Community – Annual Springer Turkey Challenge Update
 

Our annual Springer Turkey Challenge had a banner year. We still have a couple of straggler contributions, so I’ll have the total in the article I’ll write after the holidays. The Sacramento Food Bank was the major beneficiary, which will feed over 10,000 people this year with our contribution alone, that would have gone without this holiday season. A donation was also made to the River Oak Center for Children, which will provide toys to needy children that would have gotten coal this holiday. Of course they could always use more help and you can contact Blake Young at the Food Bank and Alice Gentry at the River Oak Center for Children. I also added a pic of me with Sister Jean from Stanford Settlement from this morning when or Rotary club had the joy of delivering holiday food boxes to seniors.


Recent Media contributions
 

I thought you might be interested to know that I have been quoted a number of times recently in financial articles that would probably be of interest to you. This morning I appeared in the USA Today in the story on Bank of America as well as in CBS News yesterday. Over the last few weeks my words have been far reaching appearing in the Washington Post, SF Chronicle, Malaysia News, Ireland Business World and the Calcutta News. Anyhow, if you’d like to take a look at the articles, visit - http://www.keithspringer.com/inthenews.htm

Market Update – The road less traveled shall prevail
The debate over the direction of the market rages on, with almost everybody you talk to on one extreme or the other. The bears tout the increased massive federal debt, rising unemployment, worsening demographics and higher interest rates around the corner. The bulls look at the rising leading economic indicators, improving employment picture and better than expected corporate earnings. I too turned extremely bearish in December 2007 when I wrote my Economic Tsunami Special Report forecasting the market crash due to the demographics of an aging US population turning from net spenders to net savers.

Interestingly, no one is taking the middle road, the road less traveled, and that’s the path where headed. I agree, both sides have very convincing arguments and the demographic story is the most dangerous. However, something happened on the way to the forum that caught everybody by surprise: corporate America downsized so incredibly fast, that it may have brought output in line with the new level of demand. The bad side is that a lot of people will lose their job, many of which will not come back. The plus side is that the crises may have been shortened by years. The outcome is that corporate America is in pretty good shape. Naturally to the legions out of work that means diddlysquat.

The biggest risk is rising interest rates. Under normal circumstances, rates rise as the economy recovers. However, right now with low capacity utilization, high unemployment and millions of residential and commercial units’ empty rates aren’t going anywhere anytime soon. The Fed has said just that, and they tend not to lie. (Really, they don’t).

Investment Strategy – Pay yourself first
In today’s difficult market environment, a Real Return investment approach is the way to go. Currently, there is an above average opportunity in investing for “Real Returns” through dividends and income. MLP’s, Preferred stocks, REIT’s and short term corporate bonds right now have great yields which give them downside protection. These are ideal for every investor and CD buyers. In particular, there is currently a particularly exceptional opportunity in MLP’s, as many provide: very high yields of 8-12%, most of which is tax free, capital appreciation and downside protection. Although many are way up, they still likely have a long way to go. Selectivity is the key.

Most investors fail because they lack a disciplined investment plan. Decisions, and the lack thereof, are often made based upon emotions, greed or ignorance. With money management available to almost every investor, nobody should do without. We have had a great year and have been very successful because we have clear and precise structure and discipline for managing our client accounts.

For the last 10 years the S&P down about 10% for the period. This is a lost decade for U.S. investors and a new experience for many (unless you were an investor during the 1930’s). However, we can be thankful that we are not sharing the experience of the Japanese investor, who is just finishing their 2nd Lost Decade in a row!

Although the problems are similar with an aging population turning into net savers from net spenders (remember, economies grow when you have more spenders and shrink when you less), we do not believe that our problems are exactly the same as the Japanese. However, is no doubt that buy-and-hold (buy-and-hope) is dead and that our Trademarked Top-Down Tactical™ (TDT™) investment strategy is the right approach for today’s difficult markets. Nobody is going to hit the market perfectly (that’s right, not even me), but tactical management, by someone who knows what they are doing of course, makes a tremendous difference. That’s my job: to find opportunities for our clients no matter what the market while providing protection and peace of mind.

*If you would like more information on our unique proprietary process for building successful tax efficient portfolios, reply back or give me a call at 916-925-8900.


Let me know if you have any questions or if I can help with something.

Cheers –Keith
916-925-8900

P.S. Be sure I am in your address book so these weekly email newsletters do not get blocked.

Keith Springer is President of Capital Financial Advisory Services, a registered investment advisor, providing Wealth Management and Mortgage Consulting Services.  For more information on how to build and maintain a solid retirement plan, please contact Keith at
916-925-8900 or Keith@KeithSpringer.com