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Archive for News

Market Brief – January 2019

Posted by Koenig Investment on
 February 6, 2019
  · No Comments

The month of January has seen a rebound in stock prices after a very rough December.  December saw a market awash in pessimism.  Part of this pessimism was based on worries over continued interest rate increases by the Federal Reserve.  This concern has diminished in January.  In general, analysts and investors are no longer concerned over a Federal Reserve rapidly increasing interest rates to a level that would send the economy into a recession.  The Federal Reserve has recently communicated a much more modest outlook for rate increases than they had late last year.

The biggest single driver of stock prices are corporate profits.  2018 profit growth came in at around 11-12% when backing out the benefits of the corporate tax cut.  2019 earnings are projected to be about 6%.  That is about half of 2018’s rate.  By historic standards, 6% growth is good.  We would encourage clients to keep this in mind when reading financial news.  To reiterate, 2019 is expected to see a lower rate of growth than 2018.  That does not mean a contraction, slowdown, recession, or any other negative activity.  It just means a slower growth rate.

In summary, the month of January has seen a significant portion of December’s market declines reversed.  This is due in large part to earnings releases that note revenues, sales, etc. during the last quarter, but also provide guidance for the next.  About a quarter of companies have released these figures so far, with the bulk of releases coming out over the next 2 weeks.  The main takeaways right now are that the market has largely gained back the declines experienced in late 2018 and that earnings are largely expected to continue to grow during 2019, although at a lower growth rate than in 2018.

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March 2016

Posted by Koenig Investment on
 March 7, 2016
  · No Comments

Volatile Markets

This year has begun with market activity that has left many investors nervous.  Although economists noted the overall U.S. economy was performing at a decent level throughout January and February, the markets reacted sharply to fears over China and lower oil prices.  The S&P 500 declined by a little more than 10% as of mid-February, leading to talk of recession in some media outlets.  Economists as a whole did not endorse this speculation, but could not definitively say if or when the market would recover.

The decline in overall stock prices occurred in tandem with a falling of oil and other commodity prices.  Many parts of the world are expected to have slower economic activity in 2016, with China most notably experiencing slower economic growth.  Declines in commodity prices appeared to be a reaction to various projections of slowing overseas activity.  Data on the economy led to an uptick in commodity prices in late January and into early February.  The broad stock market followed suit and gained back some of the ground lost earlier in the year.  As of March 6th, the S&P 500 has regained most of its earlier declines, now posting a modest year-to-date decline of less than 2%.

It is difficult to call either a market high or low until well after the fact.  While few are willing to definitively state that the bottom has been reached and passed, a number of analysts are now stating we have likely passed the bottom.  There are a number of reasons for them to begin to make this call.  Both Canada and Australia have economies heavily reliant on commodities.  Canada has a large oil sector and mining is important to the Australian economy.  Both currencies took a hit starting in 2014 as we saw non-oil commodity prices begin a decline.

The graphs of both the Canadian and Australian stock markets mirror their currency graphs with declines from mid-2015 and then bouncing back in February.  Commodity based company stocks such as Freeport-McMoran (copper), Alcoa (aluminum), and indices like the Dow Jones U.S. Steel Index all show declines beginning in the summer or fall of 2015, with bottoms in late January.1 While it is too soon to definitively call a bottom to recent commodity and market activity, a number of signs are pointing towards this being the case.

United States Economy

Employment – The unemployment rate continued its slow decline to 4.9% in February.  This was accompanied by a small increase in the labor force participation rate, meaning that the decline in unemployment is a result of increased employment and not workers giving up on looking for jobs.2  In fact, the discouraged workers (defined as persons no longer looking for work as they believe they will not find any) figure is down 18% from the previous February.

An interesting development in the current labor market is wage growth.  The average wage in February 2016 is 2.2% higher than for February 2015.3  Costco is a notable example of this upward wage pressure, making national news with their increase of a minimum wage to $13/hr.  They are not the only company to note pressure to increase wages in order to stem employee turnover and attract desirable workers.

Corporate Earnings – Corporate profits remain steady overall.  We are seeing a smaller group of companies project earnings growth in 2016 compared to the number of companies projecting growth in 2012 and 2013.  This is a more mature market that is holding steady.  Dividend paying stocks remain attractive as investors seek alternatives to low interest rates paid by bonds.

Other sectors – Statistics for the overall U.S. economy continue to portray a boring, yet positive picture.  The economy is continuing its slow, steady growth with healthy levels of new-vehicle sales for February, greater than expected existing-home sales for January, and manufacturing and purchasing data in line with a GDP growing at about 2% annually.

Summary

2016 has gotten off to a volatile start, with markets regaining much of the ground lost in early 2016.  Commodities look to have been oversold in this period.  Recent price rebounds in commodity prices have been led by currency and stock market reversals in Canada and Australia, historically a signal of stabilizing or growing commodity prices.  The U.S. economy is in better shape, continuing its slow, steady growth.  We expect 2016 to continue to show steady U.S. growth and a recovery within a number of commodity sectors.

  • http://stockcharts.com/members/analysis/20160302-1.html
  • http://www.bls.gov/news.release/empsit.nr0.htm
  • http://www.bls.gov/news.release/jec.nr0.htm

 

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a solicitation of the purchase or sale of any securities.The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different.  The information provided is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties.  Individuals are encouraged to seek advice from their own tax or legal counsel.  Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.  Neither the information presented nor any opinion expressed constitutes a solicitation of the purchase or sale of any securities.

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2016 K-1 Release Dates

Posted by Koenig Investment on
 February 23, 2016
  · No Comments
ALLIANCEBERNSTEIN HOLDING LP COM AB 2/25
AMERIGAS PARTNERS-LP COM APU 2/26
BUCKEYE PARTNERS L P UNIT LTD PARTN BPL 3/7
BOARDWALK PIPELINE PARTNERS COM BWP 2/29
THE BLACKSTONE GROUP LP COM BX late March
CRESTWOOD EQUITY PARTNERS LP UNITS CEQP 3/15
ENBRIDGE ENERGY PARTNERS LP EEP 2/24
ENTERPRISE PRODUCTS PARTNERS LP EPD 2/23
ENERGY TRANSFER EQUITY LP COM ETE 3/31
ENERGY TRANSFER PARTNERS LP COM ETP 3/18
KKR & Co KKR 3/31
NUSTAR ENERGY LP NS 2/29
NUSTAR GP HOLDINGS LLC LP NSH 3/4
ONEOK PARTNERS LP COM OKS 3/1
PLAINS ALL AMERICAN PIPELINE LP UNIT PAA 2/26
PHILLIPS 66 PARTNERS LP COM PSXP 2/26
SPECTRA ENERGY PRTNS LP COM SEP 2/23
SUNOCO LP COM SUN 3/11
SUNOCO LOGISTICS PARTNERS COM LP SXL 2/26
TC PIPELINES LP LP TCP 2/26
TESORO LOGISTICS LP COM TLLP 3/7
WILLIAMS PARTNERS LP MLP WPZ 3/1

Copies of most K-1s can be found here:

https://www.taxpackagesupport.com/(S(mtyoy445juacfwuqkbsglpri))/k1SupportHome.aspx

 

Blackstone K-1:

https://www.partnerdatalink.com/Blackstone/Login/Logon.aspx

 

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January 2016

Posted by Koenig Investment on
 February 23, 2016
  · No Comments

China’s Economy

We ring in 2016 with a good dose of market volatility. The five year graph of the Shanghai Composite Index shows a bit of a decline in 2011, fairly flat in 2013 through mid-2014, and then a steep rise starting in mid-2014.  This rise coincided with the Chinese government encouraging citizens to buy stocks, even as monthly economic statistics were showing the economy was slowing and economic data was coming in below forecasts. Unlike the United States and Europe where pension funds, university endowments and mutual funds make up a large portion of stock ownership.  China is almost all affluent, individual investors.  Given this dynamic greater volatility is almost a given.

SOURCE: https://www.quandl.com/data/YAHOO/INDEX_SSEC-Shanghai-Composite-Index-China

In the latter part of the 1990s corporations were moving manufacturing to China from the United States and other countries to take advantage of lower labor costs.  This mass influx of manufacturing drove the Chinese economy for the last 15 years, resulting in annual GDP growth of 8-10%.  This is an almost unheard of figure, and one that eventually has to moderate.  Growth in the Chinese middle class has been fairly rapid and consumer spending will be a larger portion of their economy going forward.  The Chinese government is trying to transition from primarily a manufacturing and exporting economy to be more of a consumer based economy.

Currency – We continue to see China’s currency (Yuan) be devalued against the U.S. Dollar and Euro.  Although currency instability has rattled markets, it does have a positive impact on U.S. corporations purchasing Chinese products.  Walmart specifically should be a big beneficiary, as a weakening Yuan reduces the costs of Walmart’s extensive purchases from China.

Markets – The Chinese government has looked somewhat clumsy in their actions in dealing with a slowing economy and a stock market that had a huge one year run up from mid-2014 through mid-2015.  They imposed a circuit breaker to shut down the stock market if it dropped by 5%.  It took 29 minutes to reach that point during one day this week.  The government has now withdrawn that rule.  In addition, most of the individual investors within the Chinese market are also Chinese citizens.  Their market rules make entry of foreign money difficult to say the least.  This has created a situation in which large numbers of persons relatively new to stock market investing have driven up market prices to unsustainable levels.  We are seeing a drop in price as the President, Xi Jinping, has begun to change the government’s oversight of the markets.  These are long-term oriented reforms that are painful in the short-term, but should give better results than the patchwork stimulus implemented over the past summer.

While the volatility in the Chinese stock markets is attention grabbing, it likely would not impact the average investor elsewhere.  You may recall stories in the 1980’s about Japan’s rapidly growing economy.  Their economy was growing by leaps and bounds until 1989.  Their market peaked in that year and has never fully recovered.  Most U.S. companies and households did not notice this slowdown in the 1990’s even though Japan was a U.S. economic partner.  China is 0.7%1 of the U.S. export market.  A slowdown in the Chinese economy is likely not going to be felt in the broad U.S. economy.  It is simply not large enough to be felt.

United States Economy

Employment – December employment figures released today show a gain of 292,000 jobs. This beat a consensus estimate of 200,000 jobs.  The employment figures for October and November were both revised upward by 50,000.  Almost all sectors of the economy posted job growth except energy.  The unemployment rate remained steady at 5%.2

Corporate Earnings – Corporate profits are the life blood of stocks.  GDP projections are holding steady at low, but positive numbers. Some sectors are seeing typical cyclical contraction, but a company that made money in 2015 is likely to continue to make money in 2016. I would guess the year over year growth in 2016 will be a bit lower than recent years but still growing.

Starting the middle of January we will start to see the release of 4th quarter corporate earnings results.  These results should help support the markets.  In manufacturing employment gains in chemical and plastics are offsetting job losses in metals and energy. Retail sales show a migration of consumers to online firms over traditional brick and mortar retail.

Construction – Construction continues to hold up well in both commercial and residential.  New home starts for November rose 10.45% from October and 16.48% since one year ago.3  US existing home median sales prices are up 6.32% over the one year period.4  Housing is no longer a drag on the overall economy, but rather a healthy sector contributing to overall growth.

Summary

Bright spots in the market in 2015 were technology companies, including biotech.   Several companies have interesting new drugs, devices, or other technology based products that are likely to help company earnings.  REITs are another area to watch.  REITs tend to perform well in rising interest rate environments.  We’ve seen some healthcare REITs whose valuations have dropped far enough during the past year that early 2016 is an attractive entry point in these offerings.  Overall, the U.S. economy is in good shape.  The market activity in China is interesting to follow, but will not have a material impact on the economy here.

  • https://www.census.gov/foreign-trade/balance/c5700.html
  • http://www.bls.gov/news.release/empsit.nr0.htm
  • https://ycharts.com/indicators/existing_home_sales
  • https://ycharts.com/indicators/sales_price_of_existing_homes

 

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different.  The information provided is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties.  Individuals are encouraged to seek advice from their own tax or legal counsel.  Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.  Neither the information presented nor any opinion expressed constitutes a solicitation of the purchase or sale of any securities.

 

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In-Service 401(k) Rollovers

Posted by Koenig Investment on
 June 18, 2015
  · No Comments

A potentially powerful and often overlooked investment strategy

Most people are under the impression that they can’t touch their qualified employer plan such as a 401(k) until they reach age 59 ½ and are no longer employed.  What people don’t know is that many qualified plans allow what is called an “in-service rollover” of their account balance.  This allows a current employee to open an IRA account and rollover part of their balance to the new IRA account.  This can be done all while continuing to work and contribute to their employer plan.

As investment advisors, we often hear from people complaining about the lack of investment options or lack luster performance inside their 401(k) account.  If you find yourself thinking this, or wish you had an investment advisor to manage your account for you, an in-service rollover might be right for you.

There are many potential benefits to an in-service rollover from your 401(k) account to an IRA account.  Many 401(k) accounts provide very few investment options and most do not allow individual stocks to be purchased.  Inside an IRA an investor has access to a much wider array of mutual funds, individual stocks, bonds and other investments that can diversify a portfolio and potentially add additional growth and income.  In addition, by having an IRA account with an advisor, an investor has access to retirement planning and other financial services not typically offered by employer plans.

If you think an in-service rollover might be right for you then the first step is to find out if your company allows this kind of withdrawal.  You’ll want to check with your benefits department for the specific guidelines of your employer plan.  You may want to enlist the help of an investment advisor to review the details of your plan summary document as there may be limitations or certain restrictions that apply.

It’s important to understand that normal distributions from a qualified plan are subject to income tax and distributions under the age of 59 ½ could be subject to a 10% early withdrawal penalty.  By taking an in-service rollover and moving the assets into an IRA, you would not be subject to a tax liability and you would maintain the benefits of tax-deferred growth.

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November 2014

Posted by Koenig Investment on
 November 12, 2014
  · No Comments

November 2014

Interest Rates

The below graph of the 10-year Treasury rate over the past century puts current interest rates in a clear historical context.  From 1946 to 1976 – a period of 30 years – interest rates steadily rose from 2.19% to 7.74%.  Interest rates then experienced a sharp uptick in the late 1970’s and early 1980’s before receding to a historically normalized level.  Current rates are at lows not seen since the 1940’s.  The graph clearly illustrates that rates are not likely to go lower, but rather to rise.  The wider bond market tends to move in conjunction with Treasury rates.  From 1945 through the late 1970’s the average annual return in the bond market was about 3.5%. From 1980 through 2012 the average annual return for bonds was closer to 8.5%. A bond gains in attractiveness, and therefore value, when its interest rate is higher than the current market average.  Conversely, a bond declines in value when its interest rate is lower than that of newly issued bonds.  Bonds issued at today’s low interest rate will be less attractive than bonds newly issued at higher future rates, meaning these bonds and the funds that hold them are expected to decline in value.  Given rates are likely to gradually move upward – reverting to more typical historic levels – bonds will not provide the strong anchor position investors have experienced for several decades.  Considering these projections, we would be more cautious on bonds over the next 5 years.

chart medium CSource: www.multpl.com

Stock Market Valuations

Many of us remember the stock market decline following the extended technology market advance in the latter half of the 1990’s.  By the late 1990’s many investors only wanted to own technology stocks.  This caused the price to earnings ratio (P/E) of the S&P 500 Index to climb to around 30 near the end of 1999, compared a longer term average of 17.[1]  To date 76% of U.S. corporations that have reported 3rd quarter earnings, reported above analyst expectations.  This is above the long-term average of 63%.[2]  In a few weeks the market will be moving its focus on 2015 earnings. Currently the updated P/E ratio on estimated 2015 S&P 500 earnings is about 15.72.  While a number of pundits speak about an overvalued market, the P/E ratio contradicts this negative market assessment.

Purchasing Managers Index (PMI)

PMI has continued to move up this year, as we reported last month.  Data reported at the end of October showed a 2.4% monthly increase to 59.0.  The index was originally developed by Herbert Hoover as a quick and reliable monthly survey and early indicator of the health of the economy.  Below are a few comments from respondents of the latest survey. [3]

“Holiday orders are exceeding seasonal forecasts. Customers are demanding additional quantities above prior orders. Fuel costs and other positive signals appear to be creating demand above normal.” (Food, Beverage & Tobacco Products)

“Weakness in commodity prices very positive on our business.” (Fabricated Metal Products)

“Outer body material changes in the auto industry means new equipment and manufacturing growth.” (Machinery)

Media

Media often steer dialog to the more negative aspects of any story.  Human beings have a genetic hardwired response to run from fearful events.  The news media understands this impulse well and many outlets rely on fear to some degree in order to hook an audience.  While fear responses originated with reactions to predators in the wilderness, it does not end with our move to modern societies.  A person investing for retirement who is uncomfortable observing their account balance decline on a day-to-day basis is often responding to this same danger stimulus.  It can be difficult to sort probability from possibility in all manner of situations.  Part of our responsibility as your advisors is to help filter out media noise and provide relevant market information to help you decide what real risks are for you, versus possibilities that are unlikely to ever occur in reality.

A recent perusal of financial headlines was cause for mirth within the office.  You may have recalled the oil price spike in spring 2012.  Article titles from the time called up scenarios of doom and gloom.  One would think a decline in oil prices, as we are currently experiencing, would result in happy headlines.  Not so.  According to various articles oil prices are “swooning”, “slipping”, “sliding”, etc.  Here are a few headlines related to the drop in oil prices:

Falling oil prices put pressure on Russia, Iran, Venezuela – Washington Post 10/20/2014

Oil Prices: Will the slide hurt the US shale boom? – The Christian Science Monitor 10/23/2014

Is the Cascade in Crude Overdone? – Investing Daily 10/24/2014

Oil Prices Slip on High Supplies – Wall Street Journal 10/24/2014

Markets are constantly in flux.  Every change results in a mixed bag of winners and losers.  The media has a habit of focusing on the losers and forgetting, or downplaying, the winners in any given situation.  While this attitude may help make it easier for us to identify situations to avoid or alter, it often leaves us without the knowledge of positive gains from changes in economic events.

Master Limited Partnerships (MLPs)

In mid-October we saw MLPs in the oil & gas pipeline sector incur higher than usual market volatility.  Energy Transfer Partners a large pipeline company, was trading around $64 a share on October 6th.  By October 15th it had traded down to $53.50.  Just a week later it was back above $64.  Many other pipeline stocks experienced similar price moves. During this time period we saw a broad market selloff of more than 5%, with oil prices sinking 12% in October and more than 25% since the summer season.[4]  Markets were driven down by heavy selling in the broad energy sector as investors were concerned about profitability of oil & gas exploration companies.  Hedge funds further contributed to the selloff in MLPs as some were forced to sell in order to cover their margin balances.[5]  The benefit of MLPs in the pipeline sector is that their profits come from transporting oil and gas, not exploration, meaning profits are less dependent on higher oil prices.  We believe the October selloff in oil and gas pipelines was an overreaction and has since corrected itself.  We maintain our belief that pipeline MLPs are a strong longer-term position providing steady income.

Summary

We tend not to hear from clients during market advances, but see an increase in client contact during market pullbacks.   When viewing account balances on a daily or weekly basis one must keep an appropriate perspective, knowing investments are meant to be held for a longer time period.  Declines are common in the stock market, and many are short lived with little fundamental relevance.  Do you recall the pullback of August 2004?  How about June 2006 or September 2011?  While each of these declines did affect investors at the time, these temporary pullbacks have faded from memory for the long-term investor.  Our office had been expecting the market correction we recently saw for several months.  We feel this pullback is now over and are looking forward to what corporate earnings, GDP, manufacturing data, and other economic metrics are indicating – a period of mode

[1] www.multpl.com S&P 500 PE Ratio

[2] Thomson Reuters, Proprietary Research Earnings Aggregates, (October 31, 2014)

[3] ISM, Manufacturing ISM Report on Business, October 2014

[4] Morningstar

[5] Virtus Investment Partners, What Happened to MLPS, October 15, 2014

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October 2014

Posted by Koenig Investment Advisory on
 November 10, 2014
  · No Comments

October 2014

Global stock markets are in a selloff with the epicenter being in Europe.  The global recovery since the great recession of 2008-2009 has been slow all around.  Economic growth in Europe continues to lag the US which it has historically.  The decline we are currently seeing is not a repeat of the 2008-2009 recession where we experienced catastrophic failure in the credit markets.  I will share several data points I monitor that highlight the difference.

Gross Domestic Product

Data reported by the European Commission shows that the 18 euro countries had zero real growth in the second quarter of 2014.  German factory orders declined 5.7% in August and German Real Gross Domestic Product (GDP) is zero or slightly negative.  In comparison the U.S. second quarter GDP came in at positive 4.6%.  The weak European economic data, although not a surprise, is weighing on stock exchanges and may be an indicator that current European policies are not advantageous for economic growth.

Manufacturing

The Purchasing Managers Index (PMI) is reported monthly and is an indicator of the overall health of the manufacturing sector.  Over the last year the U.S. index has been gradually moving up.  In comparison, China and Europe, countries which more heavily rely on manufacturing have reported near flat PMI numbers. 

graph B

Corporate Earnings

Corporate earnings is a key driver to market returns.  If you asked a CEO in 2008 about their earnings outlook, many answered with uncertainty.  Since then corporations have steadily increased their earnings-per-share, many reporting record highs in 2014.  This is illustrated in the below chart from 2008 through 2014, representing 10 of the 30 corporations in the Dow Jones Industrial Average.

Earnings-Per-Share (Yearly)               *Projected
2008 2009 2010 2011 2012 2013 2014*
General Electric (GE) 1.97 1.18 1.14 1.33 1.38 1.46 1.67
DuPont (DD) 2.78 2.03 3.28 3.57 3.77 3.88 4.01
United Technologies (UTX) 4.96 4.58 5.03 5.35 5.36 6.22 6.84
Procter & Gamble (PG) 3.42 3.47 3.67 3.87 3.85 4.02 4.22
Microsoft (MSFT) 1.87 1.69 2.10 2.64 2.72 2.74 2.60
Intel (INTC) 1.10 1.17 2.01 2.53 2.13 1.89 2.23
Boeing (BA) 4.79 1.87 4.20 4.80 5.00 5.84 8.27
3M Co (MMM) 5.17 4.69 5.75 5.96 6.36 6.72 7.46
Home Depot (HD) 2.17 1.18 1.63 2.03 2.47 3.07 3.76
Source: MarketSmith

In summary, U.S. corporations are in good shape.

Deficits

The U.S. budget deficit as a percentage of our GDP is another important metric.    The government was operating at a 10% deficit in 2009 but the latest figures for the 3rd quarter shows a deficit of just 2.9%.  This is a level we saw in the late 1980’s through the mid 1990’s.  The U.S. government budget equates to roughly 35% of GDP while in Europe it has historically been much higher, closer to 50%.

graph A

Banking Sector

Since 2008 big banks have rigorously shored up their balance sheets at the bequest of the U.S government, accomplished through government backed loans and increased liquidity and risk measures.  Europe on the other has not gone to such lengths to strengthen their banking industry.  A weaker banking system coupled with the larger percentage of government spending in Europe has proven to be a strain on European economic expansion and the overall ability to recover from a recession.

A recession is defined by a decline in GDP for two consecutive quarters or longer.  The U.S. is obviously not in this situation.  We don’t have extenuating circumstances – such as a credit crisis – that leads economists to believe we are even approaching a period of economic downturn.  We are seeing a correction, which is a periodic part of the stock market.  Europe has some worrying economic fundamentals but the U.S. is in a far different position.

One bright spot in the recent selloff is oil prices falling to a five-year low, with gas prices at the pump following suit.  A one-cent reduction in gas prices equates to $1 billion per annum in consumer savings. [1]  We would expect to see some of this savings funneled into other industries such as retail, especially as the holiday season ramps up.

Please feel free to contact the office at your convenience with any questions you may have.

[1] Wall Street Journal, Global Oil Glut Sends Prices Plunging, (October 14, 2014)

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Koenig Investment Advisory, LLC is a registered investment advisor in the States of Oregon, Washington, California, and Colorado. Advisory firms with five or fewer client households are exempt from registration in such states. The advisor may not transact business in states where it is not appropriately registered, excluded, or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities or the rendering of personalized investment advice for compensation will not be made without registration or exemption.
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