A Market Stumble

 The month of June saw the first significant market drop of the year. In the span of 3 days, the stock market dropped over 7%! Since then, the market has bounced back 2%, but it goes to show that the stock market, and the economy, are not on the firmest footing. Our use of covered call options cushioned accounts from seeing as severe of a drop and left us in a good position to continue to earn a fair return for the rest of the year.

The stock market has been on a tear so far this year. We are not expecting it to continue. While the economy is muddling on through, the market has run ahead based on comments out of the Federal Reserve and other political figures. It was comments from the Fed Chairman Ben Bernanke that sent the markets sliding in June. It is a difficult investing environment when the market reacts so violently to comments made by the pols.

Long-term, we are bullish on the U.S. economy. Houses are starting to sell. The job market is better. Banks have gotten back on their feet and are in much better financial shape than before. The U.S. economy is growing, albeit slowly at a rate of 1.8% for the first quarter. That being said, we still have a long way to go with the potential for bumps in the road ahead.

Shifting gears, we are excited about changes happening here at Cantlon Financial Planning. With the growth in our firm, we have outgrown the retail systems at Fidelity that we have been using for the past 30 years. In order to improve our trading capability as well as keep our costs low, we need to transition to the Fidelity Institutional platform. This change will not impact you. If you access your accounts via Fidelity.com, your experience will not change. You will still receive monthly statements (as you always have), but the color of the statements will change from a green tinted paper to a blue tinted paper. The information provided on the statements will stay the same. As in the past, we will NOT have any ability to access or transfer funds into or out of your account. This transition is something that will take a couple of months. We will be calling each household before we send the transition documentation to you in order to eliminate any surprises. If you have any questions about our change to the Fidelity Institutional platform, do not hesitate to call us.

We would like to thank everyone for their business. It is because of your trust in us that we are able to serve your needs. Remember that we are more than just investment managers. We are a full service financial planning firm. If you have any questions of a financial nature (can I afford to retire?) or are looking for impartial financial advice (should I refinance my house?), please give us a call. We would love to help.

Very Truly Yours,

Michael F. Cantlon

Robert T. Gephart