Smart Investing

 

January 6, 2012

January 31, 2014


Starting off 2012 with some good news

Welcome to 2012. Our economy is off to a great start; I’m sure by now you’ve heard that unemployment in the United States has now fallen to 8.5 percent.

I still remember, not too long ago, when the naysayers were predicting that unemployment was going to hit 12 percent; some estimates were even as high as 15 percent. I couldn’t see it because in our economy there is still a lot of cash on the sidelines, $10 trillion plus, and the United States is filled with many smart business people along with a host of entrepreneurs. So, why some knock our country and say the United States is done? Makes no sense to me.

I know there are some out there who will disregard the 8.5 percent unemployment rate, and say that there are some who have dropped off the list of those actively looking for jobs.

I counter by saying that some who are on unemployment do have jobs, which are under the table, and still collect unemployment. There are some who dropped out of the work force or stopped looking for work because they are married and both spouses don’t have to work.

No matter how you slice it, 200,000 jobs were created in December, which includes a drop in government jobs of 12,000, which means the private sector created 212,000 jobs. Trade and transportation saw a 90,000 increase in jobs, followed by an increase of 28,000 in retail jobs, and health-care jobs jumped 23,000, which was the same increase in jobs for manufacturing. It should also be noted that average hourly earnings also climbed month-over-month by 0.2 percent, a 2.4 percent annual rate, and the average work week rose to 34.4 hours from 34.3.

Despite all the good news I’ve been reading in the past few months, and while I remain positive about the economy and investing, I saw a report in a trade publication that financial advisers are more skittish about equities in 2012 than they were in 2011.

About 44 percent of financial advisers, which includes registered investment advisers, stock brokers, financial planners, CPAs and insurance agents, said they will not be adding to their clients' equity positions in 2012. I guess they are not looking at how low valuations are and how well businesses have done in 2011 by buying back stock, increasing dividends, reducing debt and stockpiling cash. Amazingly, nearly 15 percent of financial advisers will be adding to their clients' bonds positions.

I’m not too surprised by this survey, and, yes, I’m fully invested in equities and think 2012 will be a good year. The reason I’m not too surprised is that many financial advisers are readers of the headline news, and, just like anyone else, they become scared when they read the headlines or watch the evening news.

Many also become scared when talking with their clients because their clients read the headlines, so it is easiest for the financial adviser to agree and be on the same side rather than do the extra work, read the fine print, understand what is going on in the economy and educate their clients. Maybe they should read my columns and look at my daily Facebook posts as well.

I remember about a year ago I went to a luncheon put on by a large investment firm, strictly for advisers. These luncheons are usually a way for firms to promote a fund or a special investment they want to promote. This is why I usually don’t go, plus I don’t think they like it when I show up and ask too many tough questions that they would rather not answer.

At this luncheon, they were pushing emerging market investing, and it wasn’t just this company. I have heard many investment firms over the past 24 months telling investors to invest in the emerging markets, the biggest is what is known as the BRICs: Brazil, Russia, India and China.

Once again, after some great run-ups prior to 2010/2011, advisers got in just in time to have their clients receive a 24 percent decline in the BRIC investment.

I’ve been in the investment business for nearly 30 years, and nothing has changed other than I learned not to chase performance. I was not thrilled with the 2011 performance, but understand that every year I can’t make my clients double-digit returns.

What I can do is spend a lot of time reading factual data and information from people like author and market historian John Harris, who notes that since 1928, whenever the S&P 500 total return was roughly flat — anywhere from a plus or minus 5 percent (which has happened only nine times since 1920) — the following year the market was up an average of 26.3 percent. Based on low valuations, an improving economy and low interest rates, 2012 could be a very good investment year.



Wilsey is president of Wilsey Asset Management and can be heard every Saturday at 8 a.m. on KFMB AM760. Information is provided by Reuters.


 

January 6, 2012

January 31, 2014

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Upcoming Events

Gunmetal Blues, the Musical

Sat, Jan 31
North Coast Repertory Theatre
Solana Beach
San Diego Premier! Music and lyrics by Craig Bohmler and Marion Adler. Directed by Andrew Barnicle.

USD Toreros vs. San Francisco

Sat, Jan 31
USD, Jenny Craig Pavilion Home Court
San Diego
#GoGetIt - Call the Torero ticket office today to secure your tickets to all USD Athletic events. Always stay connected with the Toreros on Facebook (USD Athletics), Instagram (USD Toreros) and Twitter (@USD Toreros).

The Darrell Hammond Project

Sat, Jan 31
Sheila and Hughes Potiker Theatre
La Jolla
The Darrell Hammond Project, based on Hammondís acclaimed memoir, God, If Youíre Not Up There, Iím F*cked: Tales of Stand-Up, Saturday Night Live and Other Mind-Altering Mayhem, invites the audience on a heartbreaking and hilarious journey inside the life and mind of an American comic genius, trying to unravel the mystery of how a man repeatedly climbed out from the depths of despair to become a world-class comedian.

Murder For Two

Sat, Jan 31
The Old Globe Theater
San Diego
The Old Globe today announced the full cast and creative team for Murder for Two, with book and music by Joe Kinosian and book and lyrics by Kellen Blair. Globe veteran Scott Schwartz (A Room with a View at the Globe, The Hunchback of Notre Dame at La Jolla Playhouse) returns to direct Blair and Kinosianís Off Broadway hit, a vaudevillian mystery musical with an energetic two-man cast. Great American novelist Arthur Whitney has been murdered at his own birthday party, and his killer could be any one of the guests. But this is no ordinary murder mystery. The entire world of this hilarious musical is brought to life by two incredible performers: one plays the detective, the other plays all 10 suspects, and both play the piano! Murder for Two is an irrepressibly wacky tour-de-force musical that NewYork1 dubbed ďa must-see 90-minute jolt of caffeinated creativity!Ē

C.S. Lewis On Stage

Sat, Jan 31
Lambs Players Theatre
Coronado
Award-winning actor Tom Key in a fascinating look into the wit, wisdom and work of one of the 20th Century's most engaging thinkiners and hugely popular writers.


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