1. The Economy,
the M k t
th Markets & Y
You
A Discussion with the Rotary Club of Monterey
Cris Cabanillas, CFP ® Steve Merrell, CFP®
Steve Merrell, CFP

2. DON’T BELIEVE EVERYTHING YOU
DON T BELIEVE EVERYTHING YOU
HEAR

3. Subsequent returns
1 Year 38%
5 Year 117%
10 Year 326%

4. Subsequent returns
b
1 Year 18%
5 Year 96%
10 Year 397%%

5. Subsequent returns
1 Year 23%
5 Year 122%
10 Year 455%

6. 2009 Returns
Q1 ‐12.48%
Q2 11.96%
Q3 15.82%
15 82%
Q4 8.10%
Year 22.68%
source: http://www.businessinsider.com, 10/16/2009

7. August 2010
Hindenburg Omen
Pundits declare: “Beware market
Beware
meltdown.”

8. What did we get?
Distribution of September S&P Returns
18
16
14
12
10
8
6
4
2
0
Data source: Standard & Poor’s

9. NOT AS BAD AS IT FEELS
NOT AS BAD AS IT FEELS

10. The Consumer: Not dead yet...
Retail Sales ‐ Pct Change vs. Year Ago
10
5
0
‐5
‐10
Source: U.S. Bureau of Economic Analysis
‐15

11. Industrial Production
Industrial Production
Pct Change vs. Year Ago
10
5
0
‐5
5
‐10
Source: U.S. Federal Reserve
‐15

12. Recovery’s rocky road
Recovery s rocky road

19. Summary
• Beware of pundits.
Beware of pundits
• The economy is healing, but recovery is rocky.
• Si ifi
Significant challenges remain.
h ll i
• Portfolio structure is key.
• Diversification matters.
• Look for opportunities.
Look for opportunities

20. Questions & Answers
Questions & Answers