Summit Update
First things first, we’d like to congratulate Ken and Nicole on the birth of their son Jack!  Jack was born on June 23rd, 9 lbs, 2 ounces. Nicole and Jack are doing well, and Charlotte is adjusting well to being a big sister.  We would also like to wish you a blessed Fourth of July weekend! Now, on to the commentary!

A Greek Tragedy
June proved to be one of the most volatile months of the year for stocks and bonds because of the potential for Greece to leave the Eurozone and its common currency, the Euro. After a dismal month in the stock market, the Dow Jones Industrial Average finished 2.17% lower for the month, and that led it 1.1% lower for the first half of the year (source: It’s hard to believe that we have six months in the books for 2015 and the Dow is negative 1.1%. Bonds, also, have taken their lumps. The bond index we follow, the Barclays US Bond index (AGG), finished the month down 1.27% and down 1.42% year to date (source: With both stocks and bonds down, it has created a difficult environment for most portfolios.

We believe this is a time to be patient rather than reactionary. Overall it was a pretty good month until Greece hit the headlines, and there’s a good chance that after Greece finds a solution, the stock and bond markets could resume their previous trends.

Within our managed portfolios at TD Ameritrade, we took some profit and sold the majority of our Electronics Technology fund, as well as our Consumer Discretionary, and Consumer Staples funds before Greece started to make headlines again and it has paid off. We left some of that money in the money market fund, but also purchased some bonds after a particularly volatile stretch in the bond market. With the increased volatility in Europe we believe the Fed’s plan and incentive to raise interest rates will continue to be pushed back, helping bonds recover recent losses.

Recently, a good portion of corporations have been using their profits to buy their own shares back. This is referred to as “financial engineering”, and it’s a way to artificially prop up a stock price. The all-time record for stock buy backs was set the first quarter of 2015. The previous record was the fourth quarter of 2007, shortly before the financial crisis (source: This technique makes a lot of sense when earnings are starting to slow down and a chief financial officer is trying to make the stock price look good (source:

According to our research, there is a good chance that the United States economy is slowing down, and stocks may follow. We do not believe it is time to sell all of your stocks and move to cash or short term bonds yet, but the ups and downs of the stock and bond markets has been nothing short of a rollercoaster. Please remember that we monitor the stock and bond markets daily, and we are doing everything we can to navigate this difficult environment. We do not believe this is a good time to add risk into your portfolio unless you fully understand how potentially overvalued the stock market may be because of these unprecedented corporate buy backs. We are very happy that we moved to TD Ameritrade because the ability to be agile at this time could prove to be very helpful, especially if the market and the economy were to spiral further down. If we deem it prudent, we could invest in a way that would actually profit if the stock or bond markets were losing consistently because of our access to inverse funds.

Many of our economic indicators have turned yellow, but are not yet red. We are always aware of the fact that the market has had a good number of years in a row without an annual loss, and a very long streak of avoiding a 10% correction. This is concerning, so we typically tend to play defense shortly after our indicators turn red rather than waiting it out. For now, we’re watching and waiting, but rest assured we have an exit strategy in hand if we need it.

Interesting Notes

July 4th – Thomas Jefferson and John Adams, framers of the Declaration of Independence, both died, hours apart, on July 4th, 1826.  –

Amazing Texas Rain – About 35 trillion gallons of rain water fell on Texas this May – that amount of rain could fill up California’s 200 largest surface reservoirs to maximum capacity three times, or it could cover the island of Manhattan up to the Empire State Building almost four times. If those figures don’t blow your mind, think about this: that is enough water to supply everyone in the world with an 8 oz. glass of water every day for 10,000 days. – 12 News KPNX, May 30, 2015

Disaster Relief – The American Red Cross received almost $500 million in donations to help rebuild Haiti following the 2010 earthquake, but has built just six permanent homes. – NPR and Pro Publica, June 3, 2015

GMO Trees – To feed their paper industry, Chinese scientists have genetically engineered trees that grow up to 10 times faster than natural trees. – NPR, May 26, 2015

Apple Patents – Apple’s Jony Ive, who has worked on nearly every major Apple project of the last 20 years, has nearly 5,000 patents to his name. By comparison, Thomas Edison was granted 2,332. – The Los Angeles Times, June 8, 2015

Gambling – More than 94,000 gamblers who placed a $2 bet on American Pharaoh to win at the Belmont Stakes have not cashed in their winnings, opting to hold on to their piece of history, leaving $315,829 behind at the track.  – CNBC, June 9, 2015

Fireworks – “The Fourth of July fireworks celebration is an annual reminder of how useless my dog would be in a war.”  – Anonymous


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