Dear Valued Clients,

How quickly the seasons change. Summer is here and we are still remembering the past winter as if it was only yesterday. This type of change is very typical of financial markets. The buzz word now is “tapering” and the effect it will have on the bond market and the stock market. Just three months ago the buzz word was “Quantitative Easing” (QE3). Wow, what an abrupt change!

Let me try to explain what this means. Pretend the economy is a very ill patient. After an extended stay in the hospital the doctors have decided it’s time to reduce the amount of medicine (QE3) being administered to see if the patient can get out of the hospital and function on their own. Hopefully, the doctors (FOMC) are correct and the patient (the economy) is well enough to leave the hospital and recover on its own two feet.

What does this mean for you? Interest rates may rise potentially putting pressure on the price of bonds and bond funds (remember there is an inverse relationship between rising rates and bond values). Stock prices should rise if the economy is improving since profits grow as the economy grows.

Craig and I still stick to the investment philosophy of you being paid. We do this through DIVIDENDS, DIVIDENDS, AND MORE DIVIDENDS. We manage your money to create value through dividends. This will help soften the downside and potentially give you income on the upside.

Our company is built around you the clients. You are our biggest asset. We pride ourselves on doing “whatever it takes” to satisfy you. This summer let’s touch base and make sure your goals are still being met.

Enjoy the summer,

PS:  Come on by and see our new offices in Castro Valley.