Virtus Wealth Hires Jackie Dixon as Service Assistant

Virtus Wealth hires Jackie Dixon as Service Assistant. . .

Jackie Dixon has just joined our team as Service Assistant.  She comes from an Education and Customer Service background.  Jackie graduated from Tarleton State University with a BBA in Marketing and worked for Fidelity Investments, State Farm, and Blue Cross Blue Shield New Mexico in customer service and training.  She took time off from corporate America to raise her children, however, could not sit still so she substitute taught at her children’s school and taught in her Church’s Mother’s Day Out Program.  For Jackie, teaching was like customer service because you are helping someone to understand something new or better!

Jackie has been married to Don for 18 years and they have 3 children: Jade 15, Jennifer 13, and Nolan 6.  Jackie is active in the Byron Nelson Drill Team Booster Club and loves to scrapbook and watch peewee & Dallas Cowboy football. 

To learn more about our team or Virtus Wealth Management in general, visit:  http://www.virtuswealth.com/Our_Team.aspx

***Securites and Advisory Services offered through VSR Financial Services, In, a Registered Investemnt Advisor and member FINRA/SIPC.  Virtus Wealth Management is independent of VSR.

What is the Baltic Dry Index and Why Is It Important for Investors?

What is the Baltic Dry Index and Why is Important for Investors?

 The Baltic Dry Index (BDI) tracks the cost to ship raw materials, including fossil fuels, by sea.  It is a very detailed index that tracks different size cargos as well as many different geographical routes in order to get a good measure of the changes in cost to ship by sea. 

 Since we have become more and more of a global economy, understanding the cost and changes in volume of cargo being shipped by sea is a very good leading indicator.  Too many investors get caught up with news that historically has been lagging indicators, i.e. changes in the trend of the indicator occurs after the stock market changes direction.  One of the most well known, historically speaking, lagging indicators is the unemployment rate.  There is a lot of focus on the unemployment rate in the media and by investment journalist.  I understand it is news and should be reported because we all have loved ones, friends, or people we know who have lost jobs over the last year.  However, in terms of when or if to invest in the market, not much can be determined by watching the unemployment rate.

 But back to the Baltic Dry Index, since we are looking at the very beginning of the manufacturing process, changes to it may give us an indication of what is going on in the global economy.  As you have heard me state many times, we must eliminate the white noise when investing.   The Baltic Dry Index cuts to the core of what is really going on in the global economy.

 Another reason it is important is that a high percentage of shipping trade is done on credit.  This global crisis is more of a credit issue than anything else.  Thus the Baltic Dry Index can give us an indication of credit is improving or not.    Let’s take a look at how the index is performing this year in the following chart:

 Interestingly, the index peaked in June has been steadily declining since, dropping over 40% from its 2009 peak.  The S&P 500 has risen over 10% since the BDI peaked.  In many cases this would be called a market divergence and be a real concern for the future direction of equities.  However, as it normally works, the devil is in the details.  As you can see the index bottomed in December of 2008 while the S&P 500 bottomed in March of 2009.    The index was a leading indicator because it started rising before the stock markets did.  The uptrend happens to be the same time as many of the global stimulus dollars were being spent.  Specifically China was spending billions on raw materials at the time in order to build a stockpile.  So the peak in 2009 is probably an anomaly due to China.  The question is where the index should be today. 

 The number I am watching is 2000.  I would like to see the trend to start leveling out and changing directions if we are really going to see economic growth in early 2010.  Since large cargo shipping has long lead times and is at the early stage of the production process, it should move upwards prior to any improvements seen at the back end of the sales cycle (e.g. earnings).

 Let’s continue to eliminate the white noise and focus on leading indicators!

 Don’t forget to listen to my radio show, airing every Saturday on CNN 1190 radio (am) from 4:00 to 5:00 pm.  We will be pre-empted by the Texas Tech football games the next two weekends, but will be back on air October 17^th.  We also have previous shows taped on the website. 

 Brian Tillotson

Wealth Manager

 Virtus Wealth Management

2435 E. Southlake Blvd

Suite 120

Southlake, TX 76092

817-717-3812

866-407-4320

Fax: 817-416-6585

www.virtuswealth.com

Securities and Advisory Services offered through VSR Financial Services, Inc. Member FINRA / SIPC.  Past performance cannot guarantee future results. 

The attached commentary contains opinions and analysis that are provided by the author for informational purposes only and should not be used as the primary basis for an investment decision.  You should consult with Brian should you have any questions if this strategy is suitable for you.  The technical analysis cannot guarantee a profit or protect against a loss.

 Please feel free to forward this to any friends you believe will benefit from this information.