A Word From Bob, June 2015

Greetings! I hope everyone had a wonderful Memorial Day holiday and took the time to thank our veterans for their service. With Memorial Day behind us, the school year is coming to a close and our young people are full of excitement . . . and I would surmise that their teachers share that same sentiment.

In the January 2015 monthly commentary, I discussed my belief that specific types of real estate would perform well in 2015. It has been my premise that the low interest rate scheme perpetrated by the Federal Reserve, during and after the Great Recession, would offer a significant opportunity to invest in real estate.

My staff and I have consistently utilized both public and private real estate investments as a diversification strategy for our clients. The strongest returns in the REIT asset class since 2013 have been realized in private, illiquid alternative REITS. While REITS are not suitable for all clients, they can enhance portfolio income and diversification.

I continue to believe that more opportunity could exist in real estate investments in the future. However, some concern has arisen as interest rates are expected to rise later this year. Interest rates may rise, but I continue to believe that they will remain at historically low levels.

While U.S. stocks have gyrated considerably in 2015, very little progress has been made this year. However, it is important to point out that U.S. stocks remain stubbornly near all-time highs. Through the end of May, the S&P 500 Index is up 2.35% year-to-date. While stocks have posted modest gains so far this year, we received poor economic data on the last trading day of May which could hamper short-term stock market performance in the near future.

On Friday, May 29th the U.S. Commerce Department announced a major Gross Domestic Product (GDP) revision for the first quarter of 2015. The revision took the GDP number from a +0.20% growth rate to a -0.70% contraction for the first quarter of this year.

The negative GDP data and continued weakening of fundamental data points may lead to volatile and rocky price action in domestic and international financial markets in the future. I continue to believe that focusing on a diversified approach which incorporates both asset allocation and portfolio management style is critical. The rest of the 2nd Quarter will be interesting to observe.

Each June marks the annual Just Because We Care Golf Tournament, and this year we had strong support from our clients and friends. The tournament was a huge success and we believe it is likely that we will be able to get back to feeding our special children 5 days per week in the near future. I cannot express how thankful I am to have such supportive clients, employees, and business partners. In closing, the hot swelter of the summer months is right around the corner, but until then stay healthy, wealthy, and wise, and certainly . . . stay tuned.

Bob

http://therealdeal.com/issues_articles/real-estate-investor-roulette/

http://www.schwab.com/public/schwab/nn/articles/Market-Perspective

http://finance.yahoo.com/q/hp?s=%5EGSPC&a=11&b=31&c=2014&d=04&e=29&f=2015&g=d&z=66&y=0

http://finance.yahoo.com/q/hp?s=%5EIXIC&a=11&b=31&c=2014&d=04&e=29&f=2015&g=d&z=66&y=66

http://finance.yahoo.com/q/hp?s=%5ERUT&a=11&b=31&c=2014&d=04&e=29&f=2015&g=d&z=66&y=66

http://www.nytimes.com/2015/05/30/business/economy/us-economy-gdp-q1-revision.html?_r=0

http://finance.yahoo.com/q?s=^vix