Monday, August 27, 2012

The CFA Institute Welcomes Edward (Eddie) Wilcox as a New Charterholder



We proudly announce that Eddie Wilcox, Partner and Financial Adviser at Rollins Financial, has successfully completed the prestigious Chartered Financial Analyst® Program and has been accepted by the CFA Institute as a new charterholder. The CFA designation was introduced in 1963, and it has since become one of the most respected and recognized investment credentials in the world for its rigorous focus on current investment knowledge, practical analytical skills, and performing in the client’s best interest.

When Eddie decided to earn his CFA designation, he embarked on a graduate-level study program that combines a comprehensive curriculum with stringent professional conduct requirements. The program concludes once candidates pass three consecutive and increasingly difficult exams that are widely considered to be among the most intensive in the investing profession. Only around one in five candidates who enroll in the CFA Program pass all three exams and meet the professional and ethical requirements to earn the charter. Earning the designation demonstrates Eddie's mastery of the skills most needed for investment analysis and decision making in today's fast-evolving global financial industry.

"Earning the CFA charterholder has been challenging but rewarding. I believe the knowledge I've gained will be an invaluable supplement to my financial work experience as it has provided me with a strong foundation from which to draw when analyzing investments and managing portfolios," explained Eddie.

Eddie has worked for Rollins Financial for over 10 years, joining the firm as a client specialist and asset manager, and becoming a partner in 2007. His primary responsibilities are designing and modeling complex investment strategies and coordinating their successful implementation with other members of the investment advisory group. Eddie is also Rollins Financial’s chief compliance officer, and as such, he is responsible for ensuring that we are in compliance with regulatory and legal obligations.

Since completing the CFA program, Eddie has been enjoying spending some quality time with his family again. Eddie’s wife, Jennifer, also works at Rollins, and she is especially proud of his accomplishment. After all of his hard work, she’s quite happy to see Eddie chasing their very active daughters around instead of his nose being buried in textbooks all the time.

Congratulations, Eddie! We’re so glad you’re on our team.

CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.

Tuesday, August 14, 2012

SUMMERTIME, AND THE LIVIN’ IS EASY

From the Desk of Joe Rollins
We’re not even halfway through August, but the end of summer looms near. When I was in high school, the thought of summertime coming to a close brought with it the dread of returning to school. In my case, I also knew that the start of two-a-day football drills in the tremendous summer heat was just around the corner. Even so, my school year didn’t start until after Labor Day, but children in my present neighborhood returned to school last Monday, on August 6th. I’m sure most kids will agree that the end of summer comes way too soon.


Much like those summertime months before school begins, the month of August is typically slow for the stock markets since so many traders are vacationing and are generally unconcerned with trading or their everyday job responsibilities. Many argue that September is the worst month of the year for the stock markets. This isn’t for any particularly good reason; it’s just that the traders return to work after Labor Day and tend to emphasize the negatives of the capital markets by their activities on the short side of the market. While August is never a particularly good month, however, September has always been considered the worst month in the trading year. But I think that has changed in recent years for the better.

In prior years, traders had to actually be present on the New York Stock Exchange floors to make decisions, but due to technology, that isn’t a requirement anymore. Vast amounts of stocks can be traded from a cell phone from virtually anywhere in the world these days. Moreover, in the past, much of the information we gained on the financial markets was through reading the morning edition of the Wall Street Journal. However, by the time we receive the morning paper, that news is as old as the phonograph. Financial news can now be obtained in real time, 24 hours a day seven days a week. Things just aren’t the same as they were years ago – I simply don’t believe that there are many traders left who pack up their bags at the beginning of August and completely ignore the market until after Labor Day.


It’s been approximately six weeks since the second quarter ended, and the financial markets continue moving up slowly but surely. The major media rarely reports that the stock market for 2012 has been as good as it’s actually been so far this year. Through August 10th, the Standard & Poor’s Index of 500 Stocks is up 13.2% for 2012, which would be an excellent return even at year end.

Since June 30, 2012, the S&P is up 3.7% in the intervening six weeks, and even though the increase has been gradual and on relatively low and unexciting volume of stocks being traded, it continues to be quite positive and in an upward trend. I still hold my projection of net double-digit increases for the entire year, and we are almost there today. None of this could be deemed to be anything but positive for building your wealth and making your retirement years more secure.

Not much has changed in the economic world since my last post. Corporate earnings continue to be excellent and trending upward – up more than 5% over the last quarter. There certainly has been some moderation of exuberance, but even though sales were not as high as projected in the second quarter by major U.S. corporations, net income was even higher. As I have often written, net income is the most important component to higher stock prices. With net income setting quarterly records for high levels, that is certainly very positive for future stock prices.

The economy is clearly positive and gradually growing, although no one should have any illusions that we will wake up tomorrow with GDP skyrocketing. We are currently facing a very slow and gradual increase which is somewhat frustrating, although not a negative. With the government stimulus being injected into the system, more should be expected (although it doesn’t appear to be forthcoming).

Only a few months ago, several commentators in the financial press were proclaiming that the U.S. had fallen into a recession. One economist even guaranteed during a television report that the U.S. was in a recession. It’s amazing how quickly opinions change. Very few of those same commentators are now proclaiming that we’re in a recession, and if you’ll review my posts over the last several years, I’ve never opined that the U.S. was in a recession. I don’t know why some commentators take such an extreme position when the evidence is clearly contrary to their proclamations. Perhaps the truth isn’t as interesting as the myth they are trying to perpetuate.

There have been gradual and positive signs of life in the real estate markets. Where I reside in Atlanta, there’s actually a shortage of homes for sale. And throughout resort areas, there are massive inflows of capital from foreign countries to buy real estate for cash. Even though these houses are selling for less than they sold for a few years ago, at least they are finally selling. Given the low inventory for new houses and the ending of the foreclosure cycle, I believe we will see new home construction start picking up again. This is a positive that will impact the economy in many ways.

I’ve suggested many times that now is the right time to look into refinancing your principal mortgage. Thirty-year conventional home mortgages are presently in the 3.75% range and 15-year mortgages are in the 2.8% range. If you haven’t looked into refinancing your mortgage recently, it’s highly unlikely long-term rates will ever be this low again. There are many programs available to help underwater homeowners. (Please see our Smart Refinancing Strategy post.) If you sit by idly and don’t attempt to refinance your mortgage, you may be giving up the opportunity of a lifetime for these low rates.

It wouldn’t surprise me to see the market moderate over the next six weeks as the upward move we’ve enjoyed has caught a lot of the professional money managers on the blind side. I would expect the market to move sideways or marginally down for the next six weeks or so before the last burst of buying that occurs at the end of most tax years. We should expect to see the final quarter of the year have a moderate increase, much like what we experienced in 2011, and at the end, double-digit gains are still certainly possible.

On the election front, Mitt Romney announced his vice-presidential running mate on Saturday, Wisconsin congressman Paul Ryan. I have kept my eye on Congressman Ryan for many years, and have admired his thoughtful views on the economy and the federal budget. In my opinion, Romney has finally chosen someone who is capable of discussing the budget and fiscal responsibility on Capitol Hill. Our country faces no more serious threat to our future than federal budget deficits, and if the Romney/Ryan ticket wins, we’ll finally have leaders in office who understand it.


Perhaps this presidential election will move away from the silly, demeaning arguments regarding personalities (or lack thereof) and focus instead on subjects that are most important to Americans – fiscal responsibility and the economy. The voter’s choice this November is either for bigger government, more regulations and higher taxes or smaller government, less regulations and lower taxes. I don’t think the choice could be clearer.

Paul Ryan developed a balanced budget approved by the House, and now there is a candidate who has talked the talk and walked the walk. In contrast, the U.S. Senate has not approved a budget in the last three years. The upcoming discussion over the next 90 days of this election cycle is going to be extraordinarily informative. In the last four years, $5 trillion of debt was created. It is absolutely clear that Medicare and the federal deficits are unsustainable. Do you want bigger or smaller government? This November, the majority of Americans will get to decide.

As always, the foregoing are my opinions, assumptions and forecasts. It is perfectly possible that I am wrong.


Best regards,
Joe Rollins