peak-market commentary 04-15-13 paa

7/28/2019 PEAK-Market Commentary 04-15-13 PAA

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Lance A. Browning

Founding Partner, SVP

Income Solutions Wealth Management

3200 Troup Highway, Suite 150

Tyler, Texas 75701

855-428-3512 Toll Free

903-787-8916 Direct

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Please visit us at:www.LanceBrowning.com

Weekly Market Commentary

April 15, 2013

The Markets

Last week, the term Easy Money conjured both comedian Rodney Dangerfield and the U.S.

Federal Reserve, and no one was certain how much respect either one should get.

The Fed accidentally e-mailed its market-moving Federal Open Market Committee (FOMC)

meeting minutes to congressional staffers and trade lobbyists on Tuesday at 2 p.m. The minuteswerent supposed to be released to anyone until Wednesday at two. Once the mistake was realized,

the Fed released the minutes early on Wednesday morning.

Markets enthusiastically embraced the minutes which appeared to focus on the idea quantitative

easing will continue. The Dow Jones Industrial Average closed at a record high more than oncelast week, and the Standard & Poors 500 Index is already nearing analysts targets for the full

year.

The minutes indicated committee members were less clear on the issue, according to the

Washington Post, which reported:

A few Fed officials think QE (Quantitative Easing) should be stopped immediately; a few

think it should be shrunk fairly soon; many think it should be slowed if we see a
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rebounding job market; a few think it should continue at its current size until the end of the

year; and a couple think it may need to be increased. The minutes also make clear Fed

officials are not all on the same page in determining the economic climate that wouldtrigger that tapering.

Committee members are not the only ones who dont know what to think about the economy.

Consumer sentiment has been volatile. According to The Wall Street Journal, the Thomson-Reuters/University of Michigan consumer sentiment index showed consumer sentiment improved

significantly from mid- to late-March only to decline again from late-March to mid-April.

Bloomberg.com speculated weaker consumer sentiment may have been the result of the payrolltax roll and weaker U.S. economic data.

IT HAS BEEN SAID STOCK MARKET RETURNS REVERT TO THE MEAN,but whatdoes that mean? Reversion to the mean is a sta tistical phenomenon. Its the idea the further

something is from the meanor averagethe more likely it is the next thing that comes along

will be closer to the mean. For example, if a baseball player has a batting average of .330 and hits

.180 in a game, its likely that player will hit better in the next game (unless, the players in a

slump, but that is a different topic).

Reversion to the mean is the theory behind a variety of investment strategies. Analysts whoemploy the theory may look at an average price, an average return, or another financial statistic

they find relevant. For example, they may consider whether a companys recent performance

varies significantly from its historical average performance. If its performance is worse than

average, some analysts may decide the companys price is likely to revert to the mean. In thatcase, they may choose to invest in the company. Ifthe companys performance is better than

average, analysts may decide to sell shares. Similarly, if a market or indexsuch as the U.S.

Treasury market or the Standard & Poors 500 Indexperforms significantly worse than its mean,investors may decide better performance is ahead, and vice versa.

In 2009, an article in Forbes stated, Mean reversion is an odd concept because it's clearly not

causal. The market's historic return of 9 percent a year is based on over 100 years of data (what'stypically considered the modern stock market), and, of course, the ride to 9 percent is a bumpy one

with major double-digit up years and big double-digit down years all averaging to that 9 percent

number. The point is any average is a moving target. After all, a significant downward movementpushes the historical mean lower and a significant upward shift pushes it higher.

Regardless of the investment theories employed by analysts and money managers, investors maywant to set financial goals, carefully choose asset allocation strategies, hold well-diversified

portfolios, and maintain their long-term perspective.

Weekly FocusThink About It

Thousands of candles can be lighted from a single candle, and the life of the candle will not be

shortened. Happiness never decreases by being shared.--Buddha

Best regards,


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Lance A. Browning

Ali Cantua

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Securities offered through LPL, Member FINRA/SIPC.

* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with thenamed broker/dealer.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be

representative of the stock market in general.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the

U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmarkfor the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion MarketAssociation.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodityfutures market. The Index is composed of futures contracts on 19 physical commodities and was launchedon July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of theReal Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specificperiods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to

predict future performance.

* Past performance does not guarantee future results.

* You cannot invest directly in an index.

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Sources:

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/10/oops-fed-minutes-inadvertently-released-early-show-a-divided-fomc/
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/10/oops-fed-minutes-inadvertently-released-early-show-a-divided-fomc/http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/10/oops-fed-minutes-inadvertently-released-early-show-a-divided-fomc/http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/10/oops-fed-minutes-inadvertently-released-early-show-a-divided-fomc/http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/10/oops-fed-minutes-inadvertently-released-early-show-a-divided-fomc/http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/10/oops-fed-minutes-inadvertently-released-early-show-a-divided-fomc/


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http://www.foxbusiness.com/industries/2013/04/10/fed-inadvertently-releases-fomc-minutes-to-banks-others-prematurely/

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13?siteid=yhoof2http://blogs.wsj.com/economics/2013/04/12/consumer-sentiment-at-lowest-level-since-july-2012/

http://www.bloomberg.com/news/2013-04-12/michigan-consumer-sentiment-declined-in-april-to-nine-month-low.htmlhttp://mathworld.wolfram.com/ReversiontotheMean.html http://www.investopedia.com/terms/m/meanreversion.asp http://www.forbes.com/2009/01/08/intelligent-investing-mean-reversion-indexing-panelJan9.html http://www.brainyquote.com/quotes/authors/b/buddha.html#bZoCEd41fpvTO4rQ.99
http://www.foxbusiness.com/industries/2013/04/10/fed-inadvertently-releases-fomc-minutes-to-banks-others-prematurely/http://www.foxbusiness.com/industries/2013/04/10/fed-inadvertently-releases-fomc-minutes-to-banks-others-prematurely/http://www.foxbusiness.com/industries/2013/04/10/fed-inadvertently-releases-fomc-minutes-to-banks-others-prematurely/http://www.bloomberg.com/news/2013-04-10/u-s-stock-futures-advance-before-budget-fed-minutes.htmlhttp://www.bloomberg.com/news/2013-04-10/u-s-stock-futures-advance-before-budget-fed-minutes.htmlhttp://www.marketwatch.com/story/fearless-investors-buy-rally-as-earnings-ramp-up-2013-04-13?siteid=yhoof2http://www.marketwatch.com/story/fearless-investors-buy-rally-as-earnings-ramp-up-2013-04-13?siteid=yhoof2http://www.marketwatch.com/story/fearless-investors-buy-rally-as-earnings-ramp-up-2013-04-13?siteid=yhoof2http://blogs.wsj.com/economics/2013/04/12/consumer-sentiment-at-lowest-level-since-july-2012/http://blogs.wsj.com/economics/2013/04/12/consumer-sentiment-at-lowest-level-since-july-2012/http://www.bloomberg.com/news/2013-04-12/michigan-consumer-sentiment-declined-in-april-to-nine-month-low.htmlhttp://www.bloomberg.com/news/2013-04-12/michigan-consumer-sentiment-declined-in-april-to-nine-month-low.htmlhttp://www.bloomberg.com/news/2013-04-12/michigan-consumer-sentiment-declined-in-april-to-nine-month-low.htmlhttp://mathworld.wolfram.com/ReversiontotheMean.htmlhttp://mathworld.wolfram.com/ReversiontotheMean.htmlhttp://www.investopedia.com/terms/m/meanreversion.asphttp://www.investopedia.com/terms/m/meanreversion.asphttp://www.forbes.com/2009/01/08/intelligent-investing-mean-reversion-indexing-panelJan9.htmlhttp://www.forbes.com/2009/01/08/intelligent-investing-mean-reversion-indexing-panelJan9.htmlhttp://www.brainyquote.com/quotes/authors/b/buddha.html#bZoCEd41fpvTO4rQ.99http://www.brainyquote.com/quotes/authors/b/buddha.html#bZoCEd41fpvTO4rQ.99http://www.brainyquote.com/quotes/authors/b/buddha.html#bZoCEd41fpvTO4rQ.99http://www.forbes.com/2009/01/08/intelligent-investing-mean-reversion-indexing-panelJan9.htmlhttp://www.investopedia.com/terms/m/meanreversion.asphttp://mathworld.wolfram.com/ReversiontotheMean.htmlhttp://www.bloomberg.com/news/2013-04-12/michigan-consumer-sentiment-declined-in-april-to-nine-month-low.htmlhttp://www.bloomberg.com/news/2013-04-12/michigan-consumer-sentiment-declined-in-april-to-nine-month-low.htmlhttp://blogs.wsj.com/economics/2013/04/12/consumer-sentiment-at-lowest-level-since-july-2012/http://www.marketwatch.com/story/fearless-investors-buy-rally-as-earnings-ramp-up-2013-04-13?siteid=yhoof2http://www.marketwatch.com/story/fearless-investors-buy-rally-as-earnings-ramp-up-2013-04-13?siteid=yhoof2http://www.bloomberg.com/news/2013-04-10/u-s-stock-futures-advance-before-budget-fed-minutes.htmlhttp://www.foxbusiness.com/industries/2013/04/10/fed-inadvertently-releases-fomc-minutes-to-banks-others-prematurely/http://www.foxbusiness.com/industries/2013/04/10/fed-inadvertently-releases-fomc-minutes-to-banks-others-prematurely/

peak-market commentary 04-15-13 paa

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