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Wealth Enhancement Group values quality information. Our team of experts in the investment management department work hard to help keep our clients informed. Please explore the commentary below to learn more about what is going on in the world of finance. View our archives to read past commentaries. If you have questions along the way, be sure to contact us!

August 8, 2011 - Planning for the Certainty of Uncertainty.

In the past months, U.S. investors have been confronted with what seems like never-ending bad economic news.

Every time we're confronted with a new set of problems, that sinking feeling returns and people may wonder "Am I doing the right thing?" or "Should I change course?"

While Standard & Poor's recently downgraded the long-term U.S. debt, the other two credit rating agencies, Moody's Investors Service and Fitch Ratings, reaffirmed the AAA rating. In the midst of more economic problems in Europe, a stock market correction and indications that the growth of the U.S. economy is slowing, investors sought U.S. Treasuries as a safe haven. Our conclusion is that regardless of S&P's comments, the rest of the world sees the United States as one of the best and safest places to hold assets. S&P indicates that the dysfunctional state of U.S. politics was as big a factor as the debt issues in imposing the downgrade.

We're not here to convince you that we as a country don't have issues or that it will be a smooth ride to recovery, but rather, that we wouldn't count out the resolve of the U.S. investor and the ingenuity of U.S. companies to continue to find value and provide products and services to the global market.

This is the third time this year we have experienced significant downturns in the U.S. markets and have seen the resiliency of the stock markets, investors and the U.S. economy. Many people may feel this is 2008 all over again. We don't share that opinion for several reasons. The banks are in a much better position than they were then, U.S. companies are well positioned with cash to take advantage of opportunities, and even when it seemed the darkest in March 2009, the U.S. economy and its citizens were able to meet the challenges.

Today, as countries continue to struggle through tough economic choices, we'll continue to look at the long-term picture and opportunities these uncertain times present to position investments.

At Wealth Enhancement Group we believe in planning for the certainty of uncertainty; no one can predict with accuracy what will happen in the short term. For this reason, we work as your advocate to structure your financial plan so that if you need money, you have a smart place to get it from.

IMPORTANT DISCLOSURES:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance reference is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

MSCI EAFE is an index of approximately 1,045 equity securities issued by companies located in 19 countries and listed on the stock exchanges of Europe, Australia, and the Far East. All values are expressed in U.S. dollars.

Quantitative Easing is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

Mid capitalization, companies are subject to higher volatility than those of larger capitalized companies.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

Materials Sector: Companies that are engaged in a wide range of commodity-related manufacturing. Included in this sector are companies that manufacture chemicals, construction materials, glass, paper, forest products and related packaging products, metals, minerals and mining companies, including producers of steel.

Industrials Sector: Companies whose businesses manufacture and distribute capital goods, including aerospace and defense, construction, engineering and building products, electrical equipment and industrial machinery. Provide commercial services and supplies, including printing, employment, environmental and office services. Provide transportation services, including airlines, couriers, marine, road and rail, and transportation infrastructure.

Consumer Discretionary Sector: Companies that tend to be the most sensitive to economic cycles. Its manufacturing segment includes automotive, household durable goods, textiles and apparel, and leisure equipment. The service segment includes hotels, restaurants and other leisure facilities, media production and services, consumer retailing and services and education services.

Financials Sector: Companies involved in activities such as banking, consumer finance, investment banking and brokerage, asset management, insurance and investment, and real estate, including REITs.

Health Care Sector: Companies are in two main industry groups—Health Care equipment and supplies or companies that provide health care-related services, including distributors of health care products, providers of basic health care services, and owners and operators of health care facilities and organizations. Companies primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products.

International and emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

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