Recap of this week’s update:

  1.  Be sure to call and book your year-end review time as soon as possible if you have not already done so.  We are starting to schedule times for private meetings/calls for the month of February.
  2. The U.S. stock indices trade back and forth so far in 2014 and are basically now flat in 2014.  Bond prices have increased (yields lower), with gold/silver prices rising to date.  Average 30 year fixed rate mortgage now at 4.39%. (
  3. Our portfolios remained underweighted in stocks/equities for all risks and our longer term outlook is unchanged.  
  4. Economic data still mixed and mediocre at best as we finished out 2013.  Corporate earnings will be key as to the direction of the stock markets moving forward and FED actions to be watched closely.

 Year-End Reviews

Be sure to call and set up a time that is convenient for you for a year-end review and planning session if you have not already done so this quarter.  We are now setting up our February calendar, but do have a few times still available for the end of this month.  Be sure to call today!  We want to review 2013 as well as look ahead as to the strategies in place for 2014 within our various risk levels.

 The Markets and the Economy

The economic recovery officially began in July 2009 (National Bureau of Economic Research, the official arbiter of recessions and recoveries). By historical standards, progress has been slow and uneven.  We’re well into year 5 of the expansion, and the total number of jobs has yet to reach the level seen prior to the start of the Great Recession (BLS data).  The major U.S. stock indices have started off the year in an up/down pattern, and are basically flat to slightly down so far in 2014 as of this date.  Bond prices have moved higher (yields lower), and gold/silver prices have inched upward since the beginning of the year.  The average rate for a 30 year fixed rate mortgage now stands at 4.39% compared with 4.42% last week. (

Our outlook remains the same-stock prices look to be overvalued and we expect a correction in this market of some type at any time moving forward.  We continue to be underweighted in stocks/equities in our portfolios for all risk levels and hold positions in both the fixed income and alternative asset categories.

We haven’t been shy about discussing employment and the low interest rate policy the Fed has prescribed as a cure. Still, the effectiveness of Fed policy has been mixed a best, and consumers have yet to return to their carefree ways.

Consumer spending does account for nearly 70% of the total economy, per data offered by the Bureau of Economic Analysis. And the reluctance to spend has played a role in the subpar recovery.

Please see Figure 1, which highlights the yearly change in retail sales. Outside of autos, retail sales have been adequate at best.


In 2011, retail sales came in at a respectable 6.2% but slowed to 4.1% by 2013. Sales excluding autos and gasoline stations (removing gasoline stations helps to filter out changes in gasoline prices), or so-called ‘core sales,’ reveals a somewhat similar scenario.

Causes? Well, we could cite everything from slow job and income growth to cautious bank lending policies. But let’s look at consumer confidence.


Please see Figure 2. Consumer confidence has been on a very gradual and uneven march higher, but it has yet to return to the levels see prior to the recession.

Looking ahead

Fourth quarter earnings season significantly ramps up over the next couple of weeks. It’s still early in the season as just 10% of S&P 500 companies have reported, but it’s been a mixed start (S&P Dow Jones Indices).  The next FED meeting will be a two day meeting on January 28th and 29th with the new head of the Federal Reserve Janel Yellen in charge.

Have a great week!

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.

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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly.  Past performance does not guarantee future results.

3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly.  Past performance does not guarantee future results.