Solis Wealth Management Report – February 18, 2014

The Markets
With the enthusiasm of new love, American stock markets pushed higher during Valentine’s week.
Were investors enamored with the Federal Reserve’s new Chairwoman, Janet Yellen, who spoke on behalf of the Fed for the first time last week? Some suggested investors appreciated her dedication – she spent almost six hours answering questions from members of the Financial Services Committee – and were soothed by her commitment to continuing the policies of her predecessor. The New York Times said stock markets rose as a result of Ms. Yellen’s testimony and were further buoyed when the House voted to raise the government’s borrowing limit until March 2015 without any conditions.
Perhaps investors saw the good in employment numbers that were released recently. An analyst quoted in Barron’s said the American labor market “just might be tighter than most of us expected.” His argument was while long-term unemployment remains high, “…2.5 percent, higher than peaks seen in prior recessions, and much worse than the 50-year average of 1.1 percent,” the short-term jobless rate (measuring people who are out of work briefly) is 4.2 percent which is below the 50-year average of 5 percent. The article shared the thoughts of another expert, Michael Darda of MKM Partners:
“If our job market can mend even when gross domestic product (GDP) growth averaged a lousy 2.4%, what happens if growth picks up? Last week, Treasury data showed the federal fiscal deficit shrinking to just 3% of GDP from more than 10% four years ago thanks to higher taxes and restrained government spending. At this pace, our budget deficit could fall to zero next year, and we could run a surplus by 2016.”
Tarnishing this shiny outlook is the fact 36 percent of Americans who want a job and can’t find one have been unemployed for more than 27 weeks.
Maybe it was an unrequited desire for better weather. Huge swathes of the United States have been gripped by snow, ice storms, and freezing weather which Reuters.com suggested caused many investors to discount weak economic reports in the belief consumer spending and the company performance might have been stronger if weather conditions had been more favorable.

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
HOW MANY HOURS DO YOU WORK EACH WEEK? It’s a topic that has garnered significant interest for some time. In 1930, British economist John Maynard Keynes wrote:
“For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich to-day, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavor to spread the bread thin on the butter – to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!”
If you’re a hard-driving, competitive person who logs well over 40 hours of work each week in pursuit of higher earnings, plum promotions, and peer respect, Keynes’ predictions may be mystifying, not to mention unrealized.
While it’s true that Keynes’ expectations for the future haven’t panned out (he also anticipated accumulation of wealth would lose social importance resulting in a changed moral code), the average work week did get shorter in many developed countries between 1990 and 2012. It’s interesting to note, as The Economist pointed out, more productive and better-paid workers often put in less time at the office. The publication offered this example:
“The Greeks are some of the most hardworking in the OECD (Organization for Economic Cooperation and Development), putting in over 2,000 hours a year on average. Germans, on the other hand, are comparative slackers, working about 1,400 hours each year. But German productivity is about 70% higher.”
When it comes to hours worked, America is an aberration relative to other developed nations. We’re highly productive and we tend to work longer hours.
What’s happening at Solis Wealth Management?
Please enjoy this week’s commentary from ~ Tami Salzer, LPL Registered Administrative Associate
I can’t believe how fast life is passing by; I have never realized the pace until now.  It seems as I grow older I take more time to notice the small things in life (time).  I guess time is really not so small.  It truly is our moments in life that define us once we are gone.
I have made a commitment this year to savor every moment God has gifted to me and make as many memories as I can; spending time with my husband, three daughters, my precious grandchildren and my loves, Nyree and Bailey (dogs).
I also embrace my position here at Solis Wealth.  It has been a gift and I am grateful to work with all our clients and the wonderful team we have.
I feel so blessed in this life and wish everyone could feel the same!  I would like to take a moment to thank God for all He has blessed me with and to say a prayer that we all will find that inner peace. God Bless ~ Tami
Best regards,
Greg R. Solis, AIF®
President

The Wealth Advisors of Solis Wealth Management are also Registered Representatives with and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

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* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
*Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* 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 benchmark for the long-term bond market.
* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.
* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real 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 specific periods.
*The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* 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. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Stock investing involves risk including loss of principal.
* To unsubscribe from the Solis Wealth Management Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject line.
Sources:
http://www.nytimes.com/2014/02/12/business/yellen-testifies-in-congress-on-economy.html?_r=0
http://www.nytimes.com/2014/02/12/us/politics/boehner-to-bring-debt-ceiling-to-vote-without-policy-attachments.html
http://online.barrons.com/article/SB50001424053111903506304579375011776442236.html?mod=BOL_hp_we_columns (or go tohttp://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/02-17-14_Barrons-The_Hidden_Good_News_on_Jobs-Footnote_3.pdf)
http://uk.reuters.com/article/2014/02/13/markets-global-idUKL2N0LI27L20140213
http://www.econ.yale.edu/smith/econ116a/keynes1.pdf (Page 5)
http://www.economist.com/blogs/freeexchange/2013/09/working-hours
http://www.brainyquote.com/quotes/quotes/m/mahatmagan160721.html