Does performance tell the whole story?

American stock markets have delivered some exceptional performance in recent years. Just look at the Standard & Poor’s 500 (S&P 500) Index. Barron’s reported the S&P 500, including reinvested dividends, has returned 215 percent since April 30, 2009. The index is currently trading 50 percent above its 2007 high.

The rest of the world’s stocks, as measured by the MSCI EAFE Index, which includes stocks from developed countries in Europe, Australia, and the Far East, returned 97 percent in U.S. dollars during the same period. At the end of April, the MSCI EAFE Index was 20 percent below its 2007 high.

If you subscribe to the ‘buy low, sell high’ philosophy of investing then these performance numbers may have you thinking about portfolio reallocation. However, performance doesn’t tell the full story.

For example, there’s a significant difference between the types of companies included in the two indices. At the end of April, Information Technology stocks comprised 22.5 percent of the S&P 500 Index and just 5.7 percent of the MSCI EAFE Index. Financial stocks accounted for 14.1 percent of the S&P 500 and 21.4 percent of MSCI EAFE.

It’s important to dig beneath the surface and understand the drivers behind performance before making assumptions or changing portfolio allocations.

Even so, European stocks have the potential to deliver decent performance this year, according to Barron’s. “The case for a revival in European stocks, particularly the Continent’s many multinationals, rests in large part on expectations for improving global growth…This year Europe’s GDP is expected to increase by about 2 percent, after growing 1.7 percent in 2016 – better than the U.S.’s 1.6 percent.”

Last week, the S&P 500 Index moved slightly lower.

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.

the herd of unicorns is growing. Since 1996, the value of companies listed on American stock exchanges has increased from105 percent of gross domestic product (GDP) to 136 percent of GDP, according to The Economist. (GDP is the value of all goods and services produced in the United States.)

During the same period, the number of companies listed on American exchanges has fallen from 7,322 to 3,671.

This fact might lead you to surmise that a few businesses have become dominant in their industries, but that’s not the case. Many companies are choosing to remain private rather than issue shares through an Initial Public Offering (IPO) and then trade on an exchange. Financial Times explained:

“Over the past 10 years the number of initial public offerings in the United States, and the total amount of equity raised by them, are way down on historical averages. If these had held there would have been more than 3,000 new public companies in the past decade. Instead, we have had fewer than half the number of IPOs.”

Why don’t the leaders of vibrant young companies want to issue shares? There may be several reasons:

·         Technology-intensive businesses may need less capital.

·         It’s relatively easy to raise money in private equity markets.

·         Regulatory requirements for public companies increase litigation risk from securities class actions.

·         Private markets are better at allowing companies to take a long-term perspective.

The reluctance to take companies public has fattened the world’s herd of unicorns – private firms worth over $1 billion that are not subject to public-company standards for accounting and disclosure. There are currently about 100 of them.

Weekly Focus – Think About It

“It may be possible to gild pure gold, but who can make his mother more beautiful?”

--Mahatma Gandhi, Leader, Indian independence movement 

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * 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. * All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * 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. 

Is it complacency? Exuberance? Uncertainty? Exhaustion? Insight? Intuition?

Last week, all three major U.S. stock markets gained value and two reached new record highs. On the face of it, that’s great news for stock investors. However, if you look below the surface, the markets’ upward trend may have you scratching your head.

Barron’s reported:

“That the S&P would hit a new high was all the more surprising given the lack of reaction to major headlines throughout the week. On the plus side of the ledger, Congress managed to avoid a shutdown, while on the downside, President Donald Trump tweeted that the U.S. ‘needs a good shutdown,’ and the Federal Reserve appeared more hawkish than prognosticators had been prognosticating. Nothing. Then there’s the prospect of a shocker in the French election over the weekend, though the pro-Europe candidate Emmanuel Macron is widely expected to beat the more-radical Marine Le Pen. Yet here we are. 'It’s like the market took Novocain and is numb to everything,’ says Thomas Lee, head of research at Fundstrat Global Advisors.”

It may be investors give more weight to company performance during the first quarter than to other factors. So far, 83 percent of the companies in the Standard & Poor’s 500 (S&P 500) Index have reported first quarter earnings (earnings measure a company’s profitability). Three-fourths of the companies reported earnings were higher than had been estimated, reported FactSet.

Strong earnings show companies have performed well. Price-Earning (P/E) ratios help investors gauge whether a company’s stock, or a stock index, is a good value. The P/E ratio indicates the dollar amount an investor may pay to receive one dollar of a company’s or an index’s earnings, according to Investopedia.

Last Friday, the trailing 12-month P/E ratio for the S&P 500 Index was 21.9. That’s quite a lot higher than the five-year average of 17.4 or the 10-year average of 16.7.

At the same time, the forward 12-month P/E ratio for the S&P 500 Index was 17.5. That’s also a lot higher than the five-year average of 15.2 or the 10-year average of 14.0.

So, why are highly valued markets moving higher? It’s a puzzle.

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.

Is The U.S. government well run? Stop rolling your eyes. The Economist reported Steve Ballmer, former head of a large tech company, has been working on a new project – completing Form 10-K for the United States of America. The project is called USA Facts: Our nation, in numbers.

If you’re not familiar with Form 10-K, it is the global gold standard of corporate disclosure. United States regulators require public companies to provide comprehensive overviews of their businesses and financial condition each year, including audited financial statements. The information is provided on Form 10-K.

USA Facts aggregates publicly available data from federal, state, and local governments. It then groups the data into four operating divisions based on the ‘missions’ described in the U.S. Constitution:

·         Establish justice and ensure domestic tranquility

·         Provide for the common defense

·         Promote the general welfare

·         Secure the blessings of liberty to ourselves and our posterity

After reviewing USA Facts, The Economist wrote:

“Governance is poor. The country is not managed using a coherent taxonomy. So, for example, the House of Representatives, the Senate, and the White House each split the job of running America into roughly 20 operating divisions. But their categories are different, meaning crossed wires and insufficient accountability…”

The findings aren’t much of a surprise. The government does not compare favorably to corporations. It has a profit margin of negative 3 percent. (The S&P 500 average is 8 percent.) It invests more in the future than most companies. Research and development and capital expenditures are 12 percent of revenue. (The S&P 500 average is 8 percent.) Debt is 289 percent of tax revenues, which are a proxy for sales. (The S&P 500 average is 77 percent.)

If you’d like to review the numbers, visit USAFacts.org.

Weekly Focus – Think About It

“Ignorance and fear are but matters of the mind – and the mind is adaptable.”

--Daniel Kish, President of World Access for the Blind

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * 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. * All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * 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.

It was a good week to own stocks.

Not all financial news was good news last week, but that didn’t prevent U.S. stock markets from moving higher. Barron’s reported on the good news:

“This past week, welcome political news from Europe, a batch of stellar corporate-earnings reports, and a concrete tax proposal to cut corporate and some personal rates sharply gave the bull even more reasons to rally. By Friday’s close, the Dow Jones industrials and other market measures were standing near all-time highs.”

Overall, corporate earnings were quite strong during the first quarter of 2017, according to FactSet. With 58 percent of the companies in the Standard & Poor’s 500 Index reporting in, earnings are showing double-digit growth for the first time since 2011.

That’s exhilarating news for investors.

Economists had less to celebrate. The Commerce Department’s first estimate indicated the U.S. economy got off to a slow start during 2017. Gross domestic product (GDP), which measures the value of all goods and services produced, came in below expectations and grew at the slowest rate in three years. Bloomberg reported:

“The GDP slowdown owes partly to transitory forces such as warm weather and volatility in inventories, which supports forecasts for a rebound as high confidence among companies and consumers and a solid job market underpin growth. Even so, the weakness at car dealers could weigh on expansion, and further gains in business investment could depend on the extent of policy support such as tax cuts.”

Keep an eye on Congress and the Federal Reserve. Changing fiscal and monetary policies are expected to have a significant influence on markets and the economy.

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 did you say? If you find yourself tuning-out in loud restaurants, asking people to repeat themselves frequently, or cupping an ear in an effort to better understand what a friend or colleague is saying, then you may be interested to learn that hearing loss is one of the most prevalent health issues for older Americans. It ranks third, right behind arthritis and heart disease, according to the Hearing Loss Association of America (HLAA).

Hearing loss isn’t just an issue for older Americans, though. Twenty percent of American teenagers experience hearing loss, and it’s a significant issue for combat soldiers and veterans. The Washington Post reported:

“A study by the Journal of General Internal Medicine, which covered over 90,000 veterans of Afghanistan and Iraq seeking VA care from fiscal 2006-2007, may serve as a general guide. Among male veterans seeking VA care, 16.4 percent to 26.6 percent suffer from serious hearing loss and tinnitus, and 7.3 percent to 13.4 percent of female veterans are affected. How much of this is combat-related or due to environmental factors such as background noise, training, and even medication is unknown.”

Remarkably, many people ignore their hearing loss. Just 16 percent of Americans (age 69 or younger) with hearing issues use hearing devices. It’s a decision that can have serious consequences since studies have linked hearing loss and cognitive decline, reported NPR.

A new generation of hearing devices, called personal sound amplification products (PSAPs), may help reduce the stigma attached to wearing hearing aids. They’re designed to look like stylish fashion accessories or ear buds, and they’re controlled with smartphone apps.

The real selling point may prove to be that PSAPs are far less expensive than traditional hearing aids.

Weekly Focus – Think About It

“Most of the successful people I've known are the ones who do more listening than talking.”

--Bernard Baruch, American financier and statesman 

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * 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. * All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * 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. 

Last week, investors multi-tasked, pushing both U.S. bond and stock markets higher.

In March, the Federal Reserve raised the Fed funds rates for the second time in three months. Typically, we would expect interest rates to rise and bond prices to fall, but interest rates have been falling and bond prices have been moving higher. Barron’s reported yields on 10-year Treasuries hit their lowest levels since the election last week.

Reuters explained there has been a shift in expectations:

“Bonds prices have been boosted in recent weeks by reduced expectations that the Federal Reserve will raise interest rates two more times this year, following disappointing economic data releases. Still, Fed Vice Chair Stanley Fischer said on Friday that two more U.S. rate increases this year remain an appropriate plan for the Federal Reserve despite some weak recent economic data.”

Geopolitical anxiety continued to play a role in market performance, too, causing investors to flee to safe havens, which contributed to bond market strength.

Geopolitics didn’t cause U.S. stock markets to swoon, though. Barron’s reported:

“Stocks’ on-again, off-again rally was on again last week, and it took the Standard & Poor’s 500 index to within sniffing distance of its March 1 record. Climbing in the face of geopolitical anxiety from Paris to Pyongyang is bullish, as is preserving the upward slope of the index’s 200-day average. But there are signs of wavering conviction…”

That wavering conviction is found in investors’ preference for a small group of tech stocks, as well as more defensive sectors of the market. Through mid-April, just 10 stocks accounted for one-half of the S&P 500’s gain during 2017.

A possible motto for 2017: Expect the unexpected.

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.

mobile technology: the next generation. Faster and more efficient mobile phones are on the horizon. That’s right, 5G is almost here, according to Network World.

If you were never quite sure what distinguished 1G from 2G, or 3G from 4G, much less 4G from 5G, the answer depends on whom you ask (or in this case, what you read). PC Magazine explained the technology:

“1G was analog cellular. 2G technologies, such as CDMA, GSM, and TDMA, were the first generation of digital cellular technologies. 3G technologies, such as EVDO, HSPA, and UMTS, brought speeds from 200kbps to a few megabits per second. 4G technologies, such as WiMAX and LTE, were the next incompatible leap forward, and they are now scaling up to hundreds of megabits and even gigabit-level speeds.”

The Economist, on the other hand, explained the benefits to users: speed of communication. 5G is different from earlier generations of wireless broadband because it can:

“…send and receive signals almost instantaneously. The “latency” (i.e., the lag between initiating an action and getting a response) that has hobbled mobile phones will be a thing of the past. When 3G phones were the bee's knees, the time taken for two wireless devices to communicate with one another was around 500 milliseconds. That half-second lag could make conversation frustrating. A decade later, 4G had cut the latency to 60 milliseconds or so – not bad, but still an age when waiting for crucial, time-sensitive data, especially from the cloud.”

5G mobile networks may be up and running by the time the South Korean Winter Olympics roll around in 2018, according to The Economist.

Weekly Focus – Think About It

“Try putting your iPhones down every once in a while, and look at people’s faces.”

--Amy Poehler, Comedian

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * 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. * All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * 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. 

And the survey said...

In late 2016, Natixis Global surveyed 500 institutional decision makers representing corporate pension plans, public pension plans, sovereign wealth funds, insurance companies, foundations, and endowments. Survey participants said market volatility, geopolitics, and interest rates were their top risk concerns for 2017.

So far, U.S. stock markets haven’t proven to be very volatile, but geopolitics caused some disruption last week. Barron’s reported:

“Stocks fell 1 percent last week in quiet trading, with many market participants out for religious observances. Worries about the war in Syria, North Korean saber-rattling, and the coming French elections had investors reining in riskier positions and heading for safe havens.

Real estate, utilities, and consumer-staples stocks were the only sectors that rose last week. Financials – and banks in particular – fell, despite strong earnings reports from the industry’s big kahunas.”

It was a tough week for stocks, but investors’ flight to safety caused Treasury bonds to rally. Reuters reported the interest rate on 10-year Treasury notes fell 14 basis points. That’s the biggest weekly decline since January 2016. (There is an inverse relationship between bond interest rates and bond prices. When interest rates fall, bond prices rise, and vice-versa.)

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.

why do shoelaces come untied? Engineers have solved many knotty problems, but it wasn’t until recently they unraveled the mystery of shoelaces and why they come undone, reported The Economist.

If you don’t wear shoes that lace or spend time with young child who wear lace-ups, you may not have realized how vexing shoelaces can be. Traditional shoelace bows are comprised of a reef knot and a slipknot – a combination that has come undone throughout history. People have explored alternative knots. In fact, there is an entire website devoted to shoelace knots. It details regular, secure, and special purpose options.

As it turns out, the problem with shoelaces is walking. A group of engineers at the University of California, Berkeley worked out the mechanics of shoelace-bow destruction using treadmills, cameras, and tiny accelerometers. The Economist reported:

“The first thing which happens during walking is that the reef itself is loosened by the inertial forces of the lace ends pulling on it. This occurs as a walker’s foot moves first forward and then backward as it hits the ground during a stride. Immediately after that, the shock of impact distorts the reef still further. The combination of pull and distortion loosens the reef’s grip on the lace, permitting it to slip…Probably, nothing can be done about this differential elongation. But it might be possible to use the insights [researchers] have provided to create laces that restrict the distortion of the reef at a bow’s center and, thus, slow the whole process down.”

Could this research win an Ig Nobel in 2017? It’s possible.

 You may recall from previous commentaries, the ‘Igs’ celebrate improbable research and “…honor achievements that first make people laugh, and then make them think. The prizes are intended to celebrate the unusual, honor the imaginative – and spur people's interest in science, medicine, and technology.”

The 27th First Annual Ig Nobel Prize ceremony will take place September 14, 2017.

Weekly Focus – Think About It

“I put a dollar in one of those change machines. Nothing changed.”

--George Carlin, Comedian

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. * Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * 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. * All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * 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.