Thank you to all who attended our first annual Educational and Market Update Event at the Fargo Country Club in North Dakota. We also would like to thank John Tousley, CFA, Vice President with Goldman Sachs who provided a very robust review of our current economic situation and discussed market strategies that will be profitable in the year ahead. Additionally we want to thank Greg Brousseau, founding partner and co-CEO of Central Park Group who spoke on the basics of alternative investing and discussed some potential opportunities today for unusual market conditions. We would also like to say thank you to those who couldn’t attend, but expressed interest and wanted follow-up information on the event.
At the meeting I discussed several points worth noting here. Recent housing, retail sales, and employment data have us cautious. But we still remain optimistic about the long-term global recovery. I feel jobs are still the key to a sustainable US recovery. Without traction in our labor markets we may end up requiring more support for a somewhat stable but potentially still deflating real-estate industry. Unfortunately the red ink is piling up from prior spending commitments and a lack of revenue, and it’s causing sane people to question how much more we can afford to support. In fact, in Europe, belt tightening, austerity measures and tax proposals are being proposed to handle their debt crisis. I’m concerned that while their actions are necessary for long-term fiscal health, their timing is poor. You can’t fix problems in a day that have taken years to develop.
On the brighter side, the BRIC’s (Brazil, Russia, India, China), are growing fast. China recently announced that they’ll let their currency float, rather than be pegged to the US dollar. That’s likely to encourage consumerism and consumption in that highly-populated country—especially of US exports. Since the emerging countries have huge currency reserves, they can also afford to invest in infrastructure building; such as roads, bridges and factories–and further stimulate global growth.
In closing, I want to mention an item I didn’t have time to cover at the event. Business owners beware: it looks like a bill to tax all of the profits of personal service S-Corporations as wages will probably pass soon. Starting next year, paying reasonable salaries and taking profits on your company’s investments, as dividends, will not be allowed. It is mindboggling, but apparently major abuses are to blame. C Corporations may warrant another look—especially since personal tax rates are probably going higher soon.
By the way, despite our concerns, we wholeheartedly believe in the American Spirit. We will rise and meet the challenges ahead. You had to love that US/Algeria soccer game. Go USA!
As always, contact me with your questions or concerns.
Don Miller
