AAM LLC Weekly Wrap for May 7, 2010

May 7 2010

Weekly Market Wrap: An extremely volatile week in the stock market resulted in a loss of 6.5% for the S&P 500.  The S&P 500 finished the week at 1,109 and is now down 1.28% on the year.  Gold and the US Dollar both moved higher on the week, Oil plummeted.  Gold was up almost 3% closing at $1,207 per oz. and the dollar was also about 3% higher at $84.45 against other major world currencies.   Oil dropped 13% at $75.24 per barrel.

Mortgage rates showed further declines this week. The Schwab Bank 15-year rate is now at 4.375% and the 30-year rate is at 5.08%. These rates are as of 5/7/2010 and assume no points, no origination fee and a $250,000 mortgage.

The Week at AAM:

It would be tough to talk about this last week without discussing what happened on Wall Street on Thursday and Friday.  Thursday’s extreme market drop of nearly 1,000 Dow points in a matter of minutes reminds us of the volatility that can be in the market from time to time.  A large part of this move seems to have come from a few mistaken computer clicks.  The rest of the plunge came from some panic, computerized selling programs and some realization that things really are not going well in Greece and that problems there could snowball too many other areas like we saw with the mortgage meltdown.  By the end of the day the market recovered much of its losses but still lost about 350 points on the Dow.

Friday morning the selling continued with another 300 point drop in the morning but again the market rallied to make up half those losses by the end of the day.  All-in-all we lost about 5% in the Dow and S&P over those two days.

Now the question is where do we go from here?  To me my philosophy remains the same.  Monies that my clients are not going to need for a number of years will remain in the market and those dollars they will need sooner we be invested in safer investments.  Whatever happens in the market now (including whatever happened with the trade error and resulting electronic selling) will be fixed and I am confident that the markets will recover and move forward again. 

Hidden in a lot of this were some pretty good signs that the US economy is on the mend and continues to slowly improve.  We are starting to see job gains from the private sector in the job report this week!  That is what is going to get this economy and the markets back on track.

Some of the highlights of my week include:

  • Two new comprehensive plan deliveries to help new clients plan out how to meet their financial goals.
  • A meeting with a new prospect to help them get their estate planning in order.
  • A strategy meeting with another new client to prepare for their financial plan delivery.
  • Opened a 529 plan for a client to start saving for his new nephew’s college education.
  • A lunch at the Texas Roadhouse to benefit Grandville Ambucs and lunch with Grand River Bank to celebrate their first year in business.
  • Meetings with two referral partners to help build both of our businesses.
  • Developed a new newsletter email format and sent out my May newsletter.

I am also finalizing my new logo and am looking forward to rolling it out over the next few weeks. 

Please let me know if there is ever anything I can do for you or if something has changed in your financial situation to warrant a meeting or a change of investment policy.

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