Expansion and Volatility, Dividend Income Strategy, Millionaires in America

	Money Manager Monthly	WrapManager.com \| Contact Us
		June 2010

	In This Issue
	Expansion and Volatility Seeing Through the Noise Millionaires in America

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	High-Dividend Equity Strategy Want to reduce your portfolio's downside and potentially increase the income generated? A dividend strategy can provide stability and enhance total return, critical for those portfolios built to finance retirement and other long-term goals. Federated Investors is one of our recommended money managers that specializes in dividend paying stocks. Their dividend yield as of 3/31/2010 was 5.20%. Click the link below to find out how "high-yielding stocks can potentially boost performance and actually lower risk in certain portfolios." Download Federated's Dividend Report»

	Investment Quiz

	1. Approximately how much has the SP500 rallied since its 2009 lows (as of 5/21/2010)? a) 22% b) 127% c) 57% d) 83% 2. Approximately how much is the SP500 down since April 26th, 2010 (As of 5/25/2010)? a) It's not down b) 23% c) 5% d) 12% 3. What was the official first quarter GDP for the United States? a) -0.6% b) 1.4% c) 3.0% d) 0.5% 4. Consumer confidence hit an all time low at 25.3 in February 2009. What was that number on May 25, 2010? a) 31.5 b) 96.3 c) 63.3 d) 45.0 Answers: 1. d) 83% 2. d) 12% 3. c) 3.0% 4. c) 63.3 Sources: Federated Investors - Orlando's Outlook: This Too Shall Pass (May 21, 2010), The Conference Board, U.S. Department of Commerce

MARKET COMMENTARY

Expansion and Volatility

By Michael J. O'Connor, Executive Vice President

Michael J. O'Connor In case I haven't spoken to you already, it is my privilege to introduce myself to you now in the context of our monthly newsletter. A couple of months have already passed since I joined WrapManager, though it feels like I've been here much longer (in a good way). My name is Mike O'Connor and I've joined the firm as Executive Vice President with responsibilities of overseeing our investment and advisory teams. I was brought in to not only maintain the high level of service and financial advice that you have come to expect from WrapManager but to build on that foundation and improve the experience that you, our valued clients, have with our firm.

Some of my past experience includes...

MONEY MANAGER COMMENTARY

Seeing Through the Noise

Recovery Not as Strong, but Economy Still Growing
Investors continue to worry that the global economy is slowing down after a year of recovery from recession. However, the economic data still looks much better than it did when the economy was falling into recession in 2008. The economy is growing now. It was contracting then. The difference is investors are disappointed that the recovery is not as strong as it could be, if many countries were not dealing with big government debt problems. Nonetheless, the global economy is still growing; it's just not growing at a robust pace.
Click here for the Full Update

Balance the News and Clear the Noise
North Korea, oil spills, flash crash, Spanish banks, Thai riots, Germany's expanded naked selling ban, financial reforms, a 15% correction in a short period - am I forgetting anything? Before the mid-week rally, the market was at its deepest oversold condition since its March '09 lows on all the above-mentioned worries. This really isn't all that unusual. Morgan Stanley says a study of 19 cyclical bulls within secular bear markets saw a 25% correction after an initial rally of 71% off their cycle lows. Might this be a refreshing correction before a year-end rally? Interestingly, RBC cites a 100-year study with a 4-year cycle reset, which would indicate potential cycle lows toward the end of Q3 and early Q4. That would be good.
Click here for Federated's Full Update

Don't Let Short Term Turn You Into a "Bear"
The significant investment decision of the moment is to not allow the "Secular" to overwhelm the "Cyclical" and turn you from a "Bull" to a "Bear" when investing in the current market. While the economic news coming from the popular financial press continues to be bleak, in April the United States stock market was up for the twelfth time in the past fourteen months. How can that be? For a number of years we have communicated our research studies on two types of Stock Market cycles that impact the risks for investors, the "Secular" (longer term, 30 to 40 years) and the "Cyclical" (shorter term, 3 to 5 years).
Click here for Churchill's Full May Commentary

The Weak Recovery We Have Been Expecting
In fits and starts, the economy continues to rebound from the credit crisis and the worst recession since the Great Depression. Manufacturing is up, consumers have begun to shop again, and businesses are starting to spend again on technology. But some hurdles remain. The housing market continues to struggle, and banks are still reluctant to lend. Job creation remains anemic, though not abnormally so at this stage of recovery. More important are risks arising from the public sector. Uncertainty created by the prospect of healthcare reform legislation has continued despite passage of the bill, making employers even more reluctant to hire. Skepticism about promised cost savings has added to growing anxieties about the country's fiscal condition and about the market for the Treasury securities. Midterm congressional elections, therefore, loom large as a key to the economy's future.
Click here for Lord Abbett's Complete 2nd Quarter Outlook

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HNW INVESTOR TRENDS

Millionaires in America

The 11th annual Phoenix Wealth Survey released in April 2010 found that millionaires in America are feeling better about the economy and their financial futures. However, they have not returned to pre-2009 levels. Retirement security, specifically paying for health care, saw an increase in concern along with the possibility of running out of money in retirement and protecting lifestyles. Overall, the survey indicates a cautiously optimistic attitude towards the economy and recovery. Here are more results of the survey:

52 percent feel less wealthy compared to last year, versus 74 percent in 2009.
28 percent are either "very" or "fairly" pessimistic about the future of the economy, down from 40 percent in the first quarter of 2009.
44 percent have a written financial plan (an all time high), versus 39 percent in 2009.
79 percent receive professional financial advice, up from 73 percent last year.

Source: The Phoenix Companies, Inc.

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