September 16, 2014

TDG News: The Dowling Group is Moving Offices

After 32 years, we are moving our offices back to Greenwich. We recently purchased the new offices in Riverside, CT and are finishing the touch-ups to the space. We are excited to get into our new home and look forward to welcoming you all to the new space. The new address is 1171 East Putnam Avenue in Riverside, CT. We are about 500 feet south of the Exit 5 intersection with underground parking after you turn onto Neil Lane from East Putnam Avenue (a/k/a Post Road or Route 1).

Effective Monday, September 22nd we will officially be in our new space. Our phone numbers and emails will remain the same. We hope you will come visit us in the new space soon!

U.S. Market Direction and U.K.'s Scottish Independence Referendum

If you're familiar with fairy tales, you've probably encountered a story or two that involves the granting of wishes. Usually, these are cautionary tales. Well, there was some wishing going on around the globe last week and, if the wishes come true, the outcomes may be less beneficial than anticipated.

In the United States, some folks wish Chairwoman Janet Yellen and her peers at the Federal Reserve would set a timetable for rate hikes. Barron's offered the opinion that abandoning a data-driven process in favor of a calendar-driven one would be a mistake. Recent improvements including a slight spike in consumer confidence, somewhat stronger consumer spending, and a generally improving job market remain mired in residue of the Great Recession. For instance:

"Housing remains in the doldrums as potential buyers cite insufficient savings, excess debt, poor credit scores, and, yes, their incomes as stumbling blocks on the road to home ownership. Higher rates won't fix any of those problems, and even setting a schedule for rate hikes could create head winds if it causes loans to become harder to get in anticipation of the change."

Across the pond, the United Kingdom of Great Britain and Northern Ireland (U.K.) may cover a lot less territory if Scotland wins independence in next week's referendum. Until recently, few thought the measure had enough support to pass, but the latest polls say that it may happen. While independence may seem like a reasonable objective, there are economic and other challenges attached that could profoundly affect the new country. These include:

• What currency will the Scots adopt? (U.K. leaders have said Scotland cannot keep the Pound.)
• How will the U.K.'s national debt be divided? (By population? By gross domestic product?)
• How will markets respond to Scottish independence? (Will Scotland establish its own stock market? Will companies relocate to England?)
• How will the remainder of the United Kingdom be affected?

There is an adage that may prove appropriate here: Be careful what you wish for because you just might get it.

Data as of 9/12/14	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 (Domestic Stocks)	-1.1%	7.4%	18.0%	19.5%	13.6%	5.8%
10-year Treasury Note (Yield Only)	2.6	NA	2.9	1.9	3.4	4.2
Gold (per ounce)	-2.7	2.5	-7.3	-12.4	4.3	11.9
Bloomberg Commodity Index	-2.8	-3.5	-6.6	-8.8	-0.5	-1.7
DJ Equity All REIT Total Return Index	-5.0	15.3	16.1	14.9	16.6	8.8

Beware unpaid internships! For decades, internships have offered opportunities to learn new skills and find gainful employment. However, a rise in of lawsuits involving unpaid interns and the companies where they worked has focused new attention on the subject. In an article on the topic, The Economist offered some information worth pondering:

"Banks and accountancy firms now hire more than half of their recruits through their internship programs; careers in politics, medicine, the media, and many other fields nearly always begin with an internship. Two-thirds of American students have at least one internship under their belts before they leave college. But they are often badly compensated: nearly half the internships in America are completely unpaid. How do unpaid internships exist in countries that have minimum-wage laws?"

It's an interesting question and one that's answered in Fact Sheet #71 from the U.S. Department of Labor. The sheet sets forth six criteria that must be met for interns to work without pay. In broad terms, unpaid internships:

1. Must be similar to training provided in an educational environment
2. Must benefit the intern
3. Must not displace regular employees
4. Must not provide immediate advantage to the employer
5. Do not necessarily end in employment
6. Are clearly understood to be unpaid by both employer and intern

So, which internships, paid or unpaid, are most likely to help someone land a job? A recent study from LinkedIn examined the availability of internships by field as well as the likelihood of an internship leading to a full-time position. The best bets for prospective interns were accounting, computer networking, semiconductors, aviation and aerospace, investment banking, design, and consumer goods.

Weekly Focus - Think About It

"Individual commitment to a group effort - that is what makes a team work, a company work, a society work, a civilization work."

—Vince Lombardi, Coach of the Green Bay Packers (1959-1967)

Best regards,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

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