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Jim: Hi Everyone.Today is Wednesday, April 6, 2016 and today marks the first full year of weekly teleconference calls to our clients, family and friends around the country.We thank you for your continued support as we put our pencils down every week right smack dab in the middle of the week to bring you up to date on our observations of the market and industry news.Keeping you current with us is vital for everyone.

Before I get into late breaking news and the few topics for today, here is a word or two from Bernie Murff, Bernie what’s going on?

Bernie: Thank you, Jim.

Well I’m finally getting back into the groove after vacation and happy to be here speaking to all of you. First, I want to thank everyone for holding down the fort while I was out and helping wrap up tax time.

I think the team did a great job of answering all of our clients and their CPAs questions around their tax documents. We still have a few more days before April 15^th, but it looks like everything is on track.

Before I highlight Scott Brown’s Recent Economic Data and Outlook, I wanted to mention two events that our team will be hosting in the near future. First, we will be hosting our 5^th annual Picnic and Shredding Event at Lewis Ginter Botanical Gardens in Virginia on Saturday, April 30^th from 11-3 pm. Next, we will be hosting our first Picnic and Documents Shredding Event in the NY/NJ Area @ the IBM Center on Wednesday, May 4^th from 3-7 pm. Please note that we will be sending the invitations our shortly for the NY/NJ event via email. Both of these events are for clients, friends, and family members. So, feel free to invite others to join you in clearing out their old documents that need to be shredded securely.

My comments today are from Scott Brown, Chief Economist for Raymond James. I’ll highlight Employment, Manufacturing, Home Sales and Fed Chair Yellen’s recent comments.

March Employment Report: Payrolls rose by 215,000. The unemployment rate edged up to 5% as the labor force participation rose. The hourly earnings rose by .3%, while the three-month average is up 2.3% year over year.

ISM Manufacturing Index: was stronger than expected in March. New orders strengthened and production picked up.

Pending Home Sales Index: rose 3.5% in February to its highest level in 7 months. Mortgage rates remain low and home prices are rising.

All of this and other economic data is considered when the Fed looks at interest rates and what they might do next. Fed Chair Janet Yellen recently stated that they expect short-term interest rate increases to be gradual due to the Fed’s limited ability to respond to negative shocks. “Given the risks” Yellen said, “I consider it to be appropriate for the FOMC to proceed cautiously in adjusting policy.” Most Fed officials expect two 25 basis point hikes by the end of the year.

I’ll now turn the call over to Jim to focus on what our indicators are telling us and how we are navigating this current market environment.

Jim: Thank you Bernie.Perhaps you are tired of it too, when popular TV News stations constantly interrupt a newscast to bring us “this breaking story” or “breaking news,” only to find out it is an old story or certainly nothing that is new or different.Well, I have the privilege of breaking news this morning that the Department of Labor has ruled for a stronger fiduciary role for financial advisors when dealing with investors and retirement accounts.My objection to this from the beginning has not been the rule changes—in fact, almost every item in the ruling we [as a team] have already been doing for the past 11 years—but has been the fact that it covers retirement accounts only and not non-retirement accounts.The industry has not been looking forward to this ruling, but, so far, the news that broke just a couple of hours ago, does not seem to be unworkable for the industry, investors or financial advisors like ourselves.The full ruling will be on the Department of Labor’s web site by Friday—we’re not quite sure why it should take that long, but let’s wait and see.If there are any remarkable differences in the way in which we will be conducting our business with you our clients, we will let you know in short order.

With the NCAA championships in the rear view mirror, I read something interesting recently about Bob Kurland.Kurland was the 7 foot basketball wonder for Oklahoma A&M and who in 1946 —according to basketball history—conceived and was the first to execute the dunk shot.Not long after that, the professional NBA league allowed dunking in all their games but the NCAA actually banned it until 1976, 30 years later when they realized they had made a mistake.The shot was wildly enjoyed in the professional league and the NCAA realized they had failed to capitalize on the excitement it brought to the game.This is an illustration one of the many successful failures featured in the book Success through Failure by Henry Petroski.

Comparatively, we experience successful failures in our work on regular basis.There is nothing like a good failure to create a great learning experience.And investment choice is not foreign to this concept at all.Currently, a position we have in our Staby Equity account is the New York Times, symbol NYT, this is the second time we have owned this in that model.We first bought it on a technical breakout in August 2012 and owned it through most of 2013 and sold out of it at a profit, utilizing additional investment strategies for extra income along the way.I came back to buying it again in 2014, but I was wrong, it failed to do what I hoped it would and in the past several weeks we have been liquidating the position, we are almost done with the final redemption.Why is this a successful failure?It is because we have limited the loss on this un-favored position.Because we position size, the impact on the account ends up being around 1%.And because it hasn’t worked out, we chose to liquidate the position over several weeks so as to not disturb the liquidity of this media company and damage the exit pricing we were obtaining.Liquidity, of course, is the availability to buying or selling without disturbing the price of the investment.

If that is our un-favored investment at the moment, the spotlight this week on our favored investment is on Texas Instruments, symbol TXN.This had all the feathers lined up in the same direction, the semiconductor sector was favored, Raymond James research had it ranked in its top category and technically in our point and figure work it had reversed and broken out—there was more demand for the stock—on February 17.We bought our position two days later.Then when, almost a month later after the stock had climbed 5%, we sold the right for someone to buy the stock from our accounts to add the equivalent of 5 additional dividend payments to the account Texas Instruments was in.We expect to have these shares purchased from us by next Friday and for less than a 60 day period we will have captured an 8-9% return.Unlike the NYT media stock, which didn’t have adequate call option income to ingest, this trade helps us pick up performance in a shorter period of time.In the sister model account to this Staby Equity model, we created extra income by just selling put options in that model, a strategy that takes more than a sentence or two to explain, so please email me or call in for further details on how we are providing up to 50% more income in our higher paying Staby Equity and Income model.

I touched on Raymond James research a few minutes ago.Investment firm research has been spotty all of my adult years as a financial advisor. Until I got to Raymond James.Raymond James is exceptional.All one has to do is look at the list of Raymond James Strong Buy stocks.So our work tries to pull from this group whenever possible, but only when the point and figure methodology metrics are aligned with Raymond James research.This is when we would not use Raymond James research for investment selection, as we do not use Raymond James research by itself to make our choices.

Bernie, let’s go to the indicators,the asset classes are aligned up and ranked this way:Fixed income, US equities, Cash, Currencies, Commodities and in last place again—International Equities.The 3 large pockets of stocks we follow, the 2100 stocks on the New York Stock Exchange, the 3200 stocks in the Over the Counter market and the 3600-stock hybrid of those two groups are all in bullish position. Interest rates, remarkably lower again—just since we met with you last, last Wednesday, again fueling the opportunities for us in the fixed income market and dividend paying stocks.

That’s all for today, are there any comments or questions, observations or inquiries, I will unmute the lines at this time!

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 is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices rise. Dividends are not guaranteed and will fluctuate.

Point & Figure charting illustrates the movement of a security or index.

Dividends are not guaranteed and must be authorized by the company’s board of directors.

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