2/3/2011 Historical Post

From: Dale Beals <dpbeals@comcast.net>
Subject: Market Thoughts and your portfolio
Date: February 3, 2011 10:21:03 AM CST

I just wanted you to know that I have essentially moved to cash for awhile to see how the markets absorb the global news as well as the potential municipal bond crisis. I believe the risk outweighs the probable profit opportunities for the next few days or even the rest of February. As you know, my view can change, but I wanted you to know what my thoughts are.

Here are my reasons:
1. My portfolio model (see the web site for more info) has been giving me many conflicting signals during the month of January. We have received an overweight (or buy) signal only to have the model immediately reverse itself several times in January.
2. Egypt’s unrest could spread to other Arab countries and eventually disrupt the flow of oil and the normal flow of global business… hurting corporate profits which could then cause stocks to fall.
3. The U.S budget issues combined with our rapid approach to our spending/debt ceiling will probably cause a lot of politicking and possibly change the psychology of the market participants.
4. Several U.S States are in big financial trouble, and there are rumors that Congress may pass legislation allowing states to default on their debts in some fashion, thus affecting business profits and affecting those who bought state and local bonds.
On the other hand, the stock and commodity markets have recently powered higher in spite of all the bad news out there, due to Bernanke and his gang, and that might possibly continue.
So, I’ll begin moving back in when the risks seem balanced by the opportunities… especially for the younger clients who are still working.  It may take a little longer to get back into things for the retired clients…. I’ll be calling you to chat about your individual situation soon.
ALSO, you should have recently received a Quarterly Report from Scottrade and/ or Interactive Brokers. Several people have been confused by those reports, so please call me if you have any questions.  I’ll be happy to sit down with you and review them line by line and show how they reconcile to the Morningstar reports I send you each Quarter.
Thanks again for your relationship.
Dale