2011-11-28 Horizon Commentary

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  222 EAST MARKET STREET, P. O. BOX 1407, NE ALBANY, IN T O EW NDIANA 47150 PHO ONE: 812.206.0 0020 FAX: 812.618.2694 Week Commentary kly y Novem mber 28 2011 8, The Ma arkets mall fter “It’s a sm world af all.” Living in an age of je travel, the internet and mobile com n et e d mmunication have its ad n dvantages. It makes ou world of 7 billion people seem a bit smaller si ur b ince we’re ju one plane ride or “on ust e ne boot of th computer away from connecting with anyon in the wor he r” m
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    WeeNove   The M  “It’s a s Living inmakes oboot of t But, alon WorldwiWhat haestate m A bit cloprices ineuro-zonU.S. is c What’s dactually       I          f     P    222 ly Comber 2 rkets all world aan age of jr world of e computerg with thede interconpens in Chirket or a reser to home,the U.S., ace countriesught in theisappointinerformingur trade de   ndustrial presidential bctober caronsumer seom the Uniersonal inclack Friday EAST MARKEPH mentar, 2011  ter all.”t travel, thebillion peo” away froood comesectedness nna, for exaolt againstthe sovereicording too the core icross fire.about beinkay. Consiicit declineduction rosuilding impales hit thentiment inersity of Mme in Octosales rose s STREET, P. ONE: 812.206.0  internet anple seem aconnectinhe bad.ot only conple, doesn’he governmgn debt proarketWatcGermany -g joined at ter these pofor the thirstrongly inovements a   highest leveovember roichigan ander showedharply from . BOX 1407, N020 FAX: mobile coit smaller siwith anyonects us socit necessarilent could hlems in Eur. As the de- which hadhe hip withsitive pointsd month inOctober.re touchingl since Febrse to the hiThomson Rhe largest ia year ago.  W ALBANY, I812.618.2694   municationce we’re je in the woally, it alsostay in Chive repercuope are helt problem sa failed bourope is th:eptember,record highuary.hest level seuters.crease sinc DIANA 47150  have its adst one planld.connects usna. A collasions arouning keep a lpreads fromd auction lat the U.S.hanks to ris   s.ince June, ae March.vantages. Itride or “oneconomicalse of their rd the world.id on stock the periphest week -- tconomy ising exports.cording toely.ealralheata    Sources: Economist; MarketWatch Granted, these improvements are coming off a low base and are so fragile that the modestrecovery in the U.S. could get derailed if the euro-zone situation continues to deteriorate. Oursmall world is now focused on Europe and whether it can pull out of its debt debacle. Time to doso is running out for our friends across the pond. Data as of 11/25/11 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year Standard & Poor's 500 (Domestic Stocks)-4.7% -7.9% -2.6% 10.6% -3.5% 0.0%DJ Global ex US (Foreign Stocks) -5.7 -21.2 -17.5 9.7 -5.3 3.810-year Treasury Note (Yield Only) 2.0 N/A 2.9 3.1 4.5 5.0Gold (per ounce) -1.8 19.7 23.0 27.2 21.5 20.0DJ-UBS Commodity Index -2.2 -12.7 -3.2 5.4 -3.8 4.7DJ Equity All REIT TR Index -5.7 -4.0 -0.2 23.4 -3.5 9.2 Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend)and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and thethree-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of thehistorical time periods.Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means notapplicable. DOES IT MAKE SENSE to invest outside of the United States? The concept of diversificationsuggests that you own a diverse group of investments that have uncorrelated returncharacteristics. One of these diverse groups of investments could include non-U.S. stocks. Thatmight make sense because, as the following chart shows, the U.S. stock market captures less thanone-third of worldwide stock market value based on market capitalization. % of World Equity Market CapitalizationCountry 5 Years Ago Mid August 2011 5-Year Change 1. U.S. 36.05% 29.14% -6.91%2. China 1.36 7.87 6.523. Japan 10.93 7.73 -3.204. UK 7.76 6.43 -1.335. Hong Kong 2.98 4.88 1.906. Canada 3.25 4.20 0.967. France 4.95 3.33 -1.628. Germany 3.35 2.80 -0.559. India 1.43 2.77 1.3510. Brazil 1.34 2.72 1.37 Source: Bespoke Investment Group, August 22, 2011;  New Forces in the World Economy  by Brad Roberts The above chart shows some interesting trends:    The U.S. is still, by far, the largest market in the world, but it has declined substantiallyin the past five years.    China has catapulted to second place with dramatic growth in the past five years.       Japan, UK, France, and Germany join the U.S. as developed countries that have lostground over the past five years.    Emerging countries such as Hong Kong, India, and Brazil have shown strong relativegrowth.    Although not shown on the chart, back in the late 1980s, Japan’s stock marketrepresented 45 percent of world equity market capitalization. Now, it’s less than 8percent due to a 20-year bear market.As the world turns from developed countries to emerging ones, we are keeping our eyes openand our pencils sharpened for the investment opportunities that might arise beyond our borders. Weekly Focus – Think About It  “We live in a wonderful world that is full of beauty, charm and adventure. There is no end to theadventures we can have if only we seek them with our eyes open.” --  Jawaharial Nehru, First  prime minister of independent India  Best regards,   Your Horizon Team,    Barbara L. Geltmaker, AIF®, CRPC®    JoEtta Warren, CRPS®    Marcia Mattingly, CFP®    Becca McGinty    FIND US ON FACEBOOK!   P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us toadd them to the list, please reply to this e-mail with their e-mail address and we will ask for theirpermission to be added.   Securities offered through LPL, Member FINRA/SIPC. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.   * The Dow Jones Industrial Average is a price-weighted index of 20 actively trade blue-chip stocks.   * The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the NationalAssociation of Securities Dealers Automated Quotation System.   *Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.   * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.* Consult your financial professional before making any investment decision.* You cannot invest directly in an index.   * Past performance does not guarantee future results.* This newsletter was prepared by PEAK.   To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject line orclick here.  
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