Happy Thanks Giving

November 21,2005
Hello,
That’s right you herd it right the NASDQ has hit a 4 year high, gee another 2873 and some odd points up and we will be even with March 2000. This means the NASDQ would need to more than double yes that is over a 100% increase to return to its former glory. Taking a longer term prospective investors would notice that we have barley moved ahead of January 2004 and slightly behind December 2002 .The recent move up may be nothing more than an end of the year “Santa Clause” rally or as I have long stated we are way overdue for a significant prolonged raise in the stock markets. To date the 2000 to 2005 market has under preformed the 1930-1935 market. I can not over state the case that this decade has very little in common with the 1930’s .We are also on the verge of underperforming the 1970’s and as all economic data has suggested there is little of nothing in common with the pathetic performance of the economy in the 1970’s. Yes there are some similarities of the two mentioned decades as in the 1930’s the winds of war are blowing and many nations are embracing authoritarianism and like the 1970’s real estate has been a runaway success and energy is the major focus. In both cases the current challenges seem to pale by comparison. However the market for many needs to prove it self all the strong earnings, and large cash positions mean nothing if investors don’t feel confident that there some reasonable probability that they are going to make money. The good news is that the financials continue to move up ,IPO’s abound ,buyouts continue at almost a daily pace ,stock purchase plans are buying back shares ,tech stocks are again on the move and the economy continues to advance in spite of higher energy prices. All of which historically imply that the stock market should be beginning a large move up ward.
Since bank style CD’s are now starting to yield in some cases in excess of 7% I have decide to reprint this post from my website. Recently I have had some clients ask me what’s the difference between buying a CD from a bank or one from a broker? Here are some helpful hints; Unlike a Certificate of Deposit that is bought directly from a bank; a brokered CD is sold by stock brokers (and others). And unlike a bank-bought CD, a brokered CD is marketable on a secondary market. It is FDIC insured up to $100,000 and it is often marketed as a suitable alternative to Treasury issues. Because these are marketable securities it is important to go farther than yield; another words don’t just be a yield hog.
1. Remember like other fixed income investments if interest rates go up, the market value of these securities may go down. That is elementary to anyone who has ever been interested in fixed-income investments.
2. Check the rating of the bank. Stick with higher quality banks.
3. Check the value of a similar issue on the secondary market. Higher rated Bank’s CD’s trade stronger and lower rated banks trade weaker. That means that if you want to sell the CD before its maturity, which you can, CD’s from Banks that have lower ratings often trade below what they were bought at. This could create a loss for the investor.
4. Check the secondary market, as an alternative to new issues, if the secondary-market value is less than par. That may result in a good deal for you. For instance, an issue with a coupon rate of 4.15%, if it sells on the secondary market for 93.5, will yield 4.98%.
5. Remember as a broker I have hundreds of Bank CD’s to chose, from 1 month to 10 years so it is very important for the prospective buyer to as forth coming and truthful about their needs as possible so that the best alternative can be found.
Call me for a CD QUOTE today,
James Foytlin
Independent Investment Representative
1(888)599-1188 or (201)652-3003
www.jamesfoytlin@optonline.net