We all desire to make good decisions, right?

Of course we do.

Is there a decision around the corner that you’re struggling with making? How about a decision you’re simply doing your absolute best to avoid? How do we know what the right move is and when to make it?

Unfortunately, life does not always provide us with a clear financial path to follow. In games like chess or monopoly, the game board dictates our next move. Some experts in these games can actually visualize two or three moves ahead. Wouldn’t it be nice to have a game board for making your personal financial decisions? Just think, this type of game board could, A) provide a way to test or verify all possibilities prior to defining your strategy and making your next move, and then, B) test that strategy prior to seeing it play out in the real world, where as you know, the consequences of our decisions can be enormous. A tool like this can mean the difference between success and failure at a time when, at least in my way of thinking, failure is not an acceptable option.

Imagine what your life would look like without that one poor financial decision. Imagine what your family’s future could hold if we worked together to minimize, or better yet…  eliminate, financial mistakes. Would that mean less stress for you? Could that lead to bigger opportunities for your children? Would you have the freedom to give more?

This kind of tool would be, and is, PRICELESS!

Over the next two posts we will be taking a look at the various aspects and strategies of the financial decision making process. Stick with me and don’t forget, “It’s Your Move”.

It’s Your Move: Part 2

In this series we are  looking at the different ways individuals make their financial decisions. In the last session we asked the question, what would life be like if we could eliminate financial mistakes? What would that mean to you or even someone you love? Could that mean extra trips, a better education, less stress or strain on relationships?
Have you ever torn into a new game or toy without first reading the directions? Most of us have done this only to hear our spouse say, “Honey… have you read the directions?!!”  I think it’s suffice to say that we have all engaged in this seemingly senseless routine. Of course, most of the time this is not a big deal because there are little to no consequences for our mistake. However, let’s not make these same mistakes relative to some of the most important decisions we’ll ever make… those regarding where and how we protect, save and invest our hard earned money.

Often decisions are made based on:

• Others opinions
• Limited information
• Predetermined goals
• Convenience
• No model (without proof it will work)

When decisions are made this way it can prove to create an outcome that is both disorganized and limited. We describe this as somewhat of a financial junk drawer. This is really no different than tearing into the game without reading the directions! If you are making decisions with out any verification process, what will you say when your spouse asks the question, “have you read the directions?” What they’re really asking is, “Are you sure we are doing as well as we possibly can? Have we looked at all the options and made sure there isn’t a better alternative?”

The lack of a financial model will lead to errors and mistakes. The financial model that we eluded to in Part 1 is the Protection, Savings and Growth Model. This will serve as the game board or verification tool we desire that can help us with our financial decisions and allow us to have freedom from the worry that can sometimes surround these decisions. It also gives us the ability to say, “YES Honey! I have read the directions!”

In the future we will look at the Macro Economic Financial Model called The Protection, Savings and Growth Model. It’s one of the most powerful tools to use in order to make sound financial decisions.

Weekly Update – February 20, 2012

Despite a turbulent week filled with mixed news from Europe and rising Middle East tensions, stocks closed higher on hopes that Chinese assistance would mean a bailout plan for Greece. The S&P 500 closed at 1361.23, a level not seen in nearly a year, having gained 8.2% so far in 2012. Other major indexes also rose for the week, the Dow advancing 1.2% and the Nasdaq climbing 1.7%.[i] 

In not-so-great news, crude oil prices rose for a third straight day on U.S. markets Friday, topping $103 a barrel, sparked by increased saber rattling from Iran over its nuclear energy policies. A sustained surge in prices could weigh on the global economic recovery. Drivers are seeing the effect at the pump, with gas prices up by 0.9% since January, topping $3.50 a gallon in many places. Every added penny at the gas pump diverts roughly $1 billion in consumer spending away from other sectors of the economy.[ii] 

Thankfully, inflation isn’t looking bad overall. The Consumer Price Index (CPI) only rose 0.02% in January, which was in line with expectations. The Core CPI, which excludes food and energy, also matched expectations, gaining 0.02%. Year-over-year gains were 2.9% for the general CPI and 2.3% for the Core CPI. If overall inflation was higher, economic growth could be threatened by rising prices, and the Fed would likely respond by raising interest rates. The Fed’s statement following the January FOMC report described price pressures as “subdued”, and indicated that they plan to keep rates low until at least late 2014.[iii] 

In simple English, last week was really a mixed bag. While we are happy with the stock market’s performance, progress in Europe, and low inflation, unrest in the Middle East is a wild card. Every time bad news out of that region hits headlines, speculators drive gas prices through the roof. At this point, all we can do is monitor the situation, hoping that with diplomatic pressure, Iran will listen to reason.

ECONOMIC CALENDAR:
Monday:

U.S. Markets closed for President’s Day
Wednesday:

Existing Home Sales  
Thursday:

Jobless Claims, FHFA Housing Price Index, EIA Petroleum Status Report
Friday:

Consumer Sentiment, New Home Sales

Weekly Update – February 13, 2012 

As the old expression goes; what goes up must come down. During the final minutes of trading, the Dow Jones Industrial Average trimmed its gains, falling 89.23 points, or 0.7%, locking in a weekly loss of 0.5%. For the day, only one of the Dow’s 30 components rose. The broad-based S&P 500 fared similarly, retreating 9.31 points, or 0.7%, for a loss of 0.2% for the week, while the tech heavy Nasdaq declined 23.35 points, or 0.8%, ending the week down 0.1%.[i] 

In an action reminiscent of 2011, worries about stalling efforts to keep Greece from defaulting sparked this pre-weekend decline. As stocks fell, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX) jumped above 20 for the first time in nearly two weeks, rising more than 11%.[ii] While we don’t view this as a major cause for alarm, it is a reminder that all is not yet well with our European counterparts. After a week dominated by both hopes and fears about a nation at the center of Europe’s debt crisis, stocks finally snapped their five-week winning streak as negotiations faltered.

Equity markets have been red-hot this year, and frankly, last week’s pullback should come as little surprise. If stocks continued their ascent at the same fiery pace we’ve seen so far in 2012, the S&P would end the year up over 60%! Such remarkable gains are completely unrealistic to expect, and would be totally unsustainable. Healthy markets move up and down on a daily basis. While it is generally accepted that the stock market will grow in value over time, short-term movements can happen for a variety of reasons too numerous to list. It’s just the nature of the stock market.

It may be easier said than done, but we encourage you not to let unpredictable short-term moves in the market overly influence your investment decisions. In the long run, we believe Europe is going to muddle through this, though there are bound to be bumps along the way.

What drives your decision making progress? Would you like to discuss our process?

ECONOMIC CALENDAR:
Tuesday –

NFIB Small Business Optimism Index, Retail Sales, Import and Export Prices, Business Inventories

 
Wednesday – Empire State Manufacturing Survey, Treasury International Capital, Industrial Production, Housing Market Index, EIA Petroleum Status Report, FOMC Minutes

 
Thursday – Housing Starts, Jobless Claims, Producer Price Index, Ben Bernanke Speaks at 9:00 AM ET, Philadelphia Fed Survey

 
Friday – Consumer Price Index, Leading Indicators

Weekly Update – January 30, 2012

With only a couple trading days left in January, stocks are positioned to lock in four straight months of gains and finish with their best performance since 1997.[i] Unfortunately, some momentum was lost last week after the government said the U.S. economy expanded at a slower-than-expected pace in the fourth quarter. For the week, the Dow Jones Industrial Average fell 0.5%, while the S&P 500 and Nasdaq notched modest gains.[ii] 

Because the figures reported by the Commerce Department were lower than expected and stocks pulled back, should that lead us to conclude that economic growth was poor? Not at all. Gross domestic product, the broadest measure of the nation’s economic health, grew at a 2.8% annual rate during the last three months of the year, which is a major improvement from the 1.8% we saw during the third quarter, and is the fastest growth we’ve experienced since the second quarter of 2010.[iii] 

On the other hand, when you look closely at the numbers, there are some important points to note. One is that the majority of the growth came from one area – business inventories. Private businesses increased inventories $56.0 billion in the fourth quarter, following a decrease of $2.0 billion in the third. Of course that sounds wonderful, but it can also be a double-edged sword. While it shows that businesses are optimistic about the health of the economy and feel confident they can sell their goods, if sales fall short of expectations, it can create a financial burden for them in the future. Only time will tell how this works out.

Another important point is that “real final sales of domestic product” – GDP less the change in private inventories – only increased 0.8% in the fourth quarter, compared with an increase of 3.2% in the third. So while GDPas a wholepicked up in the fourth quarter, real salesslowed down. This is likely one of the reasons why the Federal Reserve lowered its outlook for the economy in 2012, announcing that they expect it to grow between 2.2% and 2.7% this year.[iv] 

What’s next? The week ahead is a heavy one for economic data that includes personal income, consumer confidence, auto sales, manufacturing, construction, and the key nonfarm payrolls figure at the end of the week. In addition to the economic news, nearly 100 companies in the S&P 500 will report quarterly earnings.

Why are all these numbers important? For months, U.S. economic indicators have taken a back seat to headlines out of Europe, but as confidence grows that the Eurozone will survive, focus should gradually shift back to the health of the U.S. economy. We’ll be watching this data and sharing our thoughts with you along the way.

ECONOMIC CALENDAR:
 

Monday –
Tuesday – Employment Cost Index, Redbook, S&P Case-Shiller HPI, Chicago PMI, Consumer Confidence
Wednesday – Motor Vehicle Sales, ADP Employment Report, ISM Manufacturing Index, Construction Spending, EIA Petroleum Status Report
Thursday – Jobless Claims, Productivity and Costs
Friday – Monster Employment Index, Employment Situation, Factory Orders, ISM Non-Manufacturing Index

Personal Income and Outlays

Weekly Update – January 23, 2012

There’s an old adage you may have heard recently which says: “As goes January, so goes the year.” What is this January barometer all about? According to the Stock Traders Almanac, the month of January tends to predict the direction of the market with an 88.5% accuracy ratio, with only seven major errors record since 1950.[i] Those aren’t bad numbers.

What causes the “January effect”? Most sources attribute it to a calendar-related anomaly in the financial markets where security prices increase in the month of January because investors sell losing positions in December and reposition themselves after the first of the year, or vice-versa.[ii] While this is certainly not exact science, and it is far too early to know if January will accurately predict the rest of the year, it is interesting to note.

So far, the Bulls are really showing off. With seven trading days left to go in January, the benchmark indexes are all up between 4% and 7%. The S&P 500’s 4.5% YTD gain marks its best start since 1987![iii] So does this bull have legs? Skeptics will tell you it doesn’t and idealists will tell you it does. We’d like to tell you that we don’t know. We’re not clairvoyant. (Sorry, we know you wish we were.) What we do know is that markets don’t move up or down in a straight line, and we won’t be surprised if we experience a pullback in the weeks ahead. This is not something we fear; it’s just the nature of the stock market.

There are both positive and negative factors at work right now, and we are monitoring many of them. Europe is still on the map, and our economy is growing at a slower-than-average rate that leaves it somewhat vulnerable to external shocks. At the same time, we see the strengthening in various sectors such as financials, basic materials, durable goods, and technology[iv] as reasons to sustain our optimism that both the stock market and the economy will fare well in 2012.

ECONOMIC CALENDAR:

 
Tuesday – Redbook
Wednesday – Pending Home Sales Index, EIA Petroleum Status Report, FOMC Meeting Announcement 

 
Thursday – Durable Goods Orders, Jobless Claims, New Home Sales, Leading Indicators

 
Friday – GDP, Consumer Sentiment

Would you like to discuss your portfolio of investments and what is impacting it? 

Weekly Update – January 16, 2012

We know you’re probably tired of hearing about Europe’s debt crisis, and frankly, we don’t blame you. At risk of sounding insensitive to the struggles of our European neighbors, we’re tired of it too. While there are benefits to globalization, there are also drawbacks as evidenced by the unprecedented level of negative influence Europe’s financial issues have had on us in recent years.

As we look at last week’s activity, we can see the affect Europe is having yet again. While all three indexes ended the week in positive territory, recent gains came at lower-than-normal trading volumes as wary investors dipped their toes in the water, but were afraid to dive in.[i] Stocks finished in the red Friday on expectations that nine Eurozone nations would be downgraded by S&P (and they were shortly after trading hours), including AAA-rated France and Austria. Italy was lowered two notches to BBB+, dangerously close to junk bond levels that could make it even more difficult for the government to raise money.[ii] Here’s the report card[iii]:

France – AAA to AA+

 
Austria – AAA to AA+

 
Slovenia – AA- to A+

 
Slovakia – A+ to A

 
Spain – AA- to A

 
Malta – A to A-

 
Italy – A to BBB+

 
Cyprus – BBB to BB+

 
Portugal – BBB- to BB

While investors have been expecting this downgrade since S&P issued a warning last month, the news is still a harsh reminder that Europe is not out of the woods. It is not yet clear how hard the downgrades will hit markets, but it is likely that we will continue to feel Europe’s influence until this situation is resolved. On the bright side, leaders from Germany, Italy, and France have been sounding upbeat about proposed solutions.[iv] We hope their optimism will promptly translate into concrete actions.

When any set of circumstances has the potential to affect your financial situation, we are committed to monitoring it closely and to keeping you informed. Please rest assured that the European debt crisis is no exception.

ECONOMIC CALENDAR:
Monday –

U.S. Holiday: Martin Luther King Jr. Day
Tuesday –

Empire State Manufacturing Survey

 
Wednesday – Producer Price Index, Industrial Production, Treasury International Capital, Industrial Production, Housing Market Index

 
Thursday –Consumer Price Index, Housing Starts, Jobless Claims, Philadelphia Fed Survey

 
Friday – Existing Home Sales

Personal Finance Fiscal Shape-Up
Winter time to re-evaluate money matters
Crystal Ledford cledford@forsythnews.com
Published: January 12, 2012

As a follow up to the News Years Resolutions article from Crystal Ledford on January 1, 2012, Crystal has taken a closer look at Financial Planning in the new year. Read this Forsth News article that appeared in print on January 12, 2012.

 
Everyone knows the start of a new year is a time to think about health. According to local financial advisers, it’s also a time when many people do want to get themselves in better fiscal shape.

“Our advice would be the same regardless of the time of year,” said Todd Burkhalter, a managing partner with Catalyst Wealth Management in south Forsyth. “But this time of year is a natural break for people. It’s time for a fresh start.”

Burkhalter’s partner, David Pierce, said December and January are often some of the busiest times of the year for financial advisers.

“People have a little time off and they just got forms from their [human resources] department, so they start thinking about questions they might have or planning considerations,” Pierce said.

David Leathers, a financial adviser with LPL Financial in downtown Cumming, agreed.

“Typically, now is the time to reach out to clients and schedule time for an annual review,” Leathers said. “Typically, right after the start of a new year, you want to look at all the information from the previous year and see where you can make adjustments for the following year.”

All the financial advisers agreed that when starting to focus more on finances, people should get some advice.

Burkhalter and Pierce said financial advisers can help guide people toward better fiscal decisions.

“We can help them identify their wealth objectives and get them to better narrow things down to reach whatever they’re trying to accomplish,” Burkhalter said.

Added Pierce: “It’s like a lens or a filter. We can run many experiments on paper to find what the best scenarios are for their individual needs.”

While he had a good handle on his financial life, customer Jack Lyons said he found greater insight when he started using a financial adviser.

“These folks help break things down and find the gaps in your plan,” Lyons said. “They helped me find places where I could be saving more and planning better for my retirement.”

But that advice doesn’t always have to come from professionals. 

Burkhalter said sometimes a family member or friend can also help.

“A lot of times, it’s just getting another set of eyes on what you’re doing,” he said.

Pierce said one situation that often bothers him is older generations not sharing their wisdom with descendants.

“It’s important for different generations to speak to each other about money,” he said, noting that same goes for married couples.

“When you’re a married couple, you’re a team and you’re against things that take away your wealth together, so don’t point fingers,” he said. “Get on the same team.”

Pierce said often one partner will manage all the finances, but that’s a bad idea.

“It’s important for both to be aware of all the finances.”

When getting started, Leathers said the first step is learning to live on a budget.

“You have to learn how to create and live within a budget, and that can be the hardest part,” he said.

An important part of the budget should be setting aside funds for paying down debt.

Leathers said while some debt makes sense, high interest loans, such as credit cards, should be paid off as quickly as possible.

“Certain debts make sense, like mortgages,” Leathers said. “You can borrow a 30-year loan for 3.9 percent and that’s a manageable debt.”

But credit cards, which typically carry interest rates from 16 to 20 percent, don’t make sense, Leathers said.

While paying down high-interest debt should be a priority, savings shouldn’t be overlooked.

“It needs to be some combination of saving and paying off debt,” Burkhalter said. “If you get all you’re debt paid off, but have no savings and then have some emergency, you’re going to be right back in debt because you’re going to have to go to a credit card or some other loan.”

Burkhalter said a long-term goal is to be able to save at least 15 percent of one’s income.

“But the main thing is to just get started,” he said. “You’re probably not going to be able to go from saving nothing to saving 15 percent of your income, but maybe you can save 1 percent.”

Leathers added that it’s important to set realistic goals.

“If you have a handful of credit cards, make an effort to get one paid off and make it go away, things like that,” he said.

“You want to make goals that can be accomplished. Take baby steps.”

Copyright, 2012, Forsyth County News. All Rights Reserved.

I was recently quoted in a Forsyth News article about New Years Resolutions. I have included a copy of the article by Crystal Ledford below. Crystal sites several local experts from various fields about what they are seeing people set out to do in 2012.

Experts Say: Take smaller steps for realistic goals

From shedding holiday pounds to saving more money, New Year’s Resolutions remain popular.

While many may fall by the wayside soon after being declared, the holiday tradition of trying to better ourselves seems to persevere.

“It’s human nature to set goals for ourselves,” said Michele Melton, Forsyth County Extension Agent. “And this is a popular time of year for it.”

The lull following the hectic holiday period is a good time for reflection, said Todd Burkhalter, a financial adviser.

“You’ve made it through the holidays, and you’re not yet being pulled in a million directions like you will be later in the spring,” he said.

Some religious leaders believe Christmas can be a reminder of transformation, leading to resolutions.

“The entire Christian faith, as opposed to other religions, is all about transformation,” said David Coombs, pastor of North Forsyth United Methodist Church. “We accept Christ into our lives and we are completely transformed.

“When you take on a New Year’s resolution, you want to be changed in some way. The difference is when you become a Christian, your entire life is changed, not just one small part such as with resolutions.”

Some of the most common resolutions seem to be those that involve losing weight or in other ways improving overall health.

“After the New Year there’s always a huge rush of people thinking about losing weight and getting healthy,” said Paul Grimm, head personal trainer at Anytime Fitness on Freedom Parkway.

Most gyms see their highest numbers of new members for the year in January, due largely to people’s resolutions.

Aman Kakkar, a cardiologist at Northside Hospital-Forsyth, said while losing weight historically has been the primary health-centered resolution, this year he’s seeing more people who want to drop their cigarette habit.

“I just saw a patient who said he’s not picking up another cigarette starting Jan. 1,” Kakkar said. “This year, I’m definitely seeing more of a trend toward smoking cessation.” 

Melton, who offers several classes throughout the year to help people learn about nutrition, said the New Year holiday and the beginning of a new school year are typically the times when people think more about healthy eating.

“There’s a mental aspect of needing a starting line, and both of those times of year are times of new beginnings,” she said. 

But Melton said the Forsyth County Extension Office can provide help year round.

“If folks are interested in learning more about good nutrition, I’m happy to help with information anytime,” she said. “We have a lot of resources here.” 

Similarly, Alicia Glassford, a registered dietitian at Northside-Forsyth, spends much of her time helping diabetics learn about making good decisions.

“After the holidays, our business always goes up a lot,” she said.

Some of Glassford’s tips to clients include incorporating more movement in their daily lives, preparing more meals at home, dropping calorie-filled beverages, and keeping a food journal.

“Research shows that those who write down everything they eat lose about 7 percent more weight than those who don’t,” Glassford said.

Besides health, Burkhalter said many people think about improving their financial lives at this time of year.

“Not only are people making resolutions, but now is also a good time to take advantage of open enrollments for different financial programs,” he said.

Burkhalter said many people want to learn how to save more of their money.

“We always encourage people to set up programs that are automatic so they don’t have to think about it,” he said. “For example, using an employee’s retirement plan that automatically deducts money from their check, or an automatic deduction from their checking account to their savings account.”

It seems a big part of keeping New Year’s resolutions rests in being realistic when setting them.

“You’re probably not going to go from being someone who doesn’t save anything to saving half your income in one year,” Burkhalter said.

Added Melton: “It’s important to have goals that are measurable and attainable. The resolution should just be the starting line to kick things into gear, and you don’t want to set yourself up for failure.”

Kakkar, the physician, and Glassford, the dietitian, both recommend small steps when it comes to resolutions that involve health.

“Don’t aim too high,” Kakkar said. “We all want to be overachievers all the time, but our aims should be modest so we don’t give up.” 

For example, Glassford said losing just 5 to 10 percent of one’s body weight can create big health benefits.

“So if someone weighs 200 pounds, just losing 10 to 20 pounds can lowered their blood pressure, cholesterol and blood sugar levels,” she said.

And achieving even small goals can be mentally satisfying, Kakkar said.

“Don’t go for the gold, just settle for the bronze.”

Source:

http://www.forsythnews.com/section/20/article/11352/

http://www.forsythnews.com

Original article in print 1/1/2012

Weekly Update – January 4, 20112

As we close the books on 2011, many will associate the year with Europe’s debt crisis, Congress’ political gridlock, and the stock market’s volatility. And to some extent, they’ll be right. We did face a number of significant challenges during the course of the year. At the same time though, 2011 was a year of growth and healing for the United States.

Americans are spending again, as evidenced by a record-breaking holiday shopping season.[i] Factories are producing more.[ii] Companies are generating impressive profits.[iii] The housing market is showing signs of life.[iv] And with the unemployment rate at its lowest level in nearly three years[v], even the job market is improving. While blind optimism can be a dangerous thing, focusing on the negative can be equally risky. So without amplifying the problems of the past or minimizing the challenges of the future, let’s take a look back at some of the key events that made 2011 what it was.

Japan Quake Shakes Markets (March)

The devastating earthquake and consequent tsunamis that hit Japan in March riled global markets. The Japan earthquake sent the Nikkei Index on a downward spiral, and the U.S. stock market soon followed. The auto industry lost ground as Japanese manufactures were forced to halt production due to power outages.[i] 

Budget Problems Almost Result in Shutdown (April)

Well into April, the 2011 budget had still not been approved by Congress. Instead, lawmakers passed six short-term spending bills through March. The final extension was set to expire on April 8^th, forcing Congress to come to a budget agreement or face a shutdown. Had a shutdown occurred, Americans would have faced grievous consequences, and nervous investors felt the pressure.[ii] 

Osama Bin Laden’s Death Rallies Markets (May)

Following the death of Osama Bin Laden at the hands of U.S. forces in Abbottabad, the stock market opened significantly higher. President Obama called Bin Laden’s death “the most significant achievement to date in our nation’s effort to defeat al Qaeda.” The Dow Jones industrial average rose 56 points (0.5%), the S&P 500 climbed 5 points (0.4%), and the Nasdaq Composite gained 8 points (0.3%).[iii] 

U.S Government Risks Defaulting on Debt (July)

After the U.S. debt ceiling was reached in May, the government was forced to find a solution or risk default on August 2. Though congress had over 11 weeks to come to an agreement, things came down to the wire once again as lawmakers argued over solutions, leaving financial markets on edge.[iv] 

S&P Downgrades the United State’s Credit Rating (August)

In what was perhaps the most humiliating news of the year, Standard and Poor’s decided to downgrade the U.S. credit rating from AAA to AA+, which marked the first U.S. credit downgrade in history. This downgrade hit stock prices hard, and the long term consequences of S&P’s move are yet to be known.[v] 

Occupy Movement Begins (September)

Activists began gathering in New York City’s Financial district on September 17^th to protest social and economic inequality, high unemployment, greed, corruption, and the influence of corporations on government. The protests in New York City have sparked similar protests around the world. News surrounding this movement has been a regular feature of recent headlines.[vi] 

A Note About Equities

U.S. stocks slid on the final trading day of the year, with the S&P 500 surrendering its 2011 gain and settling virtually flat for the year at -0.04%. The Dow Jones industrial average ended the year up 5.5%, its second consecutive yearly rise, and the Nasdaq composite index finished down 1.8% for its first annual loss since 2008.[vii] Despite disappointing equity returns in 2011, the last three months of the year were positive, which could bode well for 2012. The S&P 500 rose 11% in the fourth quarter, and the Dow climbed 12% for its largest quarterly point gain in its history. On the bright side, stocks seem to be well-priced. The S&P 500 is trading at 12 times its expected earnings per share versus a more typical 15 times. In other words, stocks appear cheaper than normal right now.[viii] 

In Conclusion

 
What is in store for 2012? The answer to that question will depend on who you ask, and where they’re looking. At the end of the day, no one has a crystal ball that can be relied upon, and we should not be so arrogant as to make predictions. The indicators we are watching offer both positive and negative signs and many questions remain to be answered. How will Europe sort out its debt troubles? Will U.S. lawmakers raise the debt ceiling again in 2012? Will they extend the Bush Era tax cuts? How will China’s slowing economy affect the world? The answers to these questions and more like them have the potential to affect financial markets.

All in all, 2012 is beginning on a more positive note than many investors could have predicted given the challenges of 2011. And while we hope the economy and the stock market maintains its positive momentum, history teaches us that ups and downs are part of life. Whatever we face in the year ahead, rest assured that we will maintain a watchful eye on any factors that have the potential to affect you. May a bright and prosperous 2012 be yours!