Concerns about Europe and the global economy set a negative tone last week and markets closed out at a loss. The S&P lost 1.15%, while the Dow lost 1.67%, and the Nasdaq 0.76%. On apositive note, the U.S. economy continues to slowly improve as evidenced by asurprisingly positive consumer sentiment report, showing that American consumers are still upbeat about the economy. Jobless claims held steady for
the week and some analysts speculate that the unusually high unemploymentclaims seen in the first weeks of April were the result of seasonal adjustment and not actual job losses. Earnings season is winding down, but a few key players such as Disney, Macy’s, and Kohl’s posted better-than-expected earnings.[i](These opinions are not to be construed as investment advice)

Eurozone troubles were at the core of investor concerns last week as realization dawned that in order to keep the European Union (EU) together, the European Central Bank (ECB) will have to pump trillions of euros into the monetary system. Germany is likely to face high inflation rates for the next few years as it struggles to help the economies of its partner countries. Still haunted by the hyperinflation of the
early 1920s, German voters may balk at the spending required to keep the euro afloat, pressuring politicians to balance needs with voter concerns – something that is never easy to do.

The recent European elections may also make it difficult for Europe to make headway against its debt
troubles. Hollande, the new Socialist president in France, has promised voters not to continue with strict austerity measures. While this is appealing to the masses, it could lead to additional downgrades on French debt, thus making problems worse. In Greece, the majority parties won less than 35% of the votes,
giving significant headway to fringe parties. This development, combined with popular sentiment so opposed to necessary austerity measures, has made it increasingly likely that Greece will leave the Eurozone. While the EU can probably survive the exit of Greece, in order to preserve its integrity, it will be critical for the ECB to prevent the default (and exit) of Spain or any of the larger economies. The ECB is the only entity in Europe with the power to save Spain from default – however, the only way to do so is by printing a ton of money, and risking inflation and currency devaluation.[ii]

What all this means for U.S. investors is this: The crisis in Europe is far from over, and we should not be surprised by volatility and uncertainty right now. If European politicians, nervous about losing elections, refuse to make hard budget decisions, Europe’s crisis may deepen and threaten the stability of the euro. It is impossible to know what the future holds for Europe, but with every downside usually comes an
upside somewhere else. We work hard to identify those upsides, and to adjust our clients’ investment strategies where necessary. Thank you for the trust you’ve placed in us.

Weekly Update – May 7, 2012

Last week was a rough one for U.S. stocks. The markets started off the week positive, pushed upward by positive corporate earnings, but retreated the last three days to close at a low point, hammered by a disappointing jobs report and renewed fears about a stuttering economic recovery. The S&P lost 2.44% – its worst weekly performance this year, while the Dow lost 1.44% and the Nasdaq fell 3.68%.^[i]

The week’s sell off began on Wednesday when the latest ADP Employment Report – usually released before the official Labor Department report – suggested that employment had improved by less than expected. The news was confirmed on Friday when the official numbers showed that employers had added
just 115,000 jobs in April, falling well short of the expected 170,000 new jobs. Although the unemployment rate dropped to 8.1%, we can’t get excited about it because the fall is primarily due to job-seekers giving up their job search.  If we see continued slowness in the job market, it is possible that the Federal Reserve will step up efforts to boost the economy again. Since inflation is still well below the danger zone, the Fed still has room to take action.

Solid corporate earnings have provided a breath of fresh air, showing that business is still humming along. First-quarter earnings among companies in the S&P 500 are currently at 7.8%, well ahead of expectations. However, companies are forecasting a much slower second quarter, a sign that executives are bracing for declining sales.^[ii] Analysts believe that a warm March and an early Easter may have shifted sales to March, cutting into second quarter revenues. Please also keep in mind that companies often sandbag their forecasts in order to artificially beat expectations when the official earnings are posted.

Last week’s poor market performance and disappointing jobs report reminds us that our economy and investors nerves are still “recovering.” Just as an injured person who undergoes a major surgery will have good days and bad days while recovering, so our healing economy will experience ups and downs.

Weekly Update – April 30, 2012

The trading week started off slowly as investors absorbed further troubling news
about the state of the global economy: Disappointing manufacturing reports from
China, France, and Germany, plus news that the Netherlands might be heading for
its own fiscal crisis.[i]

Things turned around later in the week though, as domestic equities closed higher on positive news surrounding U.S. corporate earnings. The Dow managed to recoup all its April losses, closing up 1.53% for the week, while the S&P rose 1.80%, and the Nasdaq gained 2.29%. For the moment, corporate earnings are providing a positive counterpoint to lackluster economic news.

The state of our nation’s economy was also in the spotlight last week. Gross
Domestic Product (GDP) grew by 2.2% in the first quarter, down from 3.0% in the
fourth quarter of 2011. The biggest factors in the slowdown were slower
inventory-building by private companies and less defense spending by the
federal government. Thankfully, consumer spending – the largest contributor to
GDP – is still strengthening, which should lead to ongoing improvement in our
overall economic picture.[ii]
In keeping with its upbeat tone, the Fed added 20 basis points to its 2012 GDP forecast, increasing predicted growth to between 2.4%-2.9% this year. The Fed also agreed to keep interest rates between 0.00%-0.25%, and expects inflation to remain below 2.0% for the next two years. During the follow-up press conference, Chairman Ben Bernanke stated that the Fed was still prepared to take an active role in the recovery.[iii]

Unemployment claims continue to remain near a three-month high, indicating that employers have stepped-up layoffs and are reluctant to increase hiring. However,
economists believe that the mild winter distorted first-quarter hiring, making it appear unusually strong. Overall, the economy has continued to add jobs and unemployment is falling well ahead of estimates.[iv]

Regardless of what happens with short-term market movements and news from abroad, we are
grateful to see that the U.S. economy is recovering from the financial crisis better than any other economy in the world right now. This is likely a major reason why we have seen domestic equities performing so well lately – when compared with the rest of the world, U.S. companies are the prettiest girl at the dance. While
there are sure to be bumps in the road ahead, corporate balance sheets are strong, the job market is slowly improving, consumers are still spending, and our economy is chugging along.

ECONOMIC CALENDAR: 

Monday:

Personal Income and Outlays, Chicago PMI, Dallas Fed Mfg. Survey

Tuesday: Motor Vehicle Sales, ISM Mfg. Index, Construction Spending

Wednesday: ADP Employment Report, Factory Orders, EIA Petroleum Status Report

Thursday: Jobless Claims, Productivity and Costs, ISM Non-Mfg. Index

Friday: Employment Situation

Strong corporate earnings caused stocks to rally last week for the first time this
month. The S&P closed up 0.6% for the week, while the Dow closed 1.4%
higher, and the Nasdaq trimmed 0.36%. With no domestic economic reports
released on Friday, traders turned their attention back to lingering concerns over
Europe and China, and markets lost some momentum in afternoon trading. Even so,
last week’s positive earnings reports are alleviating concerns about the
economy and making investors feel more confident about the rallies we’ve seen
this year. With 23% of S&P 500 companies having reported results so far,
more than four out of five have beaten expectations by an average of 8.8%.
Profit growth in this quarter has also been up 6.2%, according to Thomson
Reuters Proprietary Research.[i]

While some analysts are concerned that stocks are poised to repeat their 2010 and
2011 performance – when a mid-year retreat followed an April peak – there are
many differences between the economy of the past two years and today. The 2010
and 2011 pullbacks largely occurred because of recession fears and shocks
created by the Japanese Tsunami, but the U.S. economy is on more solid footing
than at any other time in the recovery. Current indicators point to slow and
steady economic growth, and we have already moved away from index highs. If we
continue to see positive earnings among the nearly 180 S&P 500 components
reporting next week, we may see markets sustain their upward trajectory.[ii]

Investors will also be closely watching Tuesday’s meeting of the Federal Reserve FOMC.
With an optimistic economic outlook and improving jobs situation, it is
unlikely that the Fed will conduct another round of bond purchases. Even so, we
will be monitoring the Fed’s statement on Wednesday, and will be certain to
fill you in on any outstanding developments. I hope you have a great week!

Weekly Update – April, 16 2012

It was a rough one for the stock market last week as major indices closed out their worst session of 2012 on the backof disappointing economic growth in China and renewed fears about debt-ridden
Europe. The S&P fell 2% for the week, while the Dow lost 1.61%, and the Nasdaq closed down 2.25%.

China, the world’s second-largest economy, reported first-quarter growth figures of 8.1%, the weakest rate in nearly three years, and below expectations of 8.3%. Stocks fell sharply on the news, stoking
fears that a weakened Chinese economy could have global implications.[i] Concerns surrounding
Spain’s debt offering next week renewed fears about the European debt crisis, battering bank stocks and dragging down the euro against the dollar.[ii]

On the other hand, domestic indicators continue to provide a positive contrast to global worries. The most recent Beige Book report released by the Federal Reserve shows that the U.S. economy is
improving at a “modest to moderate” pace as solid auto sales, warm weather, and growth in high-tech manufacturing outweighed the effect of high gasoline prices.[iii]

Sales by U.S. wholesalers rose 1.2% in February, and they restocked their inventories at a faster rate in February than January, suggesting they expect a strong spring. Consumer confidence likewise grew in February by the most in seven months. This is especially good news since consumer spending drives nearly 70% of domestic economic activity; if consumers keep spending, the economy will continue to improve.[iv]

Domestically, the U.S. economy really seems to be chugging along, and indicators continue to support a broad recovery. Nevertheless, concerns about the fragile global economy will likely lead to continued
volatility in equity markets. The declines experienced over the last two weeks are not difficult to comprehend in light of the outstanding first quarter performance we experienced. In the weeks ahead, analysts will be examining quarterly earnings reports to determine whether the pullback has been exhausted, or if we should expect continued profit taking.

As always, when short-term declines test your resolve, it is critically important to remain focused on your long term objectives and trust that the portfolio strategy you have in place can weather a few squalls.

Caleb Huftalin – Advisor
Spotlight

Caleb is a one of Catalyst Wealth Managements newest advisors. Caleb is a tremendous asset to Catalyst. He and his wife Stacey and son Levi are building their life and family in Cumming
Georgia. I recently sat down with Caleb to interview him on different aspects
of business life; hopefully you will enjoy getting to know him.

TB: What type of training did you have that led you to become a financial advisor?

CH: I started with a degree in Business Administration and minor in Finance. A few years back, while working as a portfolio analyst with an asset management company, I started the course work to become a CERTIFIEDFINANCIALPLANNER™. But since I have an independent spirit, I realized moving from analyst to building a client base would take too long. I needed some real world relationship building experience first! Over the past several years I’ve garnered the experience and confidence needed by specializing in health insurance for small business owners.

TB: As you entered into this career what is your driving passion or motivation?

CH: What is my “why”? I want people to live and give their biggest life possible. It pains me to see families who generate sufficient income live with fear, limited choices and the inability to enjoy life and give as they want. I’m truly energized by helping people make wise choices that enable confidence in what they have.

How? By walking through a planning process that places emphasis on highest priorities first, families can ultimately enjoy life beginning now! By starting with the why and how, I can easily connect my clients with the best product or solution fit.

The growing, vibrant and profitable business I envision as well as providing for my young family keeps me laser focused on the Why and How!

TB: Has getting started been more or less difficult than you anticipated? What has been the most challenging aspect?

CH: I prepared well by moving into the role at the right time. Through countless conversations with people in the industry and potential clients, I knew the time had come to align with a firm that could provide the tremendous tools and resources needed in our complex financial world. I asked industry professionals how they would build their business model if they started today, and I talked with potential clients about their needs and how I could best meet those.

The almost unlimited, excellent options available to help families with specific planning needs have been challenging to keep up with. Fortunately I overcome that by partnering with other advisors in our firm and asking tons of questions!

TB: Has anything surprised you?

CH: I’m surprised by how open people are to our help. They feel the pressure of complexity and changing economic, legislative and tax environments, and often the trust level I’ve built has been the tipping point to getting a professional planner involved.

TB: What are some other career options that you considered?

CH: At one point I considered portfolio management, and I spent a number of years focused on individual health insurance, but I’ve always been drawn to big-picture personal planning.

TB: Do you establish personal goals? If so, will you share a few?

CH: I establish activity goals based on what produces results in our business and for the people we help. True power comes from tracking activity over time. What you can measure, you can improve! Whether it’s phone calls, appointments, or business miles or revenue, I can generate these numbers on a weekly basis.

TB: Describe your career in 5 years?

CH: As a trusted advisor for a number of families, I’ll be focused on a very defined client profile. Right now I try to narrow the playing field as much as possible, but that will get easier and more intentional over time.

TB: Has being in a group/firm environment been helpful in your career development?

CH: Before joining Catalyst Wealth Management I worked very independently. It’s been a major shift for me, and I’ve truly enjoyed the team environment and tremendous resources provided by being in a group. Learning new lines of business, generating ideas for adding clients and gaining access to a valuable process have made the transition worth it!

TB: Do you often have a chance to share your faith in your business practices?

CH: I love talking about Give, Save, Live priorities with clients. By helping families remove some of the fear and uncertainty, they’re able to more confidently give their time, energy and resources to others.

TB: What advice would you offer to a person considering financial planning as a career?

CH: Talk to a number of advisors who you admire. Most financial professionals enjoy sharing what works and what’s ineffective. Explore the different models to structure your business. When you find a model that provides great support, flexibility and a client focused approach, you’ll enjoy your work!

In conclusion, I think you can see why we are so excited to have Caleb as a part of the Catalyst family. If you would like to learn more about Caleb or meet in person you may follow him on LinkedIn, twitter or contact him directly chuftalin@catalystwealthmanagement.comor call 678-679-6950. Or follow on twitter @calebhuftalin

Weekly Update – March 12, 2012

Three years ago Friday, the Dow Jones Industrial Average saw one
of its darkest days. Closing at its Great Recession low of 6,547, investors
cringed to see how far stocks had fallen from their October 2007 high of
14,164.[i]
Since that day, we’ve experienced one of the greatest three-year runs in the
history of the stock market, superseded only by the dot-com craze of the late
nineties and the recovery from the Great Depression.[ii]

Stocks have returned with remarkable resilience. Between the
“flash crash” of May 2010, the European financial crisis, the downgrade of the
U.S. credit rating by Standard and Poor’s, fear of default by the U.S.
government, high gas prices, and supply disruptions surrounding the Japanese
tsunami, it’s amazing we’ve made it to where we are.

When you look at both the climb we’ve seen and the challenges
we’re facing, it’s not surprising that many analysts are calling for a pullback
in the near future. Even so, stocks managed to hold their own last week. After
a couple of rough days, Wall Street logged three winning sessions on the back
of a better-than-expected employment report. The S&P eked out a gain of
0.1% for the week, while the Dow dropped 0.4%, and the Nasdaq gained 0.4%.[iii]

While Friday’s jobs report was hotly anticipated, the market’s
reaction to it was surprisingly muted. The Labor Department reported that
227,000 new jobs were created while the unemployment rate remained the same as
February’s at 8.3%. If so many new jobs were created, why is the unemployment
rate the same? Well, while new jobs were created, the total number of job-seekers
increased as more people began actively looking for work. When the job market improves,
people who had previously dropped out of the hunt start applying for jobs again,
affecting the unemployment rate. Clearly, while the employment situation is actively
improving, we still have a long way to go.[iv]

Also supporting market performance last week was
news that Greece succeeded in convincing bondholders to swap their old bonds
for new ones valued at much less. In accomplishing this, Greece cleared a major
hurdle to avoiding a disorderly default.

We are living during one of the most interesting
times in history. Each week, as we analyze the stock market and the economy, we
find both positive and negative factors to weigh when making investment
decisions. We strive to do this with diligence and skill. All things
considered, we trust that the same resilience that brought us to Friday will
carry us into the future; even though there are sure to be bumps along the way.

ECONOMIC CALENDAR:

Monday:

Treasury Budget

Tuesday: Retail Sales, Business Inventories, FOMC
Meeting Announcement 2:15 PM EST

Wednesday: Import and Export Prices, EIA
Petroleum Status Report

Thursday: Jobless Claims, Producer
Price Index, Empire State Mfg. Survey, Treasury International Capital, Philadelphia
Fed Survey

Friday:

Consumer Price Index, Industrial Production, Consumer Sentiment

Weekly
Update – March 5, 2012

The S&P 500 and the Nasdaq have been up for eight of the last nine weeks, though mixed economic data
caused a minor decline on Friday. The S&P gained 0.28% andthe Nasdaq rose 0.44%, but
the Dow lost 0.04% for the week. Stocks have been the strongest positive indicator in a slew of mixed information coming at us during the last few weeks. The five-month stock rally has been built on steadily improving economic news and strong underlying fundamentals, though some strategists are calling for a pullback since indexes are hitting new landmarks and the fourth-quarter reporting period is winding to a close.[i]

Exerting some negative pressure on both stocks and the economy, gas prices continued their
march higher this week, reaching a national average of $3.74, according to AAA.[ii] Gas prices have risen more than 8% this year, influenced by ongoing Middle East tensions and a stronger U.S. economy. However, on a positive note, crude oil prices dropped Friday for the first time in days, on news that the U.S. won’t preemptively attack Iran and disrupt oil supplies. While sustained high gas prices are not something we want to see, economists continue to stress that $4 gas is not enough to derail the economic recovery.[iii]

Interestingly, higher gas prices haven’t dampened American enthusiasm for cars. Automakers reported strong sales for February, especially among smaller cars as buyers try to offset increased fuel expenses. Although all makers have not reported February results, analysts expect strong sales of 1.1 million cars and trucks for the month.[iv]

Federal Reserve Chair Ben Bernanke had both encouragement and words of warning for the Senate Banking Committee this week. While expressing that the recovery is not over and that the Fed expects continued growth of 2.2% to 2.7% this year, he also urged politicians to act on key issues. Bernanke expressed that the expiration of the Bush tax cuts, payroll tax increases, and massive federal budget cuts – all coming atthe same time in January 2013 – is a “fiscal cliff” that could threaten the economic recovery.[v] We agree that these lingering political issues could have significant negative consequences if they are not addressed properly. We sincerely hope that the leaders of this nation will act for the common good, and that they will not allow political bickering to get in the way of our ongoing recovery.

ECONOMIC CALENDAR:

Monday: Factory Orders, ISM Non-Mfg. Index

Wednesday: ADP Employment Report,
Productivity and Costs, EIA Petroleum Status Report

Thursday: Jobless Claims

Friday: Employment Situation, International
Trade

HEADLINES:

Traders pushed up the price of Treasury debt after economic data from Europe
brought back fears of a global economic slowdown. Demand for “safe haven”
investments like Treasury bills often goes up on the back of poor economic
news.[vi]

The Institute for Supply Management’s manufacturing index
fell in February to 52.4 from 54.1, a decline well below expectations. All four of the component
indexes also posted declines; however, ISM’s survey chief believes that the declines are part of a generally positive trend of moderate growth.[vii]

New orders for durable goods declined a surprising 4% in
January.

Orders for long-lasting goods like machinery, airplanes, furniture, and appliances dropped after a special business tax treatment expired. While the news could be a sign of weakening manufacturing activity, the durable goods report is notoriously volatile and it is likely one-time factors had a significant impact.[viii]

The Conference Board Consumer Confidence Index rose in February, a significant improvement over January’s performance, and is now close to February 2011 levels. Consumers are more confident about current economic conditions than they were in January, and despite rising gas prices, they are more optimistic about the economic recovery.[ix]

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.