To Default or Not to Default, That is the Question

Back to the future has returned, remember 2011? Why is it that our elected officials need a crisis to make an obvious decision? We are all weary of the gamesmanship that our political leaders use to obtain what is a conclusion that has only one solution. Raising the debt limit is not new.  During the 90’s it was done 17 times. Obamacare reminds me of the opposition to Medicare at its beginning.   You that are on it, imagine what it would be like without it. My solution to this is let it be implemented but delay the mandatory for 1 year. Why one year?   It will probably take that long to fix the web site.  Remember this is a governmental agency. I don’t think those who want the plan are making their decision based on some fine.  All programs of this monumental undertaking have problems in the beginning so a solution to let it proceed will be the best test of success.

Now let’s leave the political theater and explore what Mr. Market is saying. We are still in a corrective environment. However, I sense it will play out over the next few days.  Actually, I am welcoming this because I view this as a buying opportunity.  In fact as a monitor the rebalancing this last quarter there are a long list of fairly valued opportunities in underperforming sectors that historically outperform on a seasonal basis. What I observe is fear starting to show up again so we can buy a little cheaper.  Fear is a short term indicator long term with the Fed driven to the sidelines bull markets don’t end until monetary conditions weaken, and they are still powerfully bullish.

Looking back this is so much like the aftermath of 1974 to 1980. What everyone needs to do is separate politics from their investments. The public did not really come back to stocks until the 1992-1996 periods—long after the bottom. We are experiencing a time when corporations are operating at the highest profit margin, and sitting on loads of cash. There are always going to be problems.  That’s how it was in 1982 to 1994 but the averages still went up. If you’re basing your investment decisions on political shenanigans your chance of success could be at risk.

Bill

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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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