Pinnacle Trust Blog

So Far, Correction Normal

Pinnacle Trust — Tue, 22 May 2012 18:46:00 +0000

Just as we predicted, stocks have settled into a correction period after a good first quarter. The decline of -8.7% on the S&P 500 from the early April highs through the end of last week, while unsettling, is quite normal and within our forecasted range of 6%-10%. There have been twelve corrections of –6% or more since the cyclical bear market bottom reached on March 9, 2009, with –7.6% representing the average decline of the 12.

5 Year Price History S&P 500 (May, 2008 – Current)

Global problems have turned supply/demand issues for stocks slightly negative, but deeply pessimistic sentiment has offset for the time being. We’re watching further developments very closely, but at this point remain with our first-of-the-year forecast of a mild correction and are currently neutral towards stocks. – Stacey Wall

Parrish Completes 10th Half Marathon

Pinnacle Trust — Tue, 22 May 2012 16:53:00 +0000

Jana Parrish, Pinnacle Trust Executive Vice-President, recently completed her 10th half marathon. The Flora Half Marathon raised money for Sunnybrook Children’s Home.

Located in Ridgeland, Mississippi, Sunnybrook is a Christian ministry-based, professional childcare organization helping children who have had challenging beginnings.

Wall Elected to Board

Pinnacle Trust — Tue, 22 May 2012 16:30:00 +0000

Stacey Wall, Pinnacle Trust President & CEO, was recently elected to the Advisory Board of the Edith and Marina Alexander Memorial Foundation Trust Fund. The fund, founded in 1992, works with the Mississippi Council of the Blind to supplement transportation costs for blind and visually impaired people in the Jackson, Misssissippi, metro area.

Wall (far right) is pictured here with Board members (l to r) Peggy Maddox, Ken Maddox, Jimmy Hood and Liles Williams.

Is Facebook a “Buy”?

Pinnacle Trust — Tue, 22 May 2012 15:24:00 +0000

The retail investment world seems consumed with the initial public offering of Facebook stock, the second largest in history. I have had more inquiries about this stock than any since the infamous days of WorldCom, and suppose that’s understandable. According to their registration statement, Facebook boasts 901 million active users, 3.2 billion “likes” and “comments” per day, 300 million photo uploads per day, and 125 billion friendships. Even this blog will be posted on our own Pinnacle Trust Facebook page.

Yet, all along we have discouraged investors from taking an aggressive stance in just one stock, particularly one surrounded by so much hype. Now, issues have surfaced regarding Morgan Stanley’s handling of the IPO as lead underwriter when Reuters reported that the bank’s consumer Internet analyst trimmed his outlook for the social-networking firm’s revenues just days before the deal went live.

If history is any guide, IPOs of high-profile technology stocks tend to have most of their short-term upside already priced into the stock by the close of the first day of trading. On average, these stocks were down six months later, as shown in the table below.

PERFORMANCE OF SELECT HIGH-PROFILE TECH IPOs

Company	IPO Date	IPO Size (millions)	IPO Price	% Gain after 6 months
America Online	03/19/92	61.8	$11.50	+10.17
Netscape	08/09/95	140.0	$28.00	+132.62
Yahoo	04/12/96	33.8	$13.00	-37.88
Google	08/19/04	1,670.0	$85.0	+97.24
Baidu	08/05/05	124.3	$27.00	-62.76
Renren	05/04/11	743.3	$14.00	-65.80
Median				-13.86

Source: Ned Davis Research

We strongly believe that proper diversification, tactical adjustments and an emphasis on risk management is a much more predictable formula for success than “betting the ranch” on a hyped-up IPO. –Stacey Wall

Petersen Joins Pinnacle Trust

Pinnacle Trust — Fri, 18 May 2012 20:37:00 +0000

Jim Petersen has joined Pinnacle Trust as a Financial Advisor. A graduate of the University of Mississippi, he received a B.A. in Recreation Management with a Minor in Tourism in 2004.

Jim began his professional career with the Ridgeland Tourism Commission as a marketing director. After six years, he moved to Morgan Keegan as a financial advisor. Jim completed his Series 7, Series 66 and insurance requirements in 2010 .

He is active with the Make-A-Wish foundation of Mississippi and Ridgeland & Madison County Chambers of Commerce. Jim graduated from high school in Collierville, Tennessee.

Jeremy Nelson, Pinnacle Trust Chief Investment Officer, said, “We’re thrilled to have Jim join our staff. His professionalism and work ethic will serve our clients well.”

Pinnacle Trust Welcomes Burgess

Pinnacle Trust — Thu, 17 May 2012 13:29:00 +0000

Liz Burgess has joined Pinnacle Trust as a Trust Operations Specialist. Liz received her B.S.B.A. in 1991 and her M.B.A. in 1997 from Mississippi College. Prior to joining Pinnacle Trust, she worked for fourteen years with one of the nation’s larger accounting and business advisory firms and six years with a local retirement plan consulting and administrative firm with responsibilities for employee benefit consulting, retirement plan administration, trust accounting and legal compliance.

Liz earned her PA1, DC1 and Daily Valuation Certifications from the
American Society of Pension Professionals and Actuaries based in
Arlington, VA. She is a frequent volunteer with the Madison Avenue Elementary School PTO where she serves on various committees including
the Executive Board. Liz is highly active in her church and community
and enjoys spending her free time with her husband and her twin children.

She has over twenty years of experience in the retirement plan and
accounting industry.

Pinnacle Trust Executive Vice-President, Jana Parrish, said, “We are very fortunate to have someone with Liz’s expertise and experience join the company. As we have grown, it’s become even more important that we hire the right people, and we’re confident that we have done so with her.”

Weekly Market Update–Jobs Number Disappoints

ptmarketupdate — Thu, 10 May 2012 21:59:43 +0000

A disappointing jobs report brought on questions about the velocity of the economic recovery in the United States. 115,000 new jobs were well below consensus estimates. One month does not make a trend, and the last few months have come in better than expected. Investors should pay attention to the labor markets over the next months, as uncertainty about future tax rates and deficits could slow down hiring and the economic recovery. Unfortunately, this recovery has been substandard and we are closer to a recession than many would think.

In Europe, it appears as though Greece will not hit the required austerity targets needed to receive its full bail out from the European Union (EU). Alexis Tsipras, head of Greece’s Radical Left Coalition, has declared that the Greek bailout agreement is “null and void.” In London, odds makers are no longer taking bets on whether Greece will stay in the Euro zone due to incredible volumes.

French elections over the weekend saw Socialist leader, Francois Hollande defeat President Sarkozy. France has been Germany’s biggest ally in keeping the EU together by funding bailouts to indebted member nations in exchange for austerity. Hollande is pushing back on the need for austerity in Europe and promotes a growth oriented policy. Hollande recognizes that Europe cannot grow simply by taking on more debt but believes that austerity will take down the region.

In Europe and the US, there is a major aversion to austerity. Some renowned economists are now speaking out against spending cuts, stating they will derail the economic recovery. Unfortunately, without structural reform, we are only kicking the can down the road and sacrificing tomorrow for today.

Jeremy Nelson, Chief Investment Officer

May Joins Pinnacle Trust

Pinnacle Trust — Thu, 10 May 2012 20:28:00 +0000

Gretta B. May has joined Pinnacle Trust as a Client Services Manager. Gretta received a B.A. in Business Administration with a concentration in Marketing from Piedmont College in Demorest, Georgia.

She is a native of Vicksburg, Mississippi, where she resided until 1998 before relocating to Georgia. Gretta returned to the Magnolia State in 2010 and has worked in sales and management positions in the Metro Jackson area.

Upon graduation from Piedmont College, she worked for the Georgia Chamber of Commerce’s Leadership Georgia Program as an assistant to the Director. Subsequently, she obtained certificates of completion in the fields of civil and domestic mediation from the University of Georgia’s Fanning Institute and completed her practicum with Henning Mediation and Arbitration Service in Alpharetta, Georgia, as well as the Ninth Judicial Administrative District Office of Dispute Resolution in Gainesville, Georgia.

Gretta is a Lifetime member of the Junior Auxiliary of Vicksburg, having served as Secretary to the Board. She has also served as Chairman of the C.E. Mendez, “Too Good for Drugs Program,” and as an elementary school mentor. Gretta was a member of the Fall Committee during the development of JAV’s award-winning cookbook, Ambrosia. An active member of her native community, she served as Food Chairman for the American Heart Association Benefit, Registration Chairman & Food Co-Chairman for the Miss Mississippi Pageant and Secretary for the Warren County Republican Executive Committee. Gretta was an Official Court Reporter for the Ninth Judicial District of Mississippi for over 10 years and a free-lance court reporter for over 12 years. She has served in various supporting roles to the Mississippi Court Reporter’s Association and the Mississippi Judicial College Court Reporter’s Committees.

Beth McGaugh, Pinnacle Trust CFO, said, “We’re excited about having Gretta on board. She will be exceptional in helping us achieve a superior client experience, as well as assisting us with her marketing and planning talents.”

Consumer vs. Government Debt

Pinnacle Trust — Thu, 10 May 2012 14:10:00 +0000

As American consumers have deleveraged, household debt as a percentage of GDP has fallen to its lowest level in six years (blue line, chart below). However, as we have previously discussed, total government debt has risen to levels not seen since the early 50s (blue line, second chart).

Charts courtesy Ned Davis Research

Debt reduction by consumers is being completely offset by the expansion of government debt. Little progress will be made until after the November elections, but eventually, this has to change.

As for stocks, rising optimism and complacency led to a pullback of about –3.5% since early April highs. That optimism has now corrected and investor sentiment is neutral. We remain (mild) cyclical bulls within a secular bear. – Stacey Wall

Pinnacle Trust Welcomes New Family Member

Pinnacle Trust — Mon, 07 May 2012 18:25:31 +0000

Pinnacle Trust welcomed its newest family member yesterday. Gavin Miles Nelson, son of Jeremy Nelson, Chief Investment Officer, and his wife, Katie, was born at 6:32 pm. Gavin weighs 7 lbs, 15 ounces, and is 21 inches long. Congrats to Jeremy and Katie!