Time flies when you're not updating your blog!

Well this is embarrassing, but in hindsight not all that unexpected... It's been almost a full year since my last blog post (not that anyone's reading). Oh course, the reason I created this blog in the first place was not for readership per se, it was for myself (As an aside, there are precious few media sources that aren't beholden to some self-serving interest, luckily most blogs seem to resist this M.O). I am determined to keep this blog going, if only to serve as an entertaining retrospect upon my mid-twenties, woefully mis-informed self some years down the road. I'm sure I will get a good laugh out of my entries looking back at age 45.

While I don't want this blog to become a dear diary, some recollection of this past year's events (both personal & market-related) will be useful:
- 69.6%!!!! that's the 1 year total return of the SPY ETF which tracks the S&P 500 index. Pats on the back all around Mr. Market - -Crisis averted! Great for my 401/k which is 60% invested in equities. Note: I started marginally increasing my equity exposure in March 09, but to say I made I smart decision would be a mischaracterization.

- I failed the CFA level III exam- Actually it's more of a relief that there still is justice in the world. I was woefully unprepared for this exam. My writing skills were not where they needed to be (more blog entries??) and I did not even get to all of the questions in the curriculum. This year I am already better prepared with a schedule that I am following and a plan of attack.

- I am beginning to encounter more difficult (dare I say life-altering) decisions as they relate to finances & family. While I personally am on solid ground financially, I am starting to worry about my parents, who are now in retirement, and my sister who is branching out on her own with a new business. I foresee a lot of expenditures for them both, on what is a dwindling asset pool, levered up with debt. I'm not really sure how to approach the problem. Do I slowly fix one thing at a time or do I go "big bang" and try to push my father to consolidate all financial activity at once (he has something like 8 credit cards, 10 brokerage accounts & 4 business loans). Should anything happen to him, my life as I now it would be interrupted for at least 6 months as I would have to sort through the family finances. Not to mention the grief that my family would endure. This is the thing that worries me the most right now.

- Related to the last two issues, I have begun researching topics such as estate planning, life insurance, & personal financial planning all of which have captivated me. I find them very interesting and may want to pursue them as a career in the future, although hedge fund accounting can be very "interesting" at times (think Oct. '08!!).

Now that I have those out of the way, it's time for some thoughts about the current environment (don't mention Greece, don't mention Greece, don't mention Greece). Related to my first musing on the total return of SPY since March 09, all I can say is (and in the voice of an Italian gangster) - - C'moooooooooonnnnnn Man!! I don't buy it one bit.

Consider:
- Housing prices are still falling (I drove down the lake Michigan lakefront today and was alarmed to see so many for sale signs. Are these home-owners sick of living here or are they being forced to sell into a sinking market? Obviously the latter. Of course that many For Sale signs also increases the amount of hidden inventory of homeowners that would like to sell, but don't want to sell in such a bad market. This is not getting better any time soon.

- Consumer spending is tepid. Retail store expansion has been based on a set level of annual growth for the past 20 years; that level of consumption has been permanently impaired. Overcapacity is now built into the system. that have expanded too rapidly are now faced with the double-wammy of decreasing sales and discontinuing operations.

Where are we headed - an uneducated guess.

- Market consolidation, back to 1,000 on the S&P. Stimulus momentum will begin to run out in 2Q10 investors will finally "understand" this was not a typical recession.

- The tax man cometh - (I'm sure I stole that from somewhere) Taxes are on the rise and so is investor uncertainty. Muni bonds will likely generate a lot of interest in the next 6 months as investors anticipate the rise.

Alright. That's all the writing I have in me this Sunday night. Time to kick back with the girlfriend and a bottle of 312 Ale and catch the last 15 minutes of amazing race. Then curl up with the level III curriculum...

Good night,

Mike