newsletter, including how we recommend positioning your portfolio in light of oil’s price drop. For today’s newsletter, just keep in mind that oil prices have far-reaching effects on global markets.

It’s the dollar, stupid

If you look only at the dollar-based performance numbers (+13.6% in the S&P 500, –3.9% for the rest of the world) you might conclude that US companies drastically outperformed their foreign counterparts. (The graph below clearly shows this striking difference in performance.) But—you would be less correct than you think.

Performance of US stocks vs. non-US stocks in US dollars 2014.2

When you invest in the ACWX or in individual foreign securities, you are using US dollars to purchase non-US companies that do business in—and are traded in—a variety of other currencies. These currencies regularly fluctuate in value against the US dollar, which in turn affects the performance of these non-dollar investments. A strengthening dollar—all things equal—hurts the performance of non-dollar investments, while a weakening dollar helps them. And recently, the dollar has been strengthening.

Removing the US dollar from the equation

The US dollar rose markedly against most other currencies during the second half of 2014 (not coincidentally, while oil prices were dropping). However, relative currency movements are rarely a one-way street; instead, valuations tend to revert to their long-term averages. Having established that foreign currency fluctuations affect the value of US dollar-denominated foreign investments, let’s re-evaluate the US market’s performance in 2014 against the rest of the world.

The most direct way to do this is to look at non-US returns in local currencies: instead of buying the foreign securities using US dollars, we pretend to buy them in the local currency of each country. (We say “pretend” because you can’t actually do this unless you first convert your dollars to each country’s currency, but then, of course, you have to convert them back in order to spend them here.) The graph below shows the performance of US stocks vs. non-US stocks in local currencies:

Performance of US stocks vs. non-US stocks in local currency 2014.

As you can see above, the US still outperformed, but by a far smaller margin: in local currency terms, the ACWX rose +6.1% vs. the US’s increase of +13.9%. Thus, if you extract the effects of currency fluctuations, the US only beat the rest of the world by 7.8%, not the 17.5% margin that occurs if one measures all returns in US dollars. The 9.7% difference between these two margins is roughly equal to the amount by which the US dollar strengthened during the year.

Notice in both the above charts that US and foreign securities performed very similarly until about midyear, when the US took the lead. This corresponds almost exactly to when the US dollar began its surge against most foreign currencies, as the chart below shows:

US Dollar index (value of the dollar relative to a basket of foreign currencies), 1 year through 2/20/154.

As stated in the second paragraph above, we noted that 2015’s outperformance by non-US stocks has been even more impressive that it appears. You can see the reason in the graph above: foreign stocks outperformed the US during January despite a continuation of the dollar’s rise, when it appreciated another +5%. In fact, in local currency terms, non-US stocks have risen 8.3% so far this year, compared with a far more modest +2.6% for the US.5

KCS Wealth Advisory’s investment strategy for 2015

As we’ve said, both equity market returns and currencies typically revert back to their long-term averages; thus, the recent strength of the US stock market and the dollar may well be temporary. At the same time, you shouldn’t be betting on a weakening US dollar or a falling US stock market, as this would be market timing, which you should know by now is a fool’s game.

At the end of the day, your main concern should be how many US dollars you have to spend, as the bulk of your spending over the years will be in our own currency. But that doesn’t mean you should only invest in the US: half the world’s investable companies are outside this country, meaning that a truly diversified portfolio includes a hefty helping of foreign securities. And as we stated above, foreign securities outperform the US market about half the time, often by a lot, adding the chance for better performance to your diversification benefits.

For 2015, we at KCS are becoming more selective in our US stock picks, and looking for opportunities overseas in countries with accommodative monetary policies, favorable demographics, attractive valuations and/or that will benefit from lower oil prices. In future newsletters, we’ll discuss these and other issues in more detail.

Until next time,

Dr. Ken Waltzer, MD, MPH, AIF®, CFA, CFP®

Managing Director, KCS Wealth Advisory

Laura Gilman, CFP®, PFP, MBA

Managing Director, KCS Wealth Advisory

Adam Bragman

Director of Investment Research, KCS Wealth Advisory

[1] http://finance.yahoo.com/q/hp?s=IVV&a=11&b=31&c=2013&d=11&e=31&f=2014&g=d

[2] http://www.msci.com/products/indexes/country_and_regional/all_market/msci_index_performance.html

[3] https://www2.blackrock.com/webcore/litService/search/getDocument.seam?contentId=23753

[4] http://www.bloomberg.com/quote/UUP:US

[5] http://www.msci.com/products/indexes/country_and_regional/all_market/msci_index_performance.html

KCS Wealth Advisory is a registered investment adviser. Our services include discretionary management of individual and institutional investment accounts, along with personalized financial, estate and tax planning services.

Market Week: March 3, 2015

March 3rd, 2015

The Markets

Equities markets were mildly buoyed by Federal Reserve Chair Janet Yellen’s congressional testimony and the grudging approval of Greece’s plans for qualifying for additional assistance. The S&P 500 and Russell 2000 hit new record highs during the week. However, both had backed away from those highs by week’s end after U.S. economic growth was shown to be weaker than expected.

Market/Index

2014 Close

Prior Week

As of 2/27

Weekly Change

YTD Change

DJIA

17823.07

18140.44

18132.70

-.04%

1.74%

Nasdaq

4736.05

4955.97

4963.53

.15%

4.80%

S&P 500

2058.90

2110.30

2104.50

-.27%

2.21%

Russell 2000

1204.70

1231.79

1233.37

.13%

2.38%

Global Dow

2501.66

2579.92

2581.89

.08%

3.21%

Fed. Funds

.25%

.25%

.25%

0%

0%

10-year Treasuries

2.17%

2.13%

2.03%

-10 bps

-14 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Headlines

· In her semiannual testimony before Congress, Federal Chair Janet Yellen continued to lay the groundwork for a rate increase later this year without spelling out when that might happen. Emphasizing continued domestic economic progress, she said that even once language about “patience” disappears from Fed statements, a rate increase would likely not occur for at least two meetings. If that language change occurred at the March meeting, that would mean an increase would be unlikely before June.

· Two of Greece’s key creditors essentially told the financially stressed country to “put up or shut up.” The heads of the International Monetary Fund and the European Central Bank expressed skepticism about whether Greece would follow through on reforms proposed as part of a deal to obtain a four-month extension of the country’s current bailout agreement. The IMF said current descriptions of how taxes, pensions, privatization of key assets, and trade policies would be overhauled lacked a “clear commitment” to details about implementation.

· U.S. economic growth in Q4 2014 was less robust than initially thought. The Bureau of Economic Analysis revised its estimate of gross domestic product downward from 2.6% to 2.2%, primarily because imports were higher and private inventory investment was less than in previous estimates.

· A 0.1% increase in home prices in December contributed to a 4.5% year-over-year gain in the S&P/Case-Shiller 20-City Composite Index. The western half of the country saw the strongest gains, while the Midwest and Northeast lagged.

· Sales of existing homes in January slumped 4.9% to their lowest level in nine months, but the National Association of Realtors® said they were still 3.2% higher than last January. Meanwhile, the Commerce Department said new-home sales slumped 0.2% during the month.

· Lower gas prices helped cut consumer inflation by 0.7% in January, according to the Bureau of Labor Statistics. That’s the biggest monthly decline since 2008, and left the annual inflation rate for the past 12 months at -0.1%.

· Durable goods orders were up 2.8% in January; according to the Commerce Department, that was the biggest monthly increase since last July. New orders for nondefense capital equipment saw a slight 0.6% gain.

· Rate cuts rather than increases were announced by China’s central bank over the weekend. The People’s Bank of China cut its benchmark one-year lending and deposit rates to 5.35% and 2.5% less than four months after previous cuts in November. The quarter-point cuts are a fresh attempt to stimulate a slowing economy.

· The Federal Communications Commission voted to regulate Internet service as a public utility, much as telephone service is regulated. The decision will enable the commission to enforce so-called “net neutrality” and prevent service providers from charging for priority access or interfering with traffic. However, telecom and cable companies are expected to challenge the decision in court.

Eye on the Week Ahead

In a data-heavy week, Friday’s unemployment figure will be of interest. Also, the European Central Bank will meet on Thursday to discuss its bond-buying efforts.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.