Compass Financial Group

Market Insight First Quarter 2012

 Dear Valued Investor:

Stocks enjoyed very strong gains during the first quarter. In fact, based on the S&P 500 measure of the broad market, it was the best quarter for stocks since the third quarter 2009 and the best first quarter since 1998. The Index gained 12.6% during the quarter including dividends, to reach the 1408 level at the close on March 30, 2012. It was a quarter of milestones for the broad averages, with the S&P 500 breaking through to new post-financial crisis highs, the Dow eclipsing the 13,000 level for the first time since May 2008, and the Nasdaq reaching 3000 for the first time in over a decade. The quarter’s gains leave the S&P 500 11% short of all-time highs set in October 2007 and 30% above 2011 lows set six months ago in October.

 The solid returns for the broad market during the first quarter were driven primarily by improving U.S. economic data and investors’ increasing comfort with Europe’s challenges. The U.S. data mostly exceeded expectations, most notably consumer and jobs data. Meanwhile, European policy makers made significant progress toward resolving their debt crisis, creating a favorable macroeconomic backdrop for financial markets, and equities and credit in particular.

 Equity investors had much more to celebrate during the quarter than either Commodities or Fixed Income investors, although certain segments of these markets generated attractive returns for investors. The broad commodities and bond markets were each essentially flat in the quarter (as measured by DJ-UBS Commodities Index and Barclays Aggregate Bond Index), although certain economically sensitive commodities and credit got a lift from the market’s increased appetite for risky assets. Although broad measures of the Commodities asset classes market moved little, performance within specific Commodities markets was varied. For the bond market, the marginal gain was good enough for the 13th positive quarterly return out of the past 14 quarters.

As always, please contact us with any questions.

 Best Regards,
Stuart, Jeff, Mark and Lauren

 
WHATS NEW?

Retirement plan contributions have been raised for 2012! To see all the details click on the link on the right side of this page under 'Additional Pages' - 2012 Retirement Plan Limits or click here

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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 me prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Stock investing involves risk including the risk of loss.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values and yields will decline as interest rates rise and bonds are subject to availability and change in price.

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.

Dow Jones Industrial Average (DJIA): The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and non-utility) goods and services. The Dow Jones Industrial Averages are maintained by editors of The Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the market sectors covered by the average. The Dow Jones averages are unique in that they are price weighted; therefore their component weightings are affected only by changes in the stocks’ prices.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The Index is market-value weighted. This means that each company's security affects the Index in proportion to its market value. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. It is not possible to invest directly in an index.

The Dow Jones - UBS Commodity Index is composed of futures contracts on 19 physical commodities. Unlike equities, which entitle the holder to a continuing stake in a corporation, commodity futures contracts specify a delivery date for the underlying physical commodity. In order to avoid delivery and maintain a long futures position, nearby contracts must be sold and contracts that have not yet reached the delivery period must be purchased. This process is known as "rolling" a futures position. The DJ-AIGCI is a "rolling index.” The DJ-AIGCI is composed of commodities traded on U.S. exchanges, with the exception of aluminum, nickel and zinc, which trade on the London Metal Exchange (LME). Trading hours for the U.S. commodity exchanges are between 8:00 am and 3:00 pm ET. A daily settlement price for the index is published at approximately 5:00 pm ET.

Barclays Aggregate Bond Index: is comprised of the Barclays Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million.

The fast price swings in commodities and currencies will result in significant volatility in an investor's holdings.

This research material has been prepared by LPL Financial.

Tracking #1-063480 (Exp.4/13)