Hagen Financial Network, Inc.: September 2015

Monday, September 28, 2015

Why didn’t the Fed raise rates in September? Read about that and more in this week's PEEK of the WEEK financial news!

Peek of the Week

Sept. 28, 2015

The Markets

Oh, the uncertainty!

Investors are keeping one eye on the Federal Reserve and the other on politicians trying to determine what may happen during the last quarter of the year.

The Fed, which is the central bank of the United States, is responsible for conducting monetary policy with an eye toward full employment and stable prices. If, as St. Louis Fed President James Bullard told Reuters, the economy is near full employment and inflation is sure to rise, then why didn’t the Fed raise rates in September?

Reuters reported voting members of the Federal Open Market Committee (FOMC) decided uncertainty in global markets had the potential to negatively affect domestic economic strength. Mr. Bullard believes the decision puts an October increase in doubt, too, according to Nasdaq.com. Mr. Bullard told reporters:

“For the committee, it's always hard to have made a big decision at one meeting and come back at the next meeting. The key question will be what kind of data did you get during the intervening period that changed your mind, and it's not that clear what data we will have in hand in October that we would be able to cite to support my position, relative to what we had at the September meeting. But it is possible.”

Regardless, Chairwoman Janet Yellen made it clear last week she expects to see a rate hike before year-end. That might have helped settle markets, except Speaker of the House John Boehner resigned soon after Yellen spoke. The Speaker’s resignation made a government shutdown this week less likely, according to Barron’s. However, fiscal policy issues haven’t been resolved. A meeting of the political minds this week would set the stage for a mid-December showdown and that’s data the Fed will have to consider if the December FOMC meeting occurs amidst a government shutdown and debt-ceiling crisis.

No one seemed to be happy with the state of affairs this week, and stock markets were awash in red ink.

Data as of 9/25/15	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 (Domestic Stocks)	-1.4%	-6.2%	-1.8%	10.2%	11.1%	4.7%
Dow Jones Global ex-U.S.	-3.4	-9.2	-13.7	0.2	-0.1	0.9
10-year Treasury Note (Yield Only)	2.2	NA	2.5	1.7	2.5	4.3
Gold (per ounce)	0.5	-4.4	-5.5	-13.5	-2.4	9.5
Bloomberg Commodity Index	0.9	-15.2	-25.7	-15.5	-8.7	-6.6
DJ Equity All REIT Total Return Index	-0.3	-4.7	8.4	9.0	11.6	6.9

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg 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 Total Return Index does include reinvested dividends and the three-, 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 the historical 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 not applicable.

what will they say? Soon, cars will be able to talk with one another. Vehicle-to-vehicle communication (V2V) has been tested in Ann Arbor, Michigan, a relatively mild and polite Midwestern town. Now, V2V is being rolled out in New York City, along with technology that allows traffic signals to contribute their two cents. Just imagine what a New York cab might have to say to another New York cab that changes lanes without signaling.

Okay, it’s nothing like that.

The idea is to reduce traffic accidents. If a dangerous situation arises an alert sounds. Gizmodo.com described it like this:

“These sensors send out signals over a specific wireless spectrum band and also receive them from other vehicles, creating a network of communicating sensors that ping when there’s danger… A secondary form of the technology, called Vehicle-to-Infrastructure, does the same thing – but with sensors embedded in stop signs, traffic lights, and other pieces of road infrastructure.”

Soon, people will be able to install V2V on smartphones so they can ping a warning to approaching cars as well.

While V2V seems like a good idea, pinging a warning to a distracted driver moments before a crash and expecting them to respond appropriately may be asking too much. The Economist suggests that automation – giving vehicles the ability to take over – cannot be far behind. “Depending on how you look at it, that’s a good thing – or terrifying… opening cars and buses up to computerized control also means opening them up to hackers… Imagine the fun they could have if thousands more vehicles could be controlled from computers or smartphones.”

Ultimately, intelligent transportation systems are expected to optimize the number of vehicles that can use roadways, helping save money that would otherwise be spent on expanding infrastructure to accommodate population growth.

Weekly Focus – Think About It

“Forgiveness is the fragrance that the violet sheds on the heel that has crushed it.

--Mark Twain, American writer

Best regards,

Leif M. Hagen

Leif M. Hagen, CLU, ChFC

LP Financial Advisor

Securities offered through LPL Financial Inc.,

Member FINRA/SIPC.

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* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be

representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees,

expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S.

Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association.

The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* 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.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

* To unsubscribe from the “Peek of the Week”, please reply to this email with “Unsubscribe” in the subject line, or write us at: Hagen Financial Network, Inc. 4640 Nicols Road, Suite 203; Eagan, MN 55122.

Sources:

http://www.federalreserve.gov/faqs/about_12594.htm

http://www.reuters.com/article/2015/09/19/usa-fed-idUSL1N11P0NL20150919

http://www.nasdaq.com/article/feds-bullard-prudent-fed-policy-calls-for-higher-shortterm-rates--2nd-update-20150925-00433

http://www.barrons.com/articles/vw-offers-a-lesson-in-perfidy-so-does-turing-pharmaceuticals-1443248114?mod=BOL_hp_we_columns# (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/09-28-15_Barrons-VW_Offers_a_Lesson_in_Perfidy-Footnote_4.pdf

Monday, September 21, 2015

Waiting is the hardest part - Read about it in this week's PEEK of the WEEK financial news from Hagen Financial

Peek of the Week

Sept. 21, 2015

The Markets

As Tom Petty often sang, “The waiting is the hardest part.”

Whether it’s waiting for college acceptance letters, medical test results, employment offers, or Federal Reserve monetary policy changes, waiting can produce a lot of anxiety. A 2012 research paper written by Associate Professor Kate Sweeney and Graduate Fellow Sara Andrews of the University of California, Riverside, explained it like this:

“…Although waiting for inevitable events such as the arrival of a bus or one’s turn in line may be irritating…the combination of uncertainty about the outcome and waiting for that outcome can be particularly excruciating. In fact, waiting may be more anxiety provoking than actually facing the worst case scenario…”

That may go a ways toward explaining why markets didn’t rally when the Federal Reserve decided to leave rates unchanged last week. The Federal Open Market Committee’s statement indicated they were concerned, “Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”

On the face of it, continued low rates should have been good news for assets like stocks, according to Barron’s. However, any positive aspects to the news were mitigated by the fact everyone expects the Fed to begin raising rates soon. Investors are waiting for it to happen, and they’re uncertain how economies and markets will react when it does.

Heightened anxiety may be one of the reasons investors responded the way they did last week. On Friday, after mulling the Fed’s decision, national stock market indices around the world – in the United States, England, Germany, France, and Japan – fell significantly, according to Yahoo! Finance.

Now, we’re back to waiting.

If anxiety remains high, markets may be volatile.

Data as of 9/18/15	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 (Domestic Stocks)	-0.2%	-4.9%	-2.7%	10.3%	11.4%	4.8%
Dow Jones Global ex-U.S.	1.3	-6.0	-13.0	1.3	0.9	1.3
10-year Treasury Note (Yield Only)	2.1	NA	2.6	1.8	2.7	4.3
Gold (per ounce)	3.8	-4.8	-6.5	-13.6	-2.3	9.4
Bloomberg Commodity Index	-1.4	-15.9	-27.2	-15.9	-8.7	-6.6
DJ Equity All REIT Total Return Index	2.8	-4.4	6.5	7.9	10.8	6.8

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 not applicable.

It’s official. the IGs are in. Ignoble is a word rarely heard in everyday conversation. Merriam-Webster defines it as meaning, “of low birth or common origin, or characterized by baseness, lowness, or meanness.”

The 25^th First Annual Ig^® Nobel Prize Ceremony was held last week at Harvard University. Improbable.com reported, “Winners traveled to the ceremony, at their own expense, from around the world to receive their prizes from a group of genuine, genuinely bemused Nobel Laureates…” Winners completed research that made people laugh and then caused them to think.

· The Management Prize went to Gennaro Bernile, Vineet Bhagwat, and P. Raghavendra Rau, authors of ‘What Doesn't Kill You Will Only Make You More Risk-Loving: Early-Life Disasters and CEO Behavior.’ They examined the link between CEOs’ early-life exposure to major fatal disasters and the financial and investment policies adopted by their companies. They found, “CEOs who experience fatal disasters without extremely negative consequences lead firms that behave more aggressively, whereas CEOs who witness the extreme downside of disasters behave more conservatively.”

· The Economics Prize was awarded to the Bangkok Metropolitan Police, which implemented a new policy in an effort to reduce bribery. They pay a bonus to police officers who refuse to accept bribes, even though the officers are required by law not to accept bribes. (It’s a concept that may resonate with parents.)

· The Literature Prize went to Mark Dingemanse, Francisco Torreira, and Nick J. Enfield, who presented evidence and arguments supporting the idea that ‘huh?’ is a word, and that it “is found in roughly the same form and function in spoken languages across the globe.”

If you’re interested in learning about the ignoble undertakings of other winners (who documented chicken walking like dinosaurs, created bee sting pain indices, and completed other thought-provoking experiments), visit www.Improbable.com.