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Money Manager Monthly
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WrapManager.com | Contact Us
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June 2011
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 | Latest Report
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Don't Make This Mistake!
Chasing performance can derail long-term financial plans and hurt your ability to reach your goals.
We'll illustrate this concept using Churchill Management Group as an example.
Click Here To Download the Report
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MARKET COMMENTARY
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Stock Market Correction Coming Soon?
By Gabriel F. Burczyk, President & Chairman of the Investment Policy Committee
 A
correction of more than 10% on the S&P 500 this year is not only
possible, it's probable. I believe a decline in the market could create a
buying opportunity for equity investors. With a small 6% pullback in
March, we have yet to see an intra-year correction which usually occurs.
WrapManager's Investment
Policy Committee believes these next few weeks or months could produce
some excellent buying opportunities and equity investors may want to be
ready when they arrive.
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MONEY MANAGER COMMENTARY
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Economic Issues Heading into Summer
 Weird Science and the Concept of Value
In
his latest must read commentary, Chief Investment Officer David Iben at
money manager Tradewinds discusses the concept of money and its use
throughout history. "When discounting future cash flows, the "value" of
that cash at the time it is received in the future should be in the
forefront of peoples' minds. Fiat currencies and bonds are somebody's
liability. Governments' ability to make good on these obligations is
imperative. In light of the current, precarious situation of most
issuers of paper currency and sovereign bonds, Tradewinds prefers to own
good business franchises and tangible wealth."
Click Here for the Full Tradewinds Commentary
 Disappointing Data Should Be Temporary
This
week's commentary from BlackRock focuses on the series of recent
disappointing economic reports and ultimately concludes the economic
forecast will be largely dependent on the jobs market. "In retrospect, a
disappointing data set should not have been that surprising given the
weaker data we have seen over the past month. There has clearly been a
soft patch in economic performance this spring, and as such, the
employment growth rate is slowing rather than accelerating."
Click Here for BlackRock's Commentary
 Important Perspectives on Inflation
Chief
Macro Strategist at Wells Fargo, Gary Thayer, looks at the history of
inflation and the total increase in consumer prices per decade. "As
consumers we know that prices of most goods and services go up over
time. However, the rate of increase is not uniform. Prices sometimes go
up fast. Other times they go up slow. Investors need to take inflation
into account when anticipating both the performance and purchasing power
of their portfolios over time."
Click Here for Wells Fargo's Full Commentary
 Dancing on the Debt Ceiling
Money
manager Lord Abbett compares the reaction of the market to the reaction
of the media in the ongoing debt ceiling issue. "Market opinion, though
neither Democrat nor Republican, clearly wants long-term deficit
reduction plans and so would welcome any compromise that began to tackle
the issue much more than it would a simple debt ceiling increase.
Perhaps it is such an expectation that also explains market calm in the
face of the inflammatory language used in the media and in Washington."
Click Here for Lord Abbett's Full Commentary
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FINANCIAL TIDBIT
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Quantitative Easing Basics
You've probably noticed
the media surrounding Quantitative Easing over the last few months.
Expect this to increase as the Federal Reserve's second version of
Quantitative Easing comes to a close on June 30th. Here are the basics.
Quantitative Easing,
also known as "QE" and "QE2", is an attempt by the Federal Reserve to
spur growth by injecting money into the economy and keep long-term
interest rates low. The Fed's primary way of doing this has been to
purchase US Treasury Bonds. This helps keep interest rates low and
increases bank reserves, which increases bank's ability to lend, leading
to increased business investment. Think of it as the Fed's way of
getting the economy going when it's weak.
It's also crucial to
know when to "put on the brakes" as the economy gets back on its own two
feet. Fed Chairman Ben Bernanke has decided to stop increasing support
on June 30th, but will maintain the level of support that has
accumulated since the beginning of the Quantitative Easing program.
Slowly winding down the program will hopefully avoid economic shocks
that could occur if the stimulus was withdrawn immediately.
Source: MIT, InvestmentNews |
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The
attached report and information have been prepared or produced by
WrapManager, Inc. from sources and data believed to be reliable.
Information provided in this report is for educational and illustrative
purposes only and should not be construed as individualized investment
advice, as an offer to sell, or the solicitation of an offer to buy any
security in any states where such an offer or solicitation would be
prohibited by regulations. WrapManager, Inc. is not a tax advisory firm.
We recommend you contact your tax attorney or CPA prior to utilizing
any of the tax-related strategies mentioned or discussed. Returns and
experiences will vary for each client. Each client's risk tolerance and
investment objectives are unique to them. Past performance may not be
indicative of future results. No assumption that future performance of
any specific investment or product made reference to directly by
WrapManager, Inc., on its Web site and in marketing materials, will be
profitable or equal the corresponding indicated performance level(s). If
performance numbers are generated gross of fees, a client's return will
be reduced by investment advisory fees and any other expenses. Opinions
expressed are those of WrapManager, Inc. and are subject to change
without notice and are not necessarily those of Prospera Financial
Services, Inc., its directors, parent company or its affiliates.
Securities offered through Prospera Financial Services and cleared
through First Clearing, LLC. Prospera Financial Services - Member
FINRA/SIPC. © 2011 WrapManager, Inc. (800) 541-7774 | info@wrapmanager.com | www.WrapManager.com |
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