Archives For Todd Burkhalter

Weekly Update – September 24, 2012

During the past three months, the stock market has turned in one of its strongest performances in U.S. history. Since early June, the Dow Jones Industrial Average has gained 12%. If this rate of increase continued, it would offer close to a 50% annualized gain.[i] But of course, such expectations are entirely unrealistic. While we are grateful for market gains when we can notch them, we must acknowledge that healthy markets move up and down.

In keeping with this behavior, markets closed slightly down last week as investors weighed promises by the Fed and other central banks against signs of economic hurdles and political challenges ahead. The S&P closed 0.38% lower, the Dow lost 0.1%, and the Nasdaq trimmed 0.13%.[ii]


Federal Reserve officials made the rounds last week, giving speeches and expressing support for the Chairman’s efforts to stimulate the economy. Some comments lead analysts to believe that the Fed will act on its strong mandate and take further action if necessary; however, most believe it will leave policies unchanged until the end of the year. While investors cheered the recent aggressive Fed actions, some believe the move indicates the U.S. recovery is still uncertain at best.[iii]


As we near the end of the third quarter, we will begin to see the first corporate earnings reports. Profit warnings from companies in the S&P 500 are outpacing positive pre-announcements by the largest margin in 11 years, indicating that businesses are still feeling the economic crunch.[iv] Because companies have been cutting earnings estimates for months already, there is a possibility that weak earnings  could trigger a decline in stock prices. Even so, equities could heat up in the first week of October due to market-moving events like the release of unemployment data, the presidential debate, and the Eurozone finance meeting.

As the elections near, politicians are ramping up the rhetoric, but still failing to deal with the fiscal cliff, a huge issue in the minds of analysts and investors. Although we wish that legislators would get their priorities straight and do their jobs, it is unlikely that any major resolution will be reached until after the elections. Should you have any questions about how the fiscal cliff or any other issue could affect your personal financial picture, please contact us. We are always happy to provide guidance.




Monday: Dallas Fed Mfg. Survey

Tuesday: S&P Case-Shiller HPI, Consumer Confidence

Wednesday: New Home Sales, EIA Petroleum Status Report

Thursday: Durable Goods Orders, GDP, Jobless Claims, Pending Home Sales Index

Friday: Personal Income and Outlays, Chicago PMI, Consumer Sentiment

Data as of 9/21/2012


Since 1/1/2012




Standard & Poor’s 500
























10-year Treasury Note (Yield Only)






Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not available.


Homebuilders see strong third quarter. In a further sign that the housing sector may have turned the corner, U.S. homebuilder KB Homes, reported strong third quarter earnings. The company reports that it is experiencing rising orders for new homes as inventory drops and housing prices rise.[v]

Jobless claims rise in 26 states. Unemployment rates rose in 26 states in August, according to a Labor Department report, although most states still showed lower rates than a year ago. 42 states and the District of Columbia had lower rates last month than in August 2011.[vi]

Oil prices near $93 per barrel. Oil prices rose higher Friday as traders weighed slowing economic growth and reduced demand for oil against potential supply disruptions in the Middle East. Higher energy prices as we head into the winter months could hit consumer spending hard.[vii]

Concern grows about China’s hard landing. A raft of negative economic reports is raising concerns that China’s economy will not recover. A one-two punch of softening domestic and foreign demand is threatening the giant’s economic stability. A recent report shows that manufacturing grew only slightly in September and that foreign direct investment fell in August for the third month in a row.[viii]


“Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.” – Norman Schwarzkopf


Weekly Update – September 17, 2012

Markets experienced a sharp rally last week as the Federal Reserve unleashed its long-expected quantitative easing. The major indices closed higher with The S&P gaining 1.94%, the Dow gaining 2.15%, and the Nasdaq picking up 1.52%.


Under the pressure of the previous week’s disappointing jobs report, the Fed finally let the genie out of the bottle. The report showed that the economy had added just 96,000 jobs in August, a number much lower than economists expected.[i] This was enough to get the Fed to finally launch long-awaited additional quantitative easing. Under QE3, the Fed has made an open-ended commitment to buy mortgage-backed securities to the tune of $40 billion per month. The move is designed to lower long-term interest rates and spur more lending to businesses and consumers. The Fed said it also will “closely monitor” the economy and continue these purchases and possibly expand them until it sees substantial improvement in the outlook for the labor market.[ii] This open-ended commitment means that QE3 will last as long as the Fed wants it to and we cannot be sure when it will end.


The Fed’s recent action sends a signal to businesses and investors that it fully intends to use its powers in a major (and unusual) way to spur economic growth. That is a powerful statement to make in a time of economic uncertainty. QE3 is designed to convince businesses to invest in the future by assuring them that the Fed stands ready to do whatever is necessary.


On the negative side, our concern is that QE3 will simply add to the already enormous national deficit without dealing with the underlying causes of our current economic weakness. We are also skeptical that the Fed’s actions will convince banks to lend aggressively; rates are already at historic lows, but businesses and homeowners are still having trouble borrowing from gun-shy lenders. In short, QE3 is not a magic bullet that will solve our economic issues. In fact, it may actually add to our problems when the Fed is forced to unload all the bonds it has purchased – not just the QE3 bonds, but the $2 trillion in Treasury bonds it bought during QE1 and QE2 as well. Selling all that debt will drive up interest rates and may stall the recovery just when it has finally taken off.


So, what can we expect next? It’s clear that markets are jubilant about finally seeing what the Fed had in store. However, once investors get over their reaction high, if the economic numbers don’t show improvement, markets will likely retreat. Although we hope that businesses respond positively to the Fed’s move by increasing hiring and capital investment, we really want to see Congress pull itself together enough to address the fiscal cliff and tighten its purse-strings. If you have any questions about how QE3 or any economic issue will affect your portfolio, please feel free to call or e-mail us. We are delighted to be of service.



Monday: Empire State Mfg. Survey

Tuesday: Treasury International Capital, Housing Market Index

Wednesday: Housing Starts, Existing Home Sales, EIA Petroleum Status Report

Thursday: Jobless Claims, Philadelphia Fed Survey

Why go? Should I go to this conference? Maybe I should just stay in the office and work…..Have you ever asked yourself these questions? 


Let’s face it within the financial industry there is no end to the amount of conferences that are available to attend. It is literally possible to be gone every month attending award trips, learning trips, study groups etc. if you aren’t careful you can learn, reward and travel yourself right out of business! However, I am a big fan of attending these events, even so much as to have been accused of being a conference junkie or working on my lanyard collection. I think it is important to be choosy as to which events you spend your time and money attending. Below are three reasons why you must go to the right events.



Events like Conferences bring out the best and the brightest within any industry. What an excellent opportunity to meet and learn from a host of experts from all over the country or world in one location. Some of the best business practices or presentations have come from me attending a breakout session at a conference. These presentations have led to my clients and me being financially better. Sometimes, it’s the one idea that you pick up that more than pays for any registration or travel expenses that may be incurred. There is a direct correlation between learning and earning, never stop doing either.


The networking and creating relationship is also one of the valuable results of attending a conference. Over my career I have made numerous friends throughout the world at such events. Typically like-minded people
attend similar events, therefore you can’t help but meet people who are interested in the same ideas that you deem valuable. However, it is often that some of the best ideas come from seeing what other successful people do in their lives/business. Much of the learning that I mentioned above has happened for me as a result of conversations that take place surrounding the actual event. I also mentioned earlier the fact that experts are gathered in the same place as presenters/speakers, what a great opportunity to meet and establish a relationship with someone with such influence.

Social media has added to the power of the conference. The shelf life of the content, as well as the ability to connect with other attendees has been greatly extended. I typically will tweet, post on LinkedIn and facebook before, during and after an event. Using #Hashtags to group/categorize posts helps to connect those in attendance and talking about the conference or subject.


It is important to work hard and most successful advisors do not have trouble with putting in the time. It is however important to step back and take a break from time to time. Good conferences are usually held in great resorts and beautiful locations. The group rate that a conference enjoys at hotels allows you to travel within budget and is often a business expense for tax purposes. So as you travel the world while learning and networking you are also getting a chance to rest and recharge your inner battery. This recharging
allows you to return to the office with new ideas, skills and to be overall more focused.


Most conference events offer some element of the three items listed above, but they weren’t all created equally. It is important to make good choices about which events make it into your calendar. I have a few that are mainstays and that I hate to miss. Find which ones work best for your goals and objectives and just go!

I would love to hear feedback via twitter, facebook and LinkedIn. What are some of your thoughts on attending events and which ones are your favorites?


Some of my favorites….

The Catalyst Conference

Triad Advisors National Conference

Kingdom Advisors

LEAP Symposium