If your investments are under pressure, we can help!
Market & Economic Brief
November 19, 2008
After attempting a rally earlier in the month, U.S. stocks broke recent support levels and established fresh lows. Commodities and World REITs have also found new lows. Many international stock markets are still maintaining previous support levels. Intermediate term U.S. treasuries continue to rally in a flight to quality. The near term bias has again turned negative for stocks.
The weekly leading and monthly coincident indexes we follow continue to weaken, suggesting more trouble ahead for the U.S. economy. Many European countries continue to report deteriorating economic conditions as well. China reported a dip in October retail sales but consumer spending has held up better than many other parts of their economy.
Producer costs fell a record 2.8% in October, led by a huge decline in energy prices. Future inflation indicators we track also continue to decline.
The Nat’l Association of Home Builders fell to its lowest level since 1985 in November. Home prices declined in 4 out of 5 cities during Q3. The FDIC has proposed using $24 bil. of the TARP funds to help stem foreclosures. The leading home price index we track rose slightly for August (the latest data available). Additional increases may signal a bottom in housing prices.
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Concentrated Stock Strategies
You have worked hard to build your wealth and find yourself with the benefits of stock ownership as an executive or director in a publicly traded company but there are challenges to diversifing your position. Aside from the unintended emotional characteristics tied directly to the company and the volatile nature of stocks, company and regulatory rules may restrict your ability to transact in public markets. Possible liquidity restrictions include: Lock-out Period, Black-out Dates, Rule 144, and other considerations.
Depending on your circumstances, the SEC has adopted a rule that provides limited safe harbor to individuals that closely follow it. Even better, the rule is relatively easy to understand, establish, and administer offering a new tool for insiders to create liquidity from stock and option holdings.
For those individuals interested in exploring the benefits of diversifying their personal wealth tied to concentrated stock or option holdings, Dightman Capital can help you explore possible solutions. The principal Investment Officer at Dightman Capital has advised and implemented diversification strategies for Section 16 Officers, S-3 Registrations, Initial Public Offerings, and other concentrated stock and option holders. Potentially even more important, Dightman Capital avoids direct association with capital market underwriters or research analyst often found with Wall Street firms and banks.
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