It is early March as I am writing this update and as I mentioned in last month’s edition, we continue to have very unusual weather. It seems like late spring with mid 80 degree temperatures and I am wondering if we will experience winter weather beginning before fall ends? I guess we should just enjoy it while we have it!

It appears that we are continuing our slow economic recovery here in the United States as compared to Europe where they seem to be in a recession (depending on to whom you listen) and Asia may also be slowing down. China has recently scaled back their estimated growth for their domestic economy for 2012. Since this is an election year, I expect that every effort will be made to keep our recovery going until at least December. I’m not as sure about next year, as the election results will probably have a significant impact on our economic prospects for the next several years.

Since the first of the year, our domestic stock market has been on a strong up trend and our managed portfolios have been enjoying an excellent gain in value as well. Many of the technical analysts we work with are suggesting that a short term correction is possible as the market may have “gotten ahead of its self.” While progress has been made in stock prices, many short term technical indicators have been weakening. This suggests that we are likely to see a drop in stock prices in the near term. Once prices digest the recent strong advance, a renewed up trend is likely to occur. This digesting process may take a month or two, but the general consensus is that 2012 should end up with a good gain in market valuation. Time will tell!

Taking all of this and many additional factors into consideration, we are moving to a slightly more defensive stance in the managed accounts during this market adjustment period in an effort to protect the excellent profits we have generated so far this year. As the technical data improves and an upward trend resumes in the stock market, we will continue adjusting your investments to position your portfolio to take advantage of that upward trend. These active management techniques have served us well over the years and allowed us to create an excellent performance record with substantially less risk of loss in your portfolio and we see no reason why we can’t continue to do so in the future. Of course, as I have stated many times previously, past performance is no guarantee of future results. All investments have risk and can gain or lose value over time.

The Department of Labor, which regulates pension plans like 401(k)s, is in the process of enforcing tougher rules to force the service providers to disclose the true cost of their service to the plan sponsors and their employees. They feel that many providers have been charging excessive fees. We are working with several small business owners to assist them in evaluating their current pension plans to be sure that they are in compliance with the new rules and improve them where ever possible. It has been my experience that many of these existing plans can be substantially improved with lowered costs and we are available to assist you in evaluating your current program.

I hope you are having a wonderful year so far. I am always available to discuss any issues that are important to you or your friends and family, so give me a call!