Security Asset Management, LLC

 MARMMARKET  INSIGHTS– May 17, 2012   -  THIS TIME IT’S DIFFERENT, we  hope!

The stock markets started 2012 up like a rocket and our accounts soared ahead of their indexes.  Then like a roman candle on the 4^th of July the flame turned down and faded out as stocks now continue to fall.  The market made a similar pattern in 2010 and 2011 except the declines started the first day of May.  This year stock indexes started down the first day of April. At first it was not worrisome because after each losing day we had an up day to follow. But now the Dow Jones has declined 11 out of 12 days.  Our last Insights stated the S&P500 index might fall to 1343 before it turned up again. We also said that if S&P500 support at 1343 did not hold, it could fall all the way to 1285.  To help that scenario along, news of a two or three billion dollar hedging loss at JP Morgan Chase and the socialist party taking office in Greece smacked the bull market head on..  That’s weird.  It is socialism that created these serious problems in Greece in the first place. The Socialist party rhetoric has caused a ‘run on the banks’ in Greece.  Socialism is also killing our economy, halting job creation, killing hopes for an economic rebound,  causing unprecedented deficits, and wants to raise taxes on the 50% of Americans who pay federal taxes.  However it seems O’Bama is more concerned about us all learning a new definition of marriage instead of fixing the economy.  Where is the phrase "It's the economy stupid" when you need it?

Are you ready for the new bull market?  Yes.  We have built significant cash and hedges to buy low again.  During 2010 and 2011 the market declines lasted five months. We said in the April Insights, “Don’t be surprised if stocks go UP, UP and Away like Superman.” It is likely that we must get past the June 17^th elections in Greece before a new bull market gets going strongly. Bargains are everywhere but buyers are not in the mood to shop.  Gold is down 20%, Apple is down 15%, even conservative stocks in general are down over 10%, oil is down 18%, and industrial stocks down 20%.  Eventually these great bargains will wake up the Bull.  Our current market decline is very typical for the month of May in an election year after which it is normally “off to the races” for stocks.    In order for America to not end up like Greece, Tax and Spend must end for the economy to mend.  Hey, that's a catchy phrase too.  - BB

OFFENSE, DEFENSE - A winning strategy.

As a fee only investment advisor firm, our success is directly dependent on our client's success.   Unlike mutual funds which in the past have been slow to adjust to the highly volatile changes in  the markets, our ability to quickly become more defensive or offensive during these times is a method wherein we attempt to provide our clients a more favorable long term outcome.

What about the future?   “The coming decade will witness a radical transformation of the American economy, marked by rising inflation, higher interest rates, and soaring commodity prices, coupled with a weakening dollar; declining markets in stocks, bonds, and real estate, and recession….and the economy will have to return to its traditional roots of saving and producing rather than borrowing and consuming....On the other hand, running concurrently and spurred by tremendous demand from China, India, (and others), there is and will continue to be a worldwide secular bull market in agricultural, natural resources, precious metals, and other commodities.- Peter Shiff"  These statements were proven to be true in the most recent years. Finding the right opportunities, and avoiding as much of the major down turns in the markets as possible, will continue to be the focus of active managers as we continue to deal with a continuing 'financial crisis' world. - William Barnett

Put  the feeling of security back in securities investing.  Contact us for more info.  Call us at 479.936.8650 or email feeonlyman@gmail.com.  Comments on feeonlyman.com are not an offering for any investment nor are they to be considered investment recommendations for anyone.  They represent only the opinions of the author.  Any views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest, and in no way represent a testimony of anyone associated with Security Asset Management, LLC.