Dave Rumsey, CPA/IAR | Pettis Rumsey Inc. P.S. | 4229 76th St. NE, Suite 102 Marysville, WA 98270 | Phone: 360-659-8502

       

 

 

David Rumsey, CPA

Pettis Rumsey Inc.

 

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Although I don't mention it often to clients, in addition to Accounting & Tax services I also provide Financial Planning & Asset Management services for those of you who have investments.  As a registered IAR (Investment Advisor Representative) I also watch the "markets" and give you my insight on what's happening and how it might affect your investments.  I hope you enjoy it!  David

 

Cloudy Cloudy Crystal Ball, Can You See The Future?

 

If you have been watching the talk shows, everyone including big bird on Sesame Street has a crystal ball.

 

They all know what is going to happen if we pass a budget and raise the debt limit. Of course they all know what will happen if we do not.

 

Everyone who has 5 minutes or less on TV now claims to tell you what is going to happen.  Well no one knows for certain, but 70% of the companies reporting earnings so far this quarter are exceeding expectations. This will ultimately bode well for the market.

 

If everyone in the world was truly worried about an actual default, not just a politician saying there will be one to scare you to their way of thinking, then the market would have dropped 75 points on the S&P and rates would have gone up 1/2%. Neither has happened yet, so I suspect it does not happen.

 

Just remember some of the prognostications in 2008. The market would go to 400 on the S&P, oil will be above $200 a barrel, etc. in 1979, business week reported the "death of equities (stocks)". Wow, we are up about 1000% since that came out. Ignore the snake oil salesman and the latest elixir.

 

These guys went out of business time and time again, because they put all their bets in one traveling coach. Make sure your portfolio bears the risk you can withstand and is diversified.

 

I will say that if they do nothing, the market will react negatively and get us to that 1280 level again before moving higher, but it will be a temporary set back. Ultimately, the dollar will continue to move lower.

 

Everyone in the world knows what is going on in the US and the markets worldwide have still not fallen off a cliff. That tells me the bulk of the worry is overdone. It will probably rise and then fall once they do announce something, because some will not like the outcome.

 

Earnings this quarter are still on track to be the best since 2007 prior to the downturn, yet the market is still trading at a discount to those levels and appropriately so. In fact, many companies have raised guidance.

 

The markets are still trading at a bit of a discount to historical levels, so I still see upside from here, barring a major meltdown from the budget crisis. I will continue to diligently watch for any signs of change and we will keep you up to date.

 


 

As always you can call our offices if you have any questions about investing, retirement or any other tax & accounting related issues, at 360-659-8502. 

 

Regards, David Rumsey, CPA/IAR

 

Disclaimer:  The opinions contained herein are not intended to be investment advice or a solicitation to buy or sell any securities. With any investment you should carefully consider the investment objectives, potential risks, management fees, and charges and expenses before investing.  Past performance is not a guarantee of future results. The investment return and principle value of any investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

 

 

Dave Rumsey, CPA/IAR | Pettis Rumsey Inc. P.S. | 4229 76th St. NE, Suite 102 Marysville, WA 98270 | Phone: 360-659-8502 | Fax: 360-653-4019 david@pettisrumseycpa.com | www.PettisRumseyCPA.com