One of the biggest concerns for investors is inflation and the recent rise in oil is increasing these inflationary fears. Last week oil broke the $100/barrel level for the first time since September 2008. Previously, when oil stayed over the $100/barrel mark inflation was almost triple today's inflation rate. If the Middle East conflicts are not resolved soon we may see higher inflation levels ahead.
In the US, the headline numbers on employment were positive. The unemployment rate broke a streak of 21 consecutive months of being 9% or higher. However, digging into the numbers we find some gremlins. The labor force remains discouraged with only 64% of Americans actively working or seeking a job. This is the worst reading since 1984.
While there are concerns, there is some good news. We have found that GDP has recovered to its pre-recession levels. Yet, we employ 7 million fewer workers. This suggests companies have made impressive productivity gains. Of course, productivity gains are the closest thing to a free lunch in the real world and this helps fight off some of the inflation woes we might see. Given the overall tensions in the Middle East and elsewhere it would not be unexpected for investors to seek the relative safety of the US Treasury market. At the same time, US equity markets have been holding up well in spite of these crosscurrents.
We believe it best to adopt a moderate approach to risk and equity investing today, while keeping a close eye on opportunities in the near future.
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Martone Capital Management, Inc.
William A. Martone - President - CLU, ChFC
Michael C. Martone - Registered Principal
50 Main Street - Suite #1000 White Plains, NY 10606
Telephone: (914) 682 - 2151 Fax: (914) 682 - 2166
Toll Free: (877) 682 - 2151
William Martone is President and Senior Portfolio Manager of Martone Capital Management, Inc., which was founded in 1994. Bill has 38 years of experience in the financial services industry and manages portfolios for both individual investors and pension funds using multiple investment strategies. Bill is a Chartered Financial Consultant, Chartered Life Underwriter, and New York State Registered Investment Advisor. He is frequently quoted in the Westchester Journal Business News as well as other publications. Martone Capital Management was featured on CNNfn.
*The information contained herein is obtained from sources believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. All expressions of opinions are subject to change without notice. Martone Capital Management, Inc. does not believe this information alone is reasonably sufficient upon which to base an investment decision.