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 "Just
then, Goldilocks awoke and saw the three bears. "Help!" She
cried, and she jumped out of the bed, ran down the stairs,
opened the door,
and fled into the forest. "Get away!
Away from that house!" she
told herself as she ran, forgetful of all the trouble she
had so unkindly caused..."
This week, popular
TV personality Larry Kudlow admitted: "My
Goldilocks theme took quite a beating today".
The economy certainly didn't look wonderful this week...far
from the Goldilocks
theme that has been making the rounds
in the media over the last couple months.
Several data points showing a slower
economy, disappointing retail sales, a rise in jobless claims,
and further confirmation
of firm inflationary pressures filled the newswires. Combine
that with a falling dollar, higher oil prices, reports of
a pickup in insider selling, and you have to wonder why the
market's performance wasn't even worse this week.
We've got an amazing divergence right
now between the stock market (full steam ahead), Fed comments
(inflation risks still
remain), economic data (signaling a recession), and bond
market expectations (slight chance of a cut by January).
It's like
all four groups are looking at the same bowl of porridge,
and all have different opinions about the temperature of
it in ranging from hot to cold. One thing is for certain we are clearly
headed for a landing. But the jury is still out on whether
it will be a "soft" or "hard" touchdown.
The yield curve remains inverted with short-term interest
rates well above long-term rates - an adverse condition
that has led the path into recession six of the past seven
instances.
James Montier, of Dresdner Kleinwort
in London, noted last week that based on the yield curve
and the level of Fed
Funds (a model developed by John Wright at the Fed), the
probability
of a recession within the next 12 months appears to be
about 50%.
As the views of a Goldilocks economy
fade, investors will focus their hopes on an upcoming Santa
Claus rally.
| Returns through 12/01/06 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
| Dow Jones Industrials |
-0.7 |
13.8 |
12.1 |
7.2 |
4.4 |
6.5 |
| Nasdaq Composite |
-1.9 |
9.4 |
6.2 |
6.6 |
4.8 |
6.4 |
| Standard & Poor's
500 |
-0.3 |
11.9 |
10.4 |
9.3 |
4.1 |
6.3 |
Source: Yahoo! Finance, Barrons
Past performance is no guarantee of future results. Indices
are unmanaged and cannot be invested into directly.
Three-,
5-, and 10-year returns are annualized. Assumes dividends are
not reinvested.
IF YOU PLAN ON WORKING IN RETIREMENT,
YOU ARE NOT ALONE. A 2005 Merrill Lynch study found that 76% of
pre-retirees include work in their retirement plans and that
almost 13% expect to start or buy a business. In fact, according
to a recent study released by AARP, attracting and retaining
mature workers has become a business imperative as they will
make up nearly 20% of the U.S. workforce by 2012.
Those statistics certainly backup an observation
made by futurist C. Grady Cash, CFP, who says that the number
one financial
asset for most Baby Boomers when they retire will be their "human
capital." That is, your ability to earn income or
to work as a volunteer could affect your quality of life
more
than whatever traditional financial assets you have socked
away.
Accordingly, there are plenty of organizations,
many of them web-based, that now cater to helping retirees
find
part-time
work and volunteer opportunities. These include websites
such as www.RetirementJobs.com, www.yourencore.com, and
www.2young2retire.com.
If you are more interested in volunteer
opportunities, you may not need to look any further than your
local school
or town hall. AARP and local colleges and universities also
offer
a range of volunteer opportunities. There are also a number
of organizations that cater to more specific interests.
For example, the Arts & Business Council (www.artsandbusiness.org)
is dedicated to promoting partnerships between the arts
and business people. Your management and strategic planning
expertise
may be just what a struggling theatre company needs.
Finally, personal consultants can help
you to find your way in a new working retirement world. For
example, Anne
Hartman,
managing partner of Working Differently, consults with individuals
and organizations to redefine retirement and provides counseling
on the move from the 9 to 5 working world to what she refers
to the "bridge job," the part-time or volunteer
work that follows one's career and comes before the
traditional retirement.
The rocking chair is, of course, long gone
as the symbol of retirement. But if this working in retirement
trend materializes
as studies predict it will, the rocking chair could be
replaced soon with a laptop.
Weekly Focus — Rearrange the
order of the following letters to form two words.
C E L R T U Y
All seven
letters must be contained in each word. What are the two
words?
And now, by popular demand, for those
who desire instant gratification...an 'Answers' page!
Click
here to find answers to current and past puzzles.
Best Regards,
Ken Ford
P.S. Please feel free to forward
this commentary to family, friends, or colleagues.
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