Mid-Year Update

July 6, 2012

These past six months have been an exasperating experience for both investors and advisors. During the first three months of 2012 the market experienced impressive gains and then the second quarter produced a drawdown leaving the averages in a barely positive area. The most surprising event was interest rates falling to historical lows especially the 10 year note at 1.45% on the June 1. But the confusing part of this rate decline is that someone was still buying at these levels.

The markets are still range bound with the valuations hovering around 12 P/E. This is very low compared to the historical average over the last 50 years of 15%. What we are experiencing is a buyers strike based on unknowns. Taxes, politics, and European confusion coupled with the overhang of tepid employment is keeping individuals out of the equity markets and fleeing to “safety” buying fixed income.

Most of our accounts are flat or have modest gains based on being defensive in our models. We have both opportunities and challenges ahead in the next six months which will require staying disciplined and turning a deaf ear to the noise produced by the talking heads. The main thing to remember is this too shall pass. Once the pain of low rates starts affecting the pocket books of Main Street, and some of the clouds of unknown clear, equities will attract dollars while fixed income will experience historical outflows.

We will be making contact with each one of you either by email or phone to review your current allocations and explore any changes that need to be applied for the next six months.

Bill and the Partners of Riley Wealth Mgt.

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About billriley

Chief Executive Officer, Chief Compliance Officer A co-founder and shareholder, William Riley is a 33 year industry veteran, who observed, many years ago, that over time institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Bill works tirelessly to make the wealth management strategies used by the world’s wealthiest families and largest institutions available to our firm’s individual clients. Bill combines fundamental and technical analysis to minimize investment portfolio risk and maximize potential returns. He uses a variety of non-correlated asset classes, including alternative investments, to minimize portfolio volatility and seek absolute returns in down or flat markets. Finally, Bill believes in a comprehensive approach to wealth management that fully coordinates and seamlessly integrates portfolio management, risk management and asset protection, trust, estate, tax and charitable planning. Prior to co-founding Riley Wealth Management ,LLC, Bill held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. Bill founded Fort Worth branches for Raymond James and J.C. Bradford. Prior to entering the financial services industry, Bill ran his families closely held businesses. Bill’s experience operating family businesses combined with his wealth management experience makes him uniquely qualified to advise entrepreneurs and business owners on a variety of matters including complex and sensitive issues relating to business succession. Bill’s degrees and designations included a Masters Degree in Business Administration (MBA), the Chartered Financial Consultant designation (ChFC), the Chartered Life Underwriter designation (CLU) and the Wealth Management Specialist designation (WMS). A Fort Worth native, Bill is a TCU alum and active in many civic and charitable organizations. Bill and his wife, Marsha, now reside in Colleyville, and they have four grown children and four grandchildren. When he is not working on portfolios or studying financial markets, Bill can be found on the golf courses of Ridglea Country Club.
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