It’s that time of year when many begin to speculate about where the S&P 500 will be at year’s end.  We start this week with an article that summarizes various Wall Street strategists’ predictions. The wide range of possible outcomes illustrates the difficulty in predicting the markets.  Next, we have an interesting article about how some areas of Europe are beginning to barter instead of using the euro as a currency.  Afterwards, we comment on some issues Ben Bernanke will have to consider when he makes a decision about a possible third quantitative easing program.  Bernanke speaks this Friday at an Economic Forum in Jackson Hole, Wyoming that will be watched closely by investors. We wrap up with an article about the Permanent Portfolio, a mutual fund that we use in our model allocations.

Wall Street Strategist Predictions For Remainder Of The Year – This article in Advisor Perspectives shows an updated snapshot of where various Wall Street strategists think the S&P 500 will end the year.   Of the 12 firms shown, the highest prediction is 1,490 for year-end and the lowest is 1,167.  That is quite a range. http://advisorperspectives.com/commentaries/bespoke_82312.php

Parallel Economy Without Euro Emerges In Spain – With little cash to spare, many parts of Spain are forming an economy that does business without the euro, relying instead on social money or an alternative currency system.  Similar economies are surfacing in Greece and Portugal.  These systems take communities back to a time when goods and services were bartered, before things such as interest rates, market speculation, and derivatives complicated the financial world. http://www.washingtonpost.com/business/economy/in-spain-financial-crisis-feeds-expansion-of-a-parallel-euro-free-economy/2012/08/27/53ed3552-e00f-11e1-a19c-fcfa365396c8_story.html

What is Bernanke’s Next Move? – Ben Bernanke speaks this Friday at the Economic Summit in Jackson Hole, Wyoming.  While the market waits to see if he will announce a third quantitative easing program, Lance Roberts highlights some of the issues Bernanke must be considering. He also points out that consumer confidence indexes are diverging from stock market prices.  This is potentially negative for the markets. http://advisorperspectives.com/dshort/guest/Lance-Roberts-120828-QE3-Mechanism-Is-Broken.php

Permanent Portfolio Strategy – Permanent Portfolio (PRPFX) is a mutual fund that was founded in 1982.  We are using it in our model allocations in combination with other world allocation funds with different strategies.  This article by Adam Butler and Mike Philbrick analyzes this fund and how it might fit into a current investment strategy.  Of course, prior performance is no guarantee of future performance. http://advisorperspectives.com/commentaries/dshort_82812.php

We hope you enjoy reading these articles along with us and that you find them informative.  Please forward this to your friends and family.

John R. Day and Bill W. Ennis