Balancing Act

Posted May 24, 2013 by admin. tags:
Holding up a huge rock


Written by Nate White, Chief Investment Officer of Paragon Wealth Management

The first warning shot across the bow of the markets from
the Fed came on Wednesday.  Fed Chair Bernanke appeared before Congress on
Wednesday and finally signaled that, depending on the data of course, the Fed
could start slowing the rate of QE.  The markets immediately reversed and
on Thursday the Japanese market, which has been on an absolute tear, fell
7%.  Whether or not this will lead to the long-awaited correction remains
to be seen.  The markets have been on a tear due in a large part to the
fear investors have of missing out.  That hasn’t gone away yet, but at the
same time the pace of the advance was becoming unsustainable (Japan has been an
extreme example) and a pause would do some good. Fundamentally the factors that
have been pushing the market up remain in place and so any pullback could
remain shallow.

Economic data continues to show modest growth with hopes of
increasing slowly as the year progresses.  The economy is getting to the end
of the deleveraging process and with the Fed’s tip of the hat, we have now
officially entered the mode that if the economic figures get stronger the Fed
will conversely reign in QE.  Overall, that is a good thing and long
overdue.  As I have said for some time it is unfortunate that just as the
economy starts to hit “escape velocity” the Fed will have to actually or
potentially pull back on QE.  That keeps economic growth in the slow
growth mode.  That’s the price of QE at the least and it’s a shame in my
opinion.  We would be better off if years ago we took more of the pain
upfront rather than shackling ourselves with the pains of unraveling QE now.

This was mostly a psychological move, a sort of trial
balloon, by the Fed to see how markets would react.  They will still be
providing massive amounts of QE and will be very slow in pulling back.
They will still risk inflation over letting the economy slip.  In a
practical sense their actions are nothing more than pushing on a string.
Markets are all about future expectations though and the beginning of the end
of QE could be upon us.  Going forward, the Fed will now have to play a
skilled balancing act in managing expectations about unwinding it massive
balance sheet.  No easy task to say the least.

Equities still remain the place to be but the easy money has
been made and it could now be a choppier ride going forward.

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

 

Best Of State Gala

Posted May 20, 2013 by admin. tags:
BOS

On May 11, 2013, Paragon Wealth Management was awarded for the 2013 Best of State Award for Investment Advisory Services. The following pictures are from the Best of State Gala.

Above: David Kyle Herring, KaNeil Tucker and Dave Young

Above: Shannon Golladay and Dave Young

Above: Kim & Nate White

Above: Dave & Cathy Young

Above: Dave Young, President and Founder of Paragon Wealth Management received the Best of State Award.

Above: from left to right: Nate & Kim White, Cathy & Dave Young, Shannon Golladay, KaNeil Tucker (soon-to-be Menlove) & Sheldon Menlove, David Kyle & Michelle Herring

No Longer High-Yield But Definitely Still Junk

Posted May 10, 2013 by admin. tags:
Crazy Stock Market Numbers


Written by Nathan White, Chief Investment Officer of Paragon Wealth Management

Simply amazing.  Junk bond indexes and funds should now
drop the “High Yield” description that they use in their names.  With
these bonds now yielding around 5% we have sold out of most of our positions in
this area.  At this level the returns are just not worth the risk.
That doesn’t mean junk bonds will blow up any time soon but we would rather
sell high and take what the market is giving us at this time.  Junk yields
at 5% are a direct consequence of the Fed’s Zero Interest Rate Policy as
investors fight for anything with yield.  It wasn’t too long ago when you
could get 5% on a money market!

To view the entire article please visit: barrons.com

Here is an exerpt from the article:

The 5% yield barrier has proved no match for this Federal
Reserve-fueled junk-bond market, which last night reached yet another all-time record-low average yield-to-worst of 4.97%,
according to the Barclays US
High Yield Index. It marked a new level of market capitulation to central-bank
forces as it’s the first time the index has dipped below 5% in its 30-year
history (before January the market had never even fallen below 6%). The average
price of 107.31 cents on the dollar also marks a record high.

The other
widely followed market index, the Bank of America Merrill Lynch High Yield Master II Index, closed
last night within a whisker of 5%, at 5.005%, with the average dollar price
closing above the 107-cent mark for the first time ever at 107.20.

“The most
surprising thing this shows is that there’s really no yield floor for this
market,” says Brad Rogoff, head of credit
strategy at Barclays. “Those mental barriers really haven’t existed that we
thought existed maybe a year ago.”

With the Fed
and central banks around the world keeping interest rates near zero and pumping
money into the financial system, investors have been encouraged, if not forced,
to invest in the highest-yielding investments around, even if those yields
aren’t that high anymore. All this liquidity and low borrowing costs have
helped companies shore up their balance sheets, and default rates remain
negligible, which further emboldens investors to take on credit risk.

Rogoff says
the high-yield market’s main attraction used to be – as its name would indicate
– its high yields. At sub-5% average yields now, the market’s main
justification is its comparative yield versus other types of bonds, namely its
risk premium over Treasuries. The option-adjusted spread on the Barclays index
stands at 406 basis points over Treasuries, below its historic average but
still far wider than the historic tight of 233 bps reached on May 23, 2007. The
spread of the Bank of America index stands at 424 bps, above its all-time low
of 240, also recorded in May 2007.

“Usually this
is a market that’s traded based on yield, but now it feels like it’s trading
based on spread. It’s much tougher to justify based on historical yield
standards but on spread, its reasonable,” Rogoff says. The average spread could
still tighten a bit more, he adds, but any further tightening “is not
necessarily in conjunction with where rates are now,” meaning Treasury rates
would have to rise before junk bond spreads compressed much further, leaving
all-in junk-bond yields more or less where they are now.

The average
dollar price of 107 cents presents another problem, since many junk bonds can
be called by their issuer beyond a certain date at 103 cents on the dollar.
Rogoff says roughly half of the market is currently trading above its first
call price. “Those call dates typically are not tomorrow, but the market is
definitely constrained,” he says. “A year ago, you would have thought there was
a yield floor created by a dollar price constraint.”…….

To view the rest of the article, please visit: barrons.com

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

 

Paragon Wealth Management Awarded Best of State 2013

Posted May 2, 2013 by admin. tags:
Paragon Wins Best of State

To view the entire article, please visit www.prweb.com

Paragon Wealth Management, a national leader in the investment and wealth management field, has recently been awarded the Best of State award for investment advisory services for 2013.

Paragon Wealth Management, a national leader in the investment and wealth management field is proud to have been awarded the 2013 Best of State Award for investment advisory services. This is the fourth year that Paragon has been awarded this prestigious award, that recognizes their commitment to financial excellence and the community they provide for in Utah. Paragon also received the award in 2008, 2011, 2012, and now 2013. “We are excited to once again win Best of State,” says David Young of Paragon Wealth Management. “We never get too comfortable being the best, we are just always working hard to provide the best service for our clients.” The company has been focused on the best customer service in helping their clientele with 401(k), asset and wealth management, as well as investment services. Proud representatives of the wealth management company will be attending the Best of State Awards Gala on May 11th in Salt Lake City. As one of America’s 50 fastest-growing RIA Firms, Paragon follows the high standards of fiduciary responsibility. With over 26 years of experience within the investment and wealth management field and now 4 Best of State awards, Paragon is being recognized as Utah’s premier advisory firm. To find out more about Paragon Wealth Management: “Like” them on Facebook or please visit www.paragonwealth.com. About Paragon Wealth Management: Paragon Wealth Management is registered investment advisor (RIA) located in Provo, Utah. Established in 1986 by Dave Young, the company gives investors a smarter way to invest their money, develop sound investment strategies and achieve financial goals. Paragon was created to provide a more active and personalized alternative to the traditional buy, hold and hope approach to wealth management. Today, after over 26 years of refining proprietary quantitative financial models and building a trusted world-class organization, Paragon offers its clients across the U.S. a unique blend of proactive and proven money management techniques, extraordinary personalized service and a proven track record. Judging criteria for the Best of State Award Reference: www.bestofstate.org There are three basic judging criteria used by the judges, and each has a different weight. The Best of State judging process involves a 100-point system. The 100 points are allotted in the three following areas: 50 points are possible regarding the overall excellence, superiority and quality of a nominee’s products, services or performance. 30 points are possible regarding the creativity which nominees display to differentiate themselves from their competition. 20 points are possible regarding the nominee’s accomplishments to improve the quality of life in their community and state, and their efforts to make the world a better place.

Disclaimer Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

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