This Week @ Reeves Independent

Today has been a pretty hectic one for us in the office.

Steve our new para-planner is now fully settled in and by all means thoroughly enjoying being part of the team. We currently have lots of work going on (good thing) so he has lots to get on with. 
Liam has been interviewing half of Newcastle for the position on promotional staff that we are currently recruiting and after a few dozen phone interviews has selected the best candidates to come into the office tomorrow afternoon for some training.

Tomorrow is week 3 of the Reeves Independent Training Academy. Nigel has gave a really good introduction to the company and a start on the "approach" the next couple of weeks will really make or break the candidates as they will be doing practical training such as face to face dummy runs which will show us who we want working on our stands. Last week, new recruit James, was the first to feed through from the training academy and although I wasn't there the guys on the stand said he did brilliantly, so well done to him.

Patrick Leonard attended an Invesco seminar yesterday at the wonderful Marriot Hotel in Gateshead. Our Marketing man picked up lots of advice and opinions on the markets which will hopefully give him the grounds to write some very good articles on this very blog. I know he has taken some fantastic information from them about their review of the markets so look out for monthly reviews.

Our football team, Newcastle Chemfica are doing extremely well in the Northern Alliance division 2 and are sitting in the top 3, this weekend they entertain Red House Farm at Cochrane park. Red House are a new, youthful team that will provide the lads with a difficult test. We now do programmes on a matchday, so if you are interested in sponsoring that, let us know.

Reeves.

UK Overview September

October 2010 (covering the month of September 2010)

UK stocks were strong in September with the FTSE 100 and FTSE All-Share indices regaining positive territory for the year. The month’s strength was based around a general increase in global risk aversion and largely solid corporate newsflow, albeit that economic data domestically remained unconvincing.

Economic data released during the month added further evidence to the difficult outlook ahead. Service sector activity, a significant driver of growth, dropped to 51.3 in August, from 53.1 in July, according to the CIPS/Markit survey. The housing market experienced further signs of a downturn, as data from Nationwide, Rightmove and the Royal Institute of Chartered Surveyors showed prices falling due to an increase in supply at a time when demand is challenged by mortgage availability and concerns about the outlook for employment. This was reinforced by data showing that while the availability of mortgage credit had actually increased slightly over the last three months, the number of mortgage approvals for new house purchases fell to its lowest level for six months, based on data from the Bank of England. Retail sales data was mixed, with the ONS reporting a fall in sales during August, while the CBI’s September survey suggested that high street sales are expanding strongly.

Results from retailers, including DSG international and Debenhams, were positive, but both warned of uncertainty ahead for the UK consumer. DSG reported an increase in sales, boosted by the World Cup and iPad sales, while Debenhams forecast full-year pre-tax profits of £150m. Banking stocks were in the news as both Barclays and HSBC announced board changes. Bob Diamond, formerly head of the investment banking arm Barclays Capital, was appointed as the bank’s new chief executive. HSBC’s changes saw chairman Steven Green confirmed as the government’s new trade minister, to be replaced by the group’s chief financial officer Douglas Flint. Chief executive Michael Geoghegan was also replaced by a former investment banker, with Stuart Gulliver taking over as CEO. Lloyds Banking Group also revealed that chief executive Eric Daniels will leave over the next 12 months. WM Morrison issued first half results that were ahead of forecasts and Imperial Tobacco’s trading update was well received by the market. Merger and acquisition news also supported stocks during the month as BAE Systems announced plans to sell parts of its North American business, with proceeds expected to be in the region of $2bn. KNOC’s drawn-out bid for Dana Petroleum appeared to be heading towards a conclusion as the group gained control of more than 64% of the group’s stock.

September Markets Review

October 2010 (covering the month of September 2010)

September turned out to be a positive month for equities with US stocks leading the rally. Willingness from the US Federal Reserve to provide further monetary stimulus via quantitative easing and its commitment to reflate the US economy boosted investor confidence and risk appetite. European equities also registered healthy gains despite further reminders that the Eurozone’s fiscal crisis is far from over. Positive corporate newsflow underpinned UK stocks although economic data released here during the month added further evidence to the difficult outlook ahead. Broad weakness in the US dollar pushed the euro higher and prompted the authorities in Japan to intervene in the currency markets to weaken the yen. Commodities had a strong month with oil and gold prices rising sharply. In fixed income markets, core government bonds delivered negative returns and 10-year yield spreads for Greek, Irish and Portuguese bonds over German Bunds remain elevated.  

US

• Better-than-expected macro data dampens down fears of a double-dip recession
• S&P 500 has its best September since 1939, rising by 8.8% in US dollar terms
• Technology and industrials the best performing sectors

Europe

• Equity markets rally as corporate newsflow remains upbeat
• Spain downgraded by Moody’s while Ireland bails out the banking sector
• Euro rises to six-month high versus the US dollar

UK

• UK stocks regain positive territory for the year-to-date
• Mixed economic data suggests a challenging outlook
• Significant board room changes within the banking sector

Asia Pacific

• Japanese authorities intervene in currency markets to weaken the yen
• Japan’s second quarter GDP revised up to an annualised rate of 1.5% from initial estimate of 0.4%
• Improvement in Chinese economic data renews concerns of further tightening

Emerging Markets

• Double-digit returns for emerging market equities
• Rally driven by better economic data from US and China
• Brazil’s Petrobras raises US$70 billion in the world’s largest public share offering

Fixed Interest

• Negative returns from core government bonds and better quality investment-grade bonds, but stronger performance from high yield
• Clarity around bank capital requirements sees subordinated bank debt improve
• UK inflation remains stubbornly high

Key Points From Today's Spending Cuts

Chancellor George Osborne has unveiled the biggest UK spending cuts since World War II, with welfare, councils and police budgets all hit.

- £81bn cut from public spending over four years

- 19% average departmental cuts - less than the 25% expected

- £7bn extra welfare cuts, including changes to incapacity, housing benefit and tax credits

- £3.5bn increase

- Rise in state pension age brought forward

- 7% cut for local councils from April next year

- Permanent bank levy

- Rail fares to rise 3% above inflation from 2012

Today's Markets

Poor day for the markets. (20/10/10)

FTSE 100 5686.48 - -17.41

Dax 6465.24 - -25.45
Cac 40 3787.59 - -19.58
Dow Jones 10978.62 - -165.07
Nasdaq 2436.95 - -43.71
BBC Global 30 5407.35 - -3.73

Tuesday's Markets

FTSE 100 5733.67 - -8.85
Dax 6527.21 + 10.58
Cac 40 3832.71 - -1.79
Dow Jones 11143.69 + 80.91
Nasdaq 2480.66 + 11.89
BBC Global 30 5433.97 + 8.88

Today's Markets

FTSE 100	5766.29	+	18.94
Dax	6482.57	+	48.05
Cac 40	3843.55	+	15.21
Dow Jones	11096.08	+	75.68
Nasdaq	2441.23	+	23.31
BBC Global 30	5410.78	-	-3.36

Day 1

Today is an exciting day for Reeves Independent as Nigel Reeves launches the Reeves Independent Training Academy. Students from the cities top universities have been invited to partake in a training scheme that will give them experienced and skilled expertise in sales/marketing and business.

The students are currently in our board meeting listening to Nigel talk about who we are, what we do and what we want to achieve. Nigel is then going to talk the students through basic sales techniques concentrating initially on "how to approach a potential lead" and then concluding with "identifying a lead" and "qualifying a lead".

All of the students will be given a chance to test their skills on our promotion stands in the upcoming weeks and today have been informed that they can earn up to £240 for six hours work.

We have students from Ireland, Spain and Latvia attending today and we wish them all the very best of luck and success in their future in sales.

Quote Of The Day 12/09/10

Determine the thing that can and shall be done, and then we shall find the way.

Abrahim Lincoln

Todays Markets

FTSE 100 5731.49 + 69.9
Dax 6396.28 + 91.71
Cac 40 3803.08 + 54.22
Dow Jones 11020.4 + 10.06
Nasdaq 2417.92 + 15.59
BBC Global 30 5411.99 + 17.28

The Fundamental Principles of Investing

Whilst some of what follows may seem obvious to many, the essential principles of investing are often forgotten or poorly understood, but it is vital that they are considered and comprehended, because they are fundamental to the questions all investors should not only ask, but more importantly, have answered before making an investment of any kind.

Particularly important questions and issues are:

'Should I be investing at all?'
'What are my investment objectives?'
'Is it financially worthwhile for me to invest?'


Our view is that it is impossible to answer the first two of these questions if you do not have a roadmap charting your financial journey through life to your desired destination - or in other words, a proper financial plan.

This is because only by going through the rigours of the full financial planning process will you or your advisers be in a position to make considered, informed decisions about such important matters as whether an investment portfolio is appropriate for you and what level of return you require in order to help you to achieve your financial and life goals.

In considering the answer to the third question, however, it would be worthwhile revisiting a few of the basic features of the capitalist society in which we live:

When you deposit your money with a Bank, Building Society or Government, you are essentially providing them with capital that they can use to finance or expand their wider business or Governmental activities. In exchange for this deposit of capital, you will be offered a relatively low return in the form of interest payments, but with a comforting guarantee that the nominal value of your money will not fall.

However, even though the nominal value of your money will be protected if you choose to only hold cash deposits, you must keep in mind that the real value of your money may well be eroded over time by the pernicious effects of inflation, if you choose to pursue a cash-only investment strategy. Indeed, as we always remind our clients, it is all too easy to underestimate the negative power of inflation or assume that because you can't 'see or feel' it happening, it doesn't exist. Inflation has real consequences and must be taken seriously.



When you invest your money in the shares of companies (equities), you are also providing those companies with capital that they can use to finance or expand their business activities. In exchange for this input of capital, they will try to provide you with a relatively high return in the form of a growth in the value of your capital and usually dividend income as well.


However, the companies in question cannot guarantee that you will receive any dividend income payments, nor can they guarantee that the nominal value of your money will not fall and this uncertainty means that there is an inherent and sometimes discomforting risk involved in offering your capital to companies.


Despite this, there is an observed and accepted phenomenon, supported by a mass of research and data, that over the longer term the returns from equities are considerably greater than those from all other asset classes and importantly, the returns are also significantly greater than the long-term rate of inflation.


This increased long-term return from equities is known as the 'equity premium' - i.e. the greater reward delivered to an investor in exchange for their willingness to take a greater level of risk with their capital, by providing it to companies through the purchase of their shares.

To summarise, with investing as in all other aspects of life, it is essential that investors accept there is no such thing as a 'free lunch', whereby the high returns and inflation-beating capabilities of equities can be accessed by taking the low risk associated with cash deposits.

At Reeves Independent, our one aim is to help achieve your goal. Whether you want to go down the slow and steady route or if you would prefer to enter into some high risk investments, the decision is on you. We don’t want to make a quick buck from you and we would like to enter a long term business relationship that will see you benefit from our 20 years experience and trained expertise.