Going to Jackson Hole, What Should I Tell The Feds?

	As you may have heard, the Federal Reserve members are meeting in Jackson Hole this week for their annual “Back to Nature” event.  You may recall last year when they were at Jackson Hole, Mr. Bernanke announced the beginning of QE2, another round of government stimulus aimed at getting the economy working by buying back government issued bonds.  Could QE3 be announced on Friday?  No one knows for sure, but I wanted to let you know I am on my way to Jackson Hole this week and was wondering if there was any message that you want me to deliver to the Feds?  I can’t promise that they will listen, but I will give it a try!     Shannon and I are going to take a quick trip to see our parents who still live in Idaho and we are going to take a detour to Jackson Hole (only 2 hours from my hometown) to soak up the beauty and serenity of some beautiful country. We will be back after Labor Day.  Of course the office is still open and I can always be reached if you need to talk, just call Jenna or Brittany. I wanted to give you an update as this month has been one of the most volatile and unpredictable in my 25 years in the business. There has been a tremendous amount of negativity about the economy and the markets and I wanted to share with you what we have done and what we expect going forward for the rest of the year.    I do not want to be overly technical, so if you have questions please don’t hesitate to call if you would like more data.  According to dshort.com, the S&P 500, suffered a 56% decline from October 2007 to March 2009. It then rallied back 101.6 % from its low point in March of 2009, 676, to approximately 1370 in May of this year.  From 1370 in May to 1125 today is nearly an 18% correction.  Needless to say, quite a roller coaster ride and very hard on everyone emotionally and financially.  As you know we have chosen to adapt to the market and the “new norm.”  We do not believe buy-hold and hope will work as well in this market as an Advance and Protect Investment Strategy.  Remember, our goal is to participate in 60-80 percent of an up-trending market, and not participate in 60-80 percent of the down-trends. The first half of 2011 was profitable, but recent economic data, political events, debt issues, and unemployment rates have taken a lot of steam out of what looked like an economic recovery.  This data is not looked upon favorably by the markets. In June and July, we had several issues: mutual funds, variable sub-accounts, stocks, bonds, and ETF’s break through their supporting technical data and we sold them after some nifty gains over the preceding quarters. Most of this activity was at approximately 1280 on the S&P.  Our portfolios were in a more conservative posture by July’s end and in Money Market in August.  We are very pleased that our systems warned us of a weakening in the markets and we took advantage.  We currently hold more in cash than we have had in the last 2 years.  The good news is that we are in the Protect side of our Strategy…for how long I don’t know.  What I do know is that we are adapting to our environment by not being bullish or bearish, just realistic.  The market is smarter than we are so we must bend and adapt to what it is giving us.  I believe that we could still see more downside in the market, maybe to around 900-1000 on the S&P 500 over the next few quarters.  The good news is that we have cash (Money Market) assets available to deploy and buy when the markets start to turn around…and at some point I am confident they will turn around.  Behind the scenes we have seen this pattern unfold just recently, when our research and systems told us to start investing more heavily in March of 2009, and it proved to be very accurate.  Those same systems are telling us today to protect assets and raise cash levels. Most importantly, we truly believe in our process and how it works.  You have heard me say over and over again “process over attitude, opinion and emotion.” When trends shift, our process reports that and we immediately act.  We are very pleased with the technical and fundamental data we are receiving.   Currently, we hold only one position in the ETF Model-Treasuries (TIP) after selling out of Gold (GLD) earlier in the month.  The Stock model is long in only three positions, and the bond, mutual fund, and variable annuities are mostly in cash.  It is important to note that there can be two regrets with investing. The first is being investing while the market declines and the second being in cash when the market goes up.  I believe these two regrets carry two entirely different kinds of pain and emotional toll.  Watching values dwindle is much more difficult than watching short rally’s in the markets while parked in cash.  Our goal again, is to participate in 60-80 percent of the up-trend and miss 60-80 percent of the downside.  We know we won’t hit it perfectly, but we do believe this is better than just riding the roller-coaster with buying-holding and hoping things will change. In conclusion, what would you like to say to Mr. Bernanke and the Feds if you were able to have your voice heard?  Maybe I won’t be able to deliver it for you in Jackson Hole this week, but collectively as a Nation and with one voice we may be able to make a difference and shape policy that is going to be in the best long-term interest of our Country!
	Sincerely, Jeff Sorensen Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered by Sorensen Wealth Management (SWM). SWM not affiliated with Triad Advisors.