We are pleased to announce Kathryn Hite as the latest addition to the Allgen Financial Services’ financial advisory team. Kathryn joins Allgen Financial Services, Inc. after five successful years as a Regional Leader with Primerica Financial Services, Inc, one of the largest personal financial services firms in the world. Kathryn brings a background of expertise in life insurance, debt consolidation, mutual fund investment, variable annuities, and long-term care insurance to Allgen’s retirement asset management practice.
Kathryn is a graduate of Transylvania University in Lexington, Kentucky where she earned a Bachelor of Arts degree with dual majors in Accounting and Computer Science. Kathryn began her career as an internal auditor and held various positions throughout her career including Y2K Technology Project Vice President for AmSouth/Regions Financial Bank.
Senior Partner Paul Roldan said, “We are excited about having Kathryn Hite on our team. She provides a great blend of strong analytical skills and practical solutions to those in need of financial planning and investment guidance. Our future looks even brighter with Kathryn as a member of our team.”
If anyone has watched the news in the last six months, things would appear to be apocalyptic. Some of the main headlines you would have witnessed would be ”Credit Crisis”, “Record Foreclosures”, “Bernie Madoff – Biggest Ponzi Scheme of all Time”, “Greatest Stock Market fall since the Great Depression”, “25 Year Highs in Unemployment”, “Massive Bank Failures”, “401k’s Down 50%+” and the latest…”Swine-Flu Pandemic”. That’s enough to make a person feel like the world is coming to an end. In fact, many people are convinced we are approaching the “end of times” - there are close to 1 billion searches on Google for some variation of an “end of times” scenario. I won’t try to sugar coat what has occurred over the last year or so as the world has gone through some difficult times, but I will highlight some positives that you rarely hear in the main stream media. For starters, did you know the over the last month there was a 15 day period where the S&P 500 had it’s biggest rally since the Great Depression? In fact, since the recent low in the market the S&P 500 is up over 25% and the NASDAQ is up over 32%.
Here are some things to keep in mind as you listen to some of your family, friends and most importantly the main stream media. Media outlets gain higher ratings over panic-type news so it is only logical for them to exaggerate any story. This causes a chain reaction that develops into a negative feed-back loop. As people hear the story’s from the media of mass losses in the stock market, rising unemployment, bank failures, etc. combined with actual experiences of losses or hearing from a friend or family member of losses or hardships that they’ve experienced this will cause people to believe things are worse than they actually are. Remember that this happens on a massive scale and will create what’s called herd-like behavior. Then, after the “herd” processes all the information they will tend to do the opposite of what the “bigger”, “smarter” money does – they sell their stocks and go defensive. Unfortunately the herd is usually wrong and almost always wrong at extreme points in the history of the stock market (I would consider recent times as an extreme point). When fear is at its highest point the market usually bottoms. This phenomenon occurs because the herd acts on the present and the past and the “smart” money acts on the perceived future. The “smart” money takes advantage of the panic and of the herd by buying stocks after the panic selling, which gives the smart money the chance to buy low. The same mentality happens at market peaks, as well. When everything seems to be going great and the media continues to highlight how great the market is doing (like the tech bubble in the late 90’s), that is when the “smart” money is selling and becoming defensive and unfortunately that is when the herd is buying into stocks.
Some measurements of fear that we track have recently hit 21 year highs and even after the markets recent sharp rally fear indicators are still measuring at extremely high levels. Most would think this is a bad thing, but I’m telling you that this is a positive and a reason to believe the market could go much higher from here. On top of that the pundits in the main-stream media doubt this rally and most are saying that the market will come back down. This too, is a positive, as the herd is usually wrong at extreme points throughout history. As most of the herd has recently gone defensive, Allgen has been aggressively buying over the last month to take advantage of the recent rally and the high potential for future gains. History has shown that the biggest market rallies follow the biggest market drops; unfortunately the herd is usually late to the party and won’t participate in the majority of the gains.
Going forward our advice is to be skeptical of what the media is saying and what the herd is doing especially at extreme points in time. History shows that you’re usually better off doing the opposite of what the herd does.
Written By:
Jason Martin, CMT & CFP
Chief Investment Officer
Allgen Financial Services, Inc.
Allgen Financial Services has recently received a significant amount of press for its innovative approach to fostering relationships with its clients and members of the business community by using social media such as Twitter.
“As a retirement investment advisory firm, we are on the cutting-edge in our thinking and approach to relationship connectivity. We have our finger on the pulse for how individuals and businesses are communicating with each other in 2009,” said James Zimbardi, Senior Partner at Allgen Financial Services, Inc.
The latest article published has been written by Beth Kassab of the Orlando Sentinel. She has been carefully tracking the value of Twitter in the marketplace for the last few months.
The market has its eyes on a retest of the November lows for the last month and the first test of those lows was a successful bounce. This doesn’t mean we will start into a new bull market, but it is an incremental positive. Last years November lows for the S&P 500 were at 741, yesterday’s low was 742 (chart below). Today the S&P 500 rallied 4% and volume was higher across the board. This support level is very important and we will see if the market can continue to hold and hopefully go higher from here. At the same time we will be on guard in case the market breaks below this important support level. If the market breaks below support we will sell our weaker holdings and add to our cash levels until markets stabilize.
We realize the news about economy is extremely weak, but it should be noted there are a few bullish characteristics visible if you do some sector and style analysis. For example, year-to-date two of the best performing sectors are information technology and biotechnology. Also, growth stocks as a whole are outperforming value stocks handily. Additionally, the NASDAQ considered more of a growth-type index has been much more resilient than the S&P 500, and is significantly above its November lows. These three examples are bullish characteristics, and are usually apparent as you enter an expansionary cycle of the economy. It’s is also important to note the market is forward-looking so even though we are currently in a contracting economy, the very next stage of the economic cycle is expansion. So, if expansionary stocks are doing better than the rest of the market, this is usually a sign of good things to come. However, to reiterate, this is only one up day and we are taking it one day at a time.
Allgen Financial Services, Inc. (www.allgenfinancial.com) serves individuals and couples at The Villages in Florida. Despite the economic downturn in 2008, Allgen continues to grow. In 2009, Allgen plans to have a greater presence at The Villages, Florida. “We are excited to continue serving individuals and couples retiring in Florida’s premier lifestyle communities,” said James Zimbardi a Senior Partner at Allgen Financial Services, Inc.
As a fee-only investment advisory firm, Allgen is able to serve current and new home owners at The Villages with objective retirement investment advisory services. Allgen custodians its client’s assets at Charles Schwab Institutional.
With 80+ million baby boomers retiring and moving to communities like The Villages, there is a critical need for retirement planning and investment advisory services. In addition, investment advisory services tend to play a more important role when investors are uncertain about market conditions. Since many major financial institutions are making significant cuts and layoffs, independent firms like Allgen are benefiting. It is able to demonstrate bigger is not necessarily better. More and more people are reaching out to Allgen because they have lost their advisor, or they are unsatisfied with the level of service they are receiving in these current market conditions.
Allgen specializes in retirement asset management for both individuals and businesses. It serves business owners, high-net-worth individuals, individuals in career transition, and retirees.
For professional investment advice:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com
We are pleased to announce Kathryn Hite as the latest addition to the Allgen Financial Services’ financial advisory team. Kathryn joins Allgen Financial Services, Inc. after five successful years as a Regional Leader with Primerica Financial Services, Inc, one of the largest personal financial services firms in the world. Kathryn brings a background of expertise in life insurance, debt consolidation, mutual fund investment, variable annuities, and long-term care insurance to Allgen’s retirement asset management practice.![[del.icio.us]](http://www.allgenfinancial.com/financialnews/wp-content/plugins/bookmarkify/delicious.png)
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