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Jim: Hi everyone, today is Wednesday, July 6^th, 2016 and this is our weekly, midweek, market update call, brought to you each Wednesday to bring you current with observations, assessments and decisions we are making. Today’s comments include some observations in the financial news as well as a review of our indicators that we work with to provide guidance for our portfolios. But, before I do that, here is Bernie Murff with some team news and other remarks, Bernie?

Bernie: Thank you Jim.

I was speaking to a colleague recently at a meeting in Chicago. While we were getting acquainted we were talking about our kids – he has 3 small children, all under the age of 10. I told him that my oldest would be attending Radford University in the fall. He said “Wow, you look too young to have someone going to college.” I said thank you, of course. He then told me that is where he went to school. “What a small world.” He then proceeded to say – “What does it cost about $10,000 a year to go there now?”I said no, higher…he then guessed $12,000, then $15,000 – I finally said try $20,000 for in state and it is one of the cheaper schools to attend in Virginia.

I’m not sure what your perception is of how much college costs today, but Are You Prepared for the Rising Cost to Attend College? According to the College Board’s Annual Trends in College Pricing Report, for the 2016/2017 academic year, the average cost of attendance at a 4 year public college for an instate student will be $25,264 and Private will be $50,222. For decades, college costs have outpaced annual inflation – increases range from 3-6%. BTW, I just got a notice that my son’s tuition is only going up 2.5% and we haven’t even dropped him off yet. It is estimated that in 10 years the cost will be almost $39,192 for a public college and $77,911 for private per year.

What are you doing to prepare? This is another area of our focus for Wealth Management – we can run some calculators that will help us evaluate what you need to start saving now so that you are better prepared for the future.

Next week I’ll discuss Funding Vehicles Available. If you know of anyone that has children please feel free to have them listen to next week’s call.

I’ll now turn the call over to Jim to discuss the markets and what we are seeing.

Jim: Thank you Bernie.

As the news cycle turns to Hillary Clinton and her interview with the FBI (the Wall Street Journal glibly added Hillary Clinton to the FBI’s Least Wanted List.)The media has pulled away from the Brexit issues in Europe, but those issues have not gone away as you might suspect.

Compared to most other currencies, the British pound has hit new lows and at least two asset managers in Great Britain have blocked investors from withdrawing funds.That happened here in the US on that fateful Friday after the vote turned out that Great Britain had voted to exit the European Union, except it happened with one of the largest new Robo-advisors, an organization named Betterment.Most likely, that decision could be chalked up to professional lack of maturity.

As some of you know, Raymond James has a historic reference point with blocking [or not blocking] investors from making decisions with their own money.Raymond James has now 114 quarters of profitable earnings.That string of winning quarters would be much longer if it wasn’t for the fact that on Monday October 19, 1987, Tom James instructed our firm to open up on that day to allow liquidity for our investors.Because he did so, Raymond James experienced losses on that day that made that quarter a losing one in a longer string of winning quarters.Our decision to do so speaks for the clear decision to be open, transparent and supportive of investor decisions.

So Great Britain is struggling again, as is Europe.We know this also because our asset class ranking still has international securities in last place, a place it has secured since February of this year.What has jumped ahead and into first place is COMMODITIES, essentially dominated by precious metals.There has been a flight to precious metals and to U.S. treasury securities since the undoing of the European Union thanks to exit steps led by the United Kingdom.This commodity class has dominated the ranking leadership for the past few weeks pushing FIXED INCOME into second place, U.S. DOMESTIC EQUITIES into third place, CASH respectfully moving to 4^th place, just ahead of CURRENCIES, then followed by INTERNATIONAL EQUITIES.

I can tell you that picking out of commodity choices has some difficulty, we’ve done well in one of our models with two precious metal picks but it goes against the grain of most financial professionals to dominate a portfolio with commodities, fortunately we have some investments hitting new highs carrying our larger portfolios, those are in the fixed income area and US domestic equities, in particular utilities.

That is our asset class line-up, our large group indicators are showing a steady hand, not declining more and not reversing back up.This clearly has begun a stock picking market for those reasons.

Interest rates?Well, we will learn more this afternoon what the FED was thinking three weeks ago, just before the Brexit calamity.The meeting notes will be made public this afternoon and their inclination to raise rates was thwarted by the Brexit vote.Because of that, we will see what they were thinking before they changed their minds.

The bellwether 10-year Treasury has slid just since last Wednesday from, 1.47% to current at 1.37%.The bellwether treasury from back in the day, the 30 year Treasury bond has fallen from 2.28% to 2.14%.The less significant five year treasury has gone from 1.02% to less than 1%, currently quoted at .95%.All this has of course helped push the utility market into new high levels.Certainly not helping us find safe guaranteed higher yielding investments.

That’s it for today, if there are any questions, comments or observations, now is a good time to hear your voice.

Opinions expressed are not necessarily those of Raymond James & Associates. The author's opinions are subject to change without notice. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.

Diversification and strategic asset allocation do not ensure a profit or protect against a loss.

There are special risks associated with investing in precious metals, including but not limited to the following: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.

Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security.

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