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Economic, Market Review and Outlook: 2012 Recap

Overall results were mostly positive in 2012, but getting there was a wild ride characterized by economic frailty, political uncertainty and volatility in the markets.

Gross Domestic Product (GDP), the primary measure of economic activity in the U.S. typically grows rapidly after a deep recession, but this time has averaged just 2.1% per quarter on an annualized basis. Nevertheless, early in 2012, investors were hopeful for a robust expansion due to signs of improvement in the housing market and employment.

By April, job growth was fading, the housing recovery was sputtering and other economic reports were mixed at best; so the U.S. economy continued to plod along with subpar growth. China and other emerging economies slowed, much of Europe sank back into recession while uprisings in the Mid-East and political uncertainties in the U.S. also weighed on investors.

Stock Market
Economic optimism early in the year pushed stocks sharply higher in the first quarter, but when the optimism disappeared in April, stocks declined through June. After a strong recovery in late summer, the market sold off again in the fall.

Corporations reported mostly higher and slightly better than expected profits throughout the year, despite the economic headwinds. This, along with historically low interest rates and some positive reports on the economy, helped stocks to recover by the end of the year. The S&P 500 closed 2012 with a gain of 13.5% or a total of 15.8% with dividends included.

On the international markets, stocks in both developed and emerging economies experienced much the same pattern as U.S. stocks in the first half of 2012, but much less of a slide in the fall and so ended the year with generally higher gains than their
U.S. counterparts.

Bond Market
Interest rates fell sharply during the second quarter and remained in a low trading range the rest of the year. Falling interest rates caused bond values to rise so the major U.S. bond market index was up 4.2% in 2012. That was good for total return, but interest income was minimal. The 10-year U.S. Treasury bond closed the year with a yield of 1.76%, down 0.11% from the end of 2011.

European and emerging market bond indexes enjoyed double digit total returns in 2012, while bonds in the Asia-Pacific region experienced more modest gains similar that of the U.S.

Commodities
Average commodity prices were somewhat higher in 2012 even though crude oil, one of the largest single components of most commodity indexes, fell throughout the year. Livestock, precious metals and other agricultural products posted the biggest gains for the year.

Looking Forward
Just after the end of the year, Congress and the President came to an agreement on tax rates, but failed to act on government spending and the debt limit. (See page one.) How this will affect the economy in the long run remains to be seen, but was viewed as a positive step in the short term to avoid the so-called fiscal cliff and markets rallied on the news.

In any case, many analysts expect U.S. companies to continue to increase earnings at a modest rate in 2013. Valuations remain at reasonable levels, historically speaking. Barring economic calamity, stocks appear more attractively prices than bonds.

Most investment strategists believe world economies will grow faster than the U.S. in 2013. Thus, diversification into international stocks or U.S. companies with significant sales and profits from foreign operations may
be important.

David RiggsVice President,Trust Investment Officer

Contact a Representative Today

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Personal Social Media Account Security

For many of us, social media has become a part of our everyday lives and helps us conveniently keep tabs on the people and topics we care most about.

Recently however, there has been an increase of social media account take overs by cybercriminals. As stated in the media, one contributing factor in some of the social media account takeovers has been the use of weak passwords.


Tips for creating a stronger password:


  • Passwords should typically:
    • be at least 8 characters in length
    • contain at least 1 number
    • contain at least 1 special character (!@#$$%)
    • contain both upper and lower case characters.
  • Do not use your name, date of birth, maiden name, mother’s maiden name, address, or other easily guessable words for passwords. 
  • Another way to create a strong password is to use a series of words that do not relate to each other. For example, JumpingFastRelaxStop!#.

 


Social media additional security options:


Another way to help avoid social media account takeover is to use the additional security options available. Two-factor authentication adds an extra layer of security that drastically decreases your chances of account takeover. Two-factor authentication is essentially the using of two separate components to verify your identity, the combination of something you HAVE with something you KNOW. A good example of two-factor authentication you most likely are already used to is withdrawing cash from an ATM, for example. Having both your debit card AND knowing a pin number is required to complete the withdrawal and protect your identity.

A popular and convenient two-factor authentication method is using a combination of both an online password and a text message verification sent to your phone. Enabling this type of authentication typically follows this process:

  1. Enter your password into Facebook or another website
  2. Immediately receive a text on your phone with a temporary pass key
  3. Enter the passkey received back on the site/app and you’re logged in

This may seem like overkill, but enabling this two-factor authentication will drastically decrease the chances of your social accounts being hacked. And actually, the process of setting up and using this authentication is pretty simple and convenient.

 


How to enable two-factor authentication:


Many popular social networks like Facebook, Twitter, LinkedIN, and others already support two-factor authentication. To learn more about how to do so on the most popular sites on the web, be sure to check out this article:

http://socialcustomer.com/2014/04/how-to-enable-two-factor-authentication-on-50-top-websites-including-facebook-twitter-and-others.html

Wednesday, April 22, 2015

READ BLOG ENTRY

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Economic, Market Review and Outlook: 2012 Recap

Overall results were mostly positive in 2012, but getting there was a wild ride characterized by economic frailty, political uncertainty and volatility in the markets.

Gross Domestic Product (GDP), the primary measure of economic activity in the U.S. typically grows rapidly after a deep recession, but this time has averaged just 2.1% per quarter on an annualized basis. Nevertheless, early in 2012, investors were hopeful for a robust expansion due to signs of improvement in the housing market and employment.

By April, job growth was fading, the housing recovery was sputtering and other economic reports were mixed at best; so the U.S. economy continued to plod along with subpar growth. China and other emerging economies slowed, much of Europe sank back into recession while uprisings in the Mid-East and political uncertainties in the U.S. also weighed on investors.

Stock Market
Economic optimism early in the year pushed stocks sharply higher in the first quarter, but when the optimism disappeared in April, stocks declined through June. After a strong recovery in late summer, the market sold off again in the fall.

Corporations reported mostly higher and slightly better than expected profits throughout the year, despite the economic headwinds. This, along with historically low interest rates and some positive reports on the economy, helped stocks to recover by the end of the year. The S&P 500 closed 2012 with a gain of 13.5% or a total of 15.8% with dividends included.

On the international markets, stocks in both developed and emerging economies experienced much the same pattern as U.S. stocks in the first half of 2012, but much less of a slide in the fall and so ended the year with generally higher gains than their
U.S. counterparts.

Bond Market
Interest rates fell sharply during the second quarter and remained in a low trading range the rest of the year. Falling interest rates caused bond values to rise so the major U.S. bond market index was up 4.2% in 2012. That was good for total return, but interest income was minimal. The 10-year U.S. Treasury bond closed the year with a yield of 1.76%, down 0.11% from the end of 2011.

European and emerging market bond indexes enjoyed double digit total returns in 2012, while bonds in the Asia-Pacific region experienced more modest gains similar that of the U.S.

Commodities
Average commodity prices were somewhat higher in 2012 even though crude oil, one of the largest single components of most commodity indexes, fell throughout the year. Livestock, precious metals and other agricultural products posted the biggest gains for the year.

Looking Forward
Just after the end of the year, Congress and the President came to an agreement on tax rates, but failed to act on government spending and the debt limit. (See page one.) How this will affect the economy in the long run remains to be seen, but was viewed as a positive step in the short term to avoid the so-called fiscal cliff and markets rallied on the news.

In any case, many analysts expect U.S. companies to continue to increase earnings at a modest rate in 2013. Valuations remain at reasonable levels, historically speaking. Barring economic calamity, stocks appear more attractively prices than bonds.

Most investment strategists believe world economies will grow faster than the U.S. in 2013. Thus, diversification into international stocks or U.S. companies with significant sales and profits from foreign operations may
be important.

David RiggsVice President,Trust Investment Officer

Contact a Representative Today

Back to Education Resources

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