Economy Gaining Traction

This blog will contain the Vanguard Weekly Recap, a section on the economy gaining traction and some questions to see if you are as smart as a 4 year old. As everyone knows, today is the 9th anniversary of a terrorist attack with objectives that included us feeling afraid and impacting our economy. It is appropriate to remember the events of the past and to maintain focus on the important things of life like faith, family, and making each day a better day.

VANGUARD WEEKLY RECAP
As students returned to school, there was at least some encouraging news that prospects for the economy and workers might be brightening. Economic reports during the holiday-shortened week included good news about the improved U.S. trade deficit in July. For the week ended September 10, the S&P 500 Index rose 0.5% to 1,110 (for a year-to-date total return—including price change plus dividends—of about 0.9%). The yield of the 10-year U.S. Treasury note climbed 0.09% to 2.81% (for a year-to-date drop of 1.04%).

ECONOMY GAINING TRACTION
At the end of August, Wall Street Analysts gave their view (buy, hold, or sell) on the value of the US Stock Market and most said hold followed by buy in 2nd place and sell came in 3rd. The percentage who said hold was a record high amount and the percentage who said sell was a record low amount. Normally, a record low percentage for sell would give a record high percentage for buy. Since the economy is in the blahs it means that most of these experts believe that stocks are cheap and are afraid to say buy due to fear of something rising up and hurting the economy.

I believe that economy is gaining traction for the following reasons:
1) Longer term interest rates are rising even though the Federal Reserve are buying long term bonds
2) ^VIX has gone below the 200 day moving average
3) Stimulus money that will give us longer term growth is starting to flow, only 20% had been spent as of the end of August
4) India has recently started allowing imports. Corporations have stated that India shut down imports on January 1, 2010 and now imports are starting to flow
5) A belief by tax payers that government is starting to listen and is acting less crazy.

My view on US Stocks is short-term hold and longer-term buy. Do not let fear in the media, remember that fear sells, get you down.

ARE YOU AS SMART AS A 4 YEAR OLD

Are you smarter than a four year old?

1)How do you put a giraffe in a refrigerator? The answer is - Open the refrigerator, put the giraffe in and close refrigerator.

2)How do you put an elephant in a refrigerator? Open the refrigerator door - remove the giraffe - insert the elephant - close the door.

3)The Lion King is hosting an Animal Conference. All the animals attend except one. Which animal does not attend? Did you say, “The Elephant?” Good! The elephant is in the refrigerator.

4)You come to a crocodile infested river, which you must cross, and you do not have a boat. How do you get across? You jump into the river and swim across. All the crocodiles are attending the Animal Conference.

Enjoy the Simple Things of Life.