Monument Wealth Management's
"Off the Wall" Blog!

The Federal Open Market Committee (FOMC), the policy-making arm of the Federal Reserve, will conclude its two-day meeting on Wednesday, which will be followed up by a press conference from Fed Chairman Ben Bernanke. There has been a lot of talk of the Fed “tapering” their stimulus back but there are several reasons why we don’t believe there will be any changes this year.  Right now, labor markets are still not strong enough, the financial markets have reacted poorly to Bernanke’s tapering suggestion from a few weeks back, (especially the emerging markets), and inflation is still below the Fed’s desired level and slowing.

Given that May is historically a notoriously bad month in the market, we were happy to see the Standard & Poor’s 500 (S&P 500) index return up over 2% for the month, even with the 40-minute, 1% sell-off on Friday.  In fact, all U.S. equity indices are up solidly year-to-date, all posting a +10% return.

Vanilla Ice – yeah, the guy that spoke to a generation back in 1989. The problem solver.  Not many people know that he published a book called the Vanilla Ice Project Real Estate Guide that was about how to succeed in real estate after he completed a renovation project on his home in Palm Beach.  Master of the one-hit wonder?  I’ll let you decide.

It’s a great line by the Bishop from Caddyshack, and it came to me as I spent some time catching up on market research over the weekend.  The market continues to rally to new highs, but according to a recent survey conducted by Bespoke Investment Group, the number of investors who think the market will be lower in a month is greater than those who think it will be higher.  The major market indices extended their winning streak to four weeks in a row and set new highs in the process, but much like the full run of this current bull market, there seems to be plenty of skepticism. 

I recently went exploring in Hawai’i Volcanoes National Park and came across a part of the lava flow that covered a road along the coast.  I thought this picture I snapped of a surviving road sign was a good lead in to my comments about what happens when everyone expects the worst.  

This is a line from the 1998 movie, The Siege, where a U.S. Senator is contemplating the use of the U.S. Army to track down terrorists in NYC. It’s far from the best line in the movie, especially given the recent events in Boston.  More fitting was the quote from General William Devereaux played by Bruce Willis, “This is the land of opportunity, gentlemen. The opportunity to turn yourselves in.”

It’s an obscure line from A Few Good Men.  It could read “She’s the Stock Market. She’s very pleased to meet you.”

Unfortunately I missed posting a blog last week – I had a few things to tie up from the previous week and was not able to get to it in a timely manner.  I’ll be writing a separate end of the quarter overview and will post a link to it in an upcoming blog.   

The euro-zone miseries have abated thanks to European Central Bank (ECB) efforts, but it’s clear from last week that they have not been solved. The latest flare-up in Cyprus is a reminder that Europe’s banking system still has a number of weak spots. Interestingly, (thankfully?) markets in the U.S. haven’t shown much concern and as of this morning it looks like a bailout has been completed.  So while concerns will likely linger due to undercapitalized euro-zone banks and an ongoing European recession, the promises of increased liquidity from the ECB has bought policy makers more time and has had a calming effect.

Great – March Madness is here.  The annual 64-game NCAA basketball tournament kicks off this week and as a business owner I can assure you I’m losing money on productivity.  In fact, since it’s just not worth fighting, we started our own bracket for charity.  If you’d like to participate, email us and we’ll sign you up.  1^st, 2^nd and 3^rd place winners get $500, $250, $100 to the charity of their choice.