October 2011 NEWSLETTER
This was the quarter of extreme market volatility. It was a roller coaster of a ride!
You never knew where the markets would be at the end of the day.
Several factors caused this volatility:
a The debt ceiling controversy.
a Continual political disagreements over economic solutions.
a The S&P downgrade of our AAA rating.
a The European debt crisis – of particular concern were Greece, Italy, and Spain – which could set off a global recession.
a Fear of another recession here.
Fear, in fact, had a new name - Fear Contagion - which was feeding on itself and causing more volatile reactions to any news.
Finally, two other major underlying factors causing uncertainty were the job market and the difficult housing market.
The good news is:
a Our economy is slowly growing.
a Companies are healthy, as noted by strong earning which creates value for investors through higher dividends.
a Companies have been increasing their acquisitions and mergers.
a Companies are holding over $2 trillion in cash ready to put to use when they know more about the political decisions being made.
a Companies are hiring and adding more jobs to the economy. Examples: Panera Bread, Bridgestone, Ford, Great Clips, Enterprise, and Aramark.
a US auto sales are up.
a Manufacturing picked up in September.
a The GDP (Gross Domestic Product) is on the rise.
a Railroad freight tonnage is dramatically higher.
It’s been a crazy time but the last quarter of this year may bring some pleasant surprises, especially in November and December, when companies finish reporting.
LeAnn Lenander, CFP®
President, Lenander Financial Advisory, Inc.
