We know April showers bring May flowers, but rain in Tucson has become as rare as a sunny day in Seattle, and the showers were limited to showers of quarterly corporate earnings reports. After the best first quarter in 14 years, the S&P 500 moved to a new multi-year high early in the month before succumbing to disappointing economic data that knocked the index down 5% in just 5 days. However, the steady stream of generally better than expected earnings, leading to a single day gain of $50 in the shares of Apple and $35 in Amazon.com, helped stabilize the index. The first two weeks were down, the second two up, and at the end of the month the S&P 500 was down .7% but is still up 11.2% for the year.

As the month began there was some concern that China, the global growth engine over the past 3 years, was slowing, so traders were relieved on April 2nd to learn March economic activity there was the highest in 11 months. However, since much of the economic growth in the U S over the past 3 years has been the result of a flood of Federal stimulus money, the release of February’s Open Market Committee minutes on the 3rd showing little discussion about further easing, prompted selling. We ended the first week of April with a tepid Spanish bond auction and news banks there have the highest loan delinquency rates in 15 years, once again raising concerns about the European debt crisis. In addition, we also received the worst government jobs report this year, showing only 120,000 new jobs were created in March, about a third of what is necessary for a strengthening economy. The last two reports generated a selloff that took the market through short term technical support and to its lowest level of the month. At that point, corporate earnings started coming in and the average earnings growth was well above the 1% analysts were expecting, helping to move the market off the low. During the last half of the month, better than expected corporate earnings helped offset a steady stream of disappointing economic reports and, near month’s end, Fed Chief Bernanke made comments that were interpreted as suggesting QE3 is still a possibility. Whether it is or not is anyone’s guess but, since the flood of Federal money has pushed the market higher for 3 years, any possibility it could continue is embraced. At least for now, all news appears to be good news as weakening economic numbers are thought to mean a greater possibility of Federal stimulus.

We have all heard “sell in May and go away”, the old adage that harkens back to the days when Wall Streeters would head to the Hamptons for the summer and with no cell phones or internet access it was safer to go to cash until the fall. That approach would have worked well over the past 2 years but on average May is traditionally one of the best months of the year for market performance. After watching the market move nearly 9% higher in the first two months of the year we became modestly defensive in early March and more defensive in mid April. We have raised cash and in many cases added a position in the volatility ETF (VXX). To date, neither of those moves has paid off as the market has remained just off the 4 year highs and volatility has continued to decline, but we are comfortable with those defensive positions and will add to them as necessary. We are concerned that once the daily boost we have been getting from corporate earnings has run its course, traders will turn their attention to the weakening economic data and perhaps more unsettling, the ongoing debt crisis in Europe. However, weakness will create opportunity and we are ready to act as conditions dictate.

If you know someone who would be interested in learning more about Greenberg Financial Group, or who is retired or thinking about retiring, or would simply like us to review their current portfolio, we continue to offer our weekly retirement income workshops every Thursday @ 3 PM at Sam Hughes Place at 6th and Campbell. There is no need for a reservation.

As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance.  We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:30 AM to 10:00 AM on KNST AM 790 and 97.1 FM.  Please feel free to call us at (520) 544-4909.

With the market having gained nearly 9% in the first 2 months of trading this year we thought March could be a month during which the market digested those gains, but the market continued to push higher.  Whether it was the luck of the Irish around St Patrick’s Day, investors tiring of watching a rally in which they were not participating, or simply no other investment vehicle working as well as the stock market, the major indices moved to multi-year highs during the month.  At the close, the S&P 500 had gained another 3.1% and is now up 12% in 2012.  The best 1st quarter since 1998.
March began with continuing better economic news including a rise in pending home sales, an increase in consumer confidence and an upward revision to last year’s final quarter GDP.  China, the global growth engine over the last 3 years, reported an increase in economic activity but muted that with a government forecast of 7.5% growth this year, the slowest in 8 years.  About a week into the month, the old concerns about Greek debt once again resurfaced, knocking the market down 200 points to the low of the month, but we saw a 90 point rebound the following day as the concerns abated.  The government employment report was delayed until the 9th but showed 227,000 new jobs were created in February and the unemployment rate remained steady at 8.3%.  This was the 3rd consecutive month in which more than 200,000 jobs were created.  The big news of the month came mid-month when the government released their latest bank stress test results showing that all but 4 major banks were financially strong enough to withstand a substantial economic downturn.  This news gave most banks the ability to raise dividends and/or buy back stock which gave strength to the banking sector and pushed the overall market to new multi-year highs.  Overhanging the market for most of the month was the troubling rise in oil/gasoline prices, but even that abated somewhat near month end.
As we enter the new month we have become a bit more defensive.  Since the market low in 2009 stocks have increased at the same pace as earnings and since we are expecting earnings to be 5% to 7% higher this year, the year to date gain of 12% appears to be getting ahead of fundamentals.  With that said, it is not unusual to see an expansion of the price to earnings ratio and since that is still 10% below historic norms there is room for expansion to push stocks higher.  We are rebalancing our ETF model to more defensive names and have either raised cash and/or purchased defensive securities for the near term.  While we believe the economic expansion will continue and hopefully gain steam, we simply believe current prices are ahead of schedule and that is why we have become defensive.
If you know someone who would be interested in learning more about Greenberg Financial Group, or who is retired or thinking about retiring, or would simply like us to review their current portfolio, we continue to offer our weekly retirement income workshops every Thursday @ 3 PM at Sam Hughes Place at 6th and Campbell.  There is no need for a reservation.

As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance.   We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:30 AM to 10:00 AM on KNST AM 790 and 97.1 FM.   Please feel free to call us at (520) 544-4909.

February is often thought of as the “love month” with Valentines Day taking center stage and the love affair with stocks that began in January continued throughout the month.  Even the dramatic increase in the price of oil, with gasoline prices once again pushing towards $4 a gallon here and $5 a gallon on the coasts, didn’t discourage investors.  The S&P 500 has moved higher 7 out of 8 weeks this year, and during the one “down” week it only lost 2 points.  At the end of the month the S&P 500 had gained another 4.1% and is now up 8.7% for the year, its best start to a year in over 20 years.  The Dow Jones Industrial Average traded above 13,000 for the first time in 4 years, the NASDAQ is at levels last seen in 2000 and the S&P 500 also traded to a 4 year high.

The first day of the month saw better than expected economic news out of China and Germany, two countries that have been driving economic growth, and a separate ADP employment report showed 120,000 new private sector jobs were created in January.  Two days later the jobs report from the Federal government, arguably the most important economic report each month, showed a total of 243,000 jobs were added in January, the most new jobs in 9 months, and the unemployment rate dropped to 8.3%.  The drop in the unemployment rate was the 5th consecutive monthly decline and took it to the lowest level in 3 years.  Investors responded by pushing the Dow Jones Industrial average 150 points higher.  The next week was volatile with the on again, off again Greek debt deal first rumored to be on, only to be followed by a European Union demand that Greece to do even more.  By the middle of the month the Greek parliament had approved the necessary austerity measures to get the next tranche of their bailout and early last week the deal was formally approved by the European Union.  We ended the month with a report that consumer confidence had reached the highest level in over a year.

With interest rates near historic lows, unemployment steadily declining, corporate earnings continuing to improve and stock valuations below historic norms, it isn’t surprising to see the stock market rally, but the magnitude of the rally has been beyond what most expected.  While the market is off to a good start this year it is simply a continuation of how last year ended and the S&P 500 has now gained over 17% just since Thanksgiving.  We have been saying for some time that stocks represent good value and if investors were to gain confidence that the European financial crisis is manageable, the market should move higher, but even we have been surprised by the dramatic move up.  We believe the move has been promoted by the combination of large inflows of money into the market that are traditional this time of the year and a growing belief that the European crisis is indeed manageable.  In addition, last year the S&P 500 had 48 days during which it was down 1% or more and this year that number thus far is 0.  The decreased volatility seems to have given investors more confidence.  As we move into March we are aware the large flow of funds into retirement accounts will slow and after such a strong rally we would not be surprised to see a period of consolidation.  However, barring some headline making event, we believe any market weakness will be contained and we will view it as an opportunity to buy.  With that said, we are becoming less aggressive as the market moves higher and will not hesitate to act if we see the rally fail.

If you know someone who would be interested in learning more about Greenberg Financial Group, or who is retired or thinking about retiring, or would simply like us to review their current portfolio, we continue to offer our weekly retirement income workshops every Thursday @ 3 PM at Sam Hughes Place at 6th and Campbell.  There is no need for a reservation.

As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance.    We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:30 AM to 10:00 AM on KNST AM 790 and 97.1 FM.    Please feel free to call us at (520) 544-4909

Happy New Year indeed, as the market moved up 180 points on the first day of trading and continued to move higher nearly every day during the month.  Last month we pointed out January is historically the best month of the year for equities and this January, while only the 3rd up month for the S&P 500 in the last 9, was the best January in 15 years.  The S&P 500 & the NASDAQ Composite both closed higher each week this month and the Dow Jones Industrial Average closed higher at the end of the 3 of the 4 weeks.  At the end of the month the S&P 500 had gained 4.4%.  The standout performance was from the beleaguered financial sector which came in with a monthly gain of 8.1%.  The market was higher at the end of the first 5 trading days which history tells us makes the chance of an up year 85%.

When the calendar turned to the new year it was as if money managers flipped a switch and were no longer that concerned with events in Europe.  Almost overnight traders decided the European financial crisis was manageable and began instead to focus on U.S. economic activity and corporate earnings.  We began the month with better than expected manufacturing, showing strong new orders and low inventories.  A report on December employment showed a better than expected 325,000 private sector jobs were created and the unemployment rate dropped to 8.5%, the 4th straight month of declines, and to the lowest level in 2 1/2 years.  In addition, first time claims for unemployment continued to trend lower with a report on the 19th showing the biggest one week drop in new claims in 6 years.  Corporate earnings were generally better than expected with the standout performer being Apple, reporting record revenue and record earnings and vaulting the company to the position of the largest company in the world.  Near the end of the month the Federal Reserve announced they will keep rates low until at least late 2014, which is not great news for fixed income investors.  The last major report of the month was 4th quarter GDP which showed the economy expanded in the most recent quarter at a 2.8% annual rate, the best in 18 months but slightly below expectations.  Unfortunately, two thirds of the growth last quarter was inventory rebuilding, while business spending on capital goods was at a 2 year low.  Since inventory rebuilding is temporary, this report suggests first quarter 2012 GDP could be at a slower pace.

The market has not historically been in love with February.  Over the past 25 years the month has, on average, produced very modest gains that rank it 9th amongst all months for performance.  Perhaps traders spend the month digesting gains from January.  Regardless, we have taken a slightly more cautionary stance going into the month.  We eliminated the last of our rising rate ETF and either reduced our 2x S&P ETF (SSO) by half or swapped it into 1x S&P ETF (SPY).  We have also been selling more covered call options in those accounts where it is appropriate, as this defensive income oriented strategy seems to fit the current environment.  We have also been concentrating more on income, both fixed income and dividend paying stocks.  A big move down in stock prices does not seem to fit with the current signs of economic expansion and relatively low stock valuations, so we are not bearish, just cautious for the short term.  The big unknown continues to be how deep and how long the recession in the European Union will be.   

If you know someone who would be interested in learning more about Greenberg Financial Group, or who is retired or thinking about retiring, or would simply like us to review their current portfolio, we continue to offer our weekly retirement income workshops every Thursday @ 3 PM at Sam Hughes Place at 6th and Campbell.  There is no need for a reservation.

As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance.  We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:30 AM to 10:00 AM on KNST AM 790 and 97.1 FM.  In addition, we encourage you to take advantage of free internet access to your account(s) by going to our website at www.greenbergfinancial.com and registering for this free service.  Please feel free to call us at (520) 544-4909.

Santa Claus Rally is the phrase used to describe the tendency of the market to move higher around Christmas.  It is hard to tell whether it is caused by money managers simply being in a better mood around the holidays or buying in anticipation of January, the traditional strongest month of the year. Regardless, after a volatile year during which fear trumped fundamentals, it was nice to see Santa Claus come to town this month and help end the year with a nice Christmas week rally.  For the month the S&P 500 gain .8% and the index ended the year right where it started the year.  While disappointing, the lackluster performance was one of the best for any country during 2011 as many international markets lost 10% or more.

For the majority of the month the market acted like it has since the European financial crisis took center stage in May.  Good news out of the Euro zone was greeted with buying which was inevitably followed by bad news out of the Euro zone resulting in selling.  Those looking for some type of magic bullet or wave of a wand that will solve a problem that took decades of financial mismanagement to create are constantly disappointed.  It is also frustrating to watch our current Congress seemingly oblivious to events inEuropeas they continue to send our country down a similar path.  However, the stock market is supposed to measure the value of majorU.S.corporations and despite the international chaos, the value of those companies has continued to rise.  In addition, domestic economic numbers continued to improve during the month with government reports that 120,000 new jobs were created in November, the unemployment rate dropped from 9% to 8.6%, the number of people filing first time claims for unemployment benefits dropped to the lowest level in 3 1/2 years and manufacturing activity increased.  Black Friday was one of the best retail selling days in history and consumer spending, which accounts for 70% of all domestic economic activity, appears to be gaining strength.  At month end we even saw improving numbers from the housing sector, clearly the last area to see recovery from the Great Recession.

As I said earlier, January is traditionally the best month of the year for stocks as large amounts of money deposited into IRA and 401K accounts find their way into equities.  This flow of funds, along with improving domestic fundamentals, argues well for higher stock prices.  However, in the new year we are still going to be dealing with news out of Europe, as it is uncertain how deep and how long their inevitable recession is going to be.  As we saw during 2011, events in Europeare not yet having much of an impact on our economy but the fear of what might happen will continue to pressure our stock market.  In addition, 2012 is a Presidential election year and news surrounding that will certainly move the market. The week before Christmas we saw reports that German consumer confidence was better than expected combined with a strong debt auction out of Spain to rally our market 350 points.  By traditional measures the stock market continues to be undervalued and we would expect any sign that the European Union is getting a handle on their financial crisis to be greeted positively. 

If you know someone who would be interested in learning more about Greenberg Financial Group, or who is retired or thinking about retiring, or would simply like us to review their current portfolio, we continue to offer our weekly retirement income workshops every Thursday @ 3 PM at Sam Hughes Place at 6^th and Campbell.  There is no need for a reservation.

As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance.   We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:30 AM to 10:00 AM on KNST AM 790 and also 97.1 FM and visit our at www.greenbergfinancial.com.  Please feel free to call us at (520) 544-4909.