‘Tis the season to make sausage and legislation. In both cases, it is difficult to predict what is going to come out of the “grinder”. We can only work to influence the process, and then hope for the best. 

(E news editor's note: "If you love sausage and the law, never watch either being made."  This quote is attributed to both Otto von Bismarc and Mark Twain, and I have always thought it was a quote from justice Learned Hand.  Anybody who has the authoritative reference on this out there?)

Its official, DD-214's are NOW Online.

The economy moves in cycles. In prosperous times, rapid economic growth tends to help most of us earn and keep more money, and it generally helps companies prosper as well. During a downturn or recession, common in the fourth quarter, more consumers and businesses find themselves facing financial challenges.

The same kinds of cycles can come into play in the stock market as well. There are some companies that enjoy a rather steady stream of business regardless of economic trends. Examples would include stocks that fall under the “Consumer Staple” category – products that people need regardless of the economic environment. These are basic necessities, ranging from food to toothpaste to electricity in your home.

Other companies build their business around products or services that can be affected, at least in part, by economic trends. These are referred to as cyclical stocks. Their performance tends to be driven by market or economic cycles. Cyclical stocks can offer attractive opportunities for investors, but it is an area of investing that requires some knowledge and, in many cases, a fair amount of research, to understand the potential and avoid serious mistakes.

An example of cyclical investing

Trends in the housing market in recent years offer a good example of cyclical stock investing in action. Home construction companies, for instance, will benefit greatly when the housing market is enjoying strong growth as it did earlier in this decade. But when a slowdown occurs, the market becomes more difficult. For instance in the U.S., the Dow Jones Home Construction Index, (a group of stocks tied to the homebuilding industry) declined 20.69 percent in 2006. In that same year, as oil prices began to steadily rise, the Dow Jones Oil & Gas Index (made up in part by energy companies that were recording record profits) rose 20.31 percent. (The Wall Street Journal, Jan. 2, 2007.)

In both cases, the cyclical nature of the economy had a significant impact on these businesses. With demand for oil rising due to rapid economic expansion worldwide, oil company stocks were poised to benefit. With a housing “bubble” beginning to deflate in the U.S., homebuilders were seeing slower activity, reducing their profits and making their stock less attractive.

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Cyclical trends affect specific industries

Investing in cyclical stocks involves a narrow focus on the market, zeroing in on specific industries that are likely to be affected by economy trends. Sectors of the market that are considered either entirely cyclical, or are made up in part by companies that are viewed as cyclical in nature are:
•     Basic materials – metals (gold, aluminum), steel, timber, coal
•     Capital goods – large machinery and electronic equipmen
•     Communication – telephone and other telecommunications related businesses
•     Consumer discretionary – automobiles, home furnishings, retail stores, houses
•     Energy – primarily oil and gas and related industries
•     Financial – banks, brokerages and insurance companies
•     Health care – biotechnology and medical equipment companies
•     Technology – computer hardware and software, Internet companies
•     Transportation – airlines, delivery services

Timing is everything
 
Generally, stock investors are best served by using a “buy-and-hold” approach – investing in a stock or equity mutual fund and keeping the money invested for a number of years. That reduces the chance of a loss that is more likely to occur if the security is traded over a short period of time.

Cyclical stock investors take a different approach to improve their profit potential. When business or economic signals appear favorable, that is considered a buying opportunity. But when they perceive that conditions are changing for the worse in a particular industry, they want to liquidate stock positions in advance of any major slide in the stock’s price.

In other words, cyclical investors must try to determine when a company or industry has reached a low point (a sign that it is time to invest) and when it may be near its peak (a signal that it is time to sell the position). Timing the market in such a way can be a significant challenge for any investor. Typically, it requires a good deal of time and effort researching the market and specific stocks.
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Cyclical stocks in today’s market

The current economic environment, which appears to be slowing, does not present as many attractive buying opportunities for investors looking for cyclical stocks. Certain areas of the economy, such as housing, are facing significant challenges. If consumer spending should slow, stocks of “consumer cyclical” stocks are likely to suffer as well. This is particularly true of stocks related to non-essential items for consumers or businesses. For instance, individuals concerned that they may face a possible layoff are less likely to spend money on a new car or a big screen TV, dampening prospects for companies that produce those items.

The key point to remember is that cyclical investing involves significant knowledge and time in order to generate returns that will outpace what you can earn by simply buying and holding a stock mutual fund. Consult a financial advisor to review your overall financial picture. (LTC Jay Harper)

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This column is provided for informational purposes only. This information is not intended to provide investment advice, does not account for individual investor circumstances, and is intended to be generic in nature. It should not be applied or relied upon in any particular situation without the advice of your tax, legal and/or your financial advisor. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Investments described in this column may not be suitable for all investors. Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

Financial planning services and investments offered through Ameriprise Financial Services, Inc., Member FINRA & SIPC.

 © 2007 Ameriprise Financial, Inc. All rights reserved.

 File # 70508
(12/07)

Shown here are Tony SIevers and his wife, Carol, at the dinner MOAA hosted on 13 October 2007 at the Williamsburg Inn.  This dinner was held to reward Virginia chapters for being the best Give Me Ten recruiters in the nation.  VIPMOAA President, Col Ernie Hinojosa, chose the Sievers as the second couple to attend when VIPMOAA earned four seats at the dinner because we recruited 25 via the Give Me Ten campaign.    See details on the 2008 program in this news letter. Two other VIPMOAA members attended because they are appointed officers on the Virginia Council of Chapters (VCOC), which led Virginia's Give Me Ten program, Maj Melva Mallison and Ms Jackie Peters. Extra VCOC officers were invited because Virginia recruited more than 1,000 state-wide.
	Hinojosa and Eagle	Hinojosa and Browning
At right are photos of the Communication Awards presented at  the VIPMOAA  meeting, Chesapeake Retirement Community, 24 Jan 2008 (The awards are for communications in 2006).   Jim Eagle's award was for Website and Don Browning's was for Unique Communication -  a Chapter membership brochure. /  Melva
And here is a Photo of VIPMOAA member, COL Wally Wilson, USA, Retired, between the  two Chesapeake staff members who spoke to us at our 24 Jan 2008 VIPMOAA meeting - Liz Anslow and Gail Billups.
And Finally, VIPMOAA Stormed the Hill, in Richmond, January 2008.
Shown above, Blair Smith, Delegate Phil Hamilton, and Melva Mallison (Photo Mallison)		Above, we see Frank Duckett, Delegate Brenda Pogge, and Ernie Hinojosa.

TAPS: Mike Lazorchak, COL, USAF, Retired
Charles, V. Streker, Jr., LTC,  USA, Retired

Our guest speaker this month is Kelly Rourke, Education Coordinator at the Virginia Wildlife Center.  Kelly has a BS in Biology from York College in Pennsylvania, and has worked as an educator and instructor in marine science, wildlife and the environment for several years, becoming the Center’s Education Coordinator in 2005. 

The Wildlife Center, located in Waynesboro, Virginia, is the Nation's only true teaching and research hospital for wildlife medicine and has earned international recognition and acclaim for its work caring for injured animals. It was formed in 1982 to provide quality health care, often on an emergency basis, to native wildlife. Since its inception, the Wildlife Center has treated more than 47,000 wild animals, representing 200 species of native birds, mammals, reptiles, and amphibians; and has shared the lessons learned from these cases with some 1.4 million school-children and adults across Virginia.  The Wildlife Center has also trained a corps of wildlife medicine practitioners, including veterinarians, veterinary technicians, and volunteer wildlife rehabilitators. Those who have benefited from the professional training programs offered by the Center may now be found at several prestigious zoos and on the cutting-edge of wildlife veterinary medicine around the world.  

It is a privilege to learn more about the work of this wonderful organization.  

CHAPTER LUNCHEON MEETING
MARCH 27, 2008
LANGLEY AFB ENLISTED CLUB
11:30 AM – 1:30 PM

PROGRAM:  RENOVATION OF CHAMBERLIN HOTEL-WHICH WILL REOPEN AS A RETIREMENT COMMUNITY

Drucker & Falk, LLC has agreed to furnish us a program on the renovation of The Chamberlin Hotel, which will soon reopen as a retirement community.  Our program will feature The Chamberlin’s Executive Director, Susan Moniak and its Marketing Director, Joan Woodson.  The Chamberlin, located on Fort Monroe, was erected in 1928, and was once the premiere hotel in all of Tidewater.    Drucker & Falk, LLC, the real estate firm that put together the investors to purchase the building in 2004, is overseeing its redevelopment and will manage the community.  The Chamberlin is being converted into a senior independent living facility of 133 luxury apartments. Construction began in June of 2006 and will be completed later this year. The complex will be home to a "for rent" retirement community, open to residents age 62 and over, with apartments ranging in size from 536 to 1,487 square feet.  Rental fees will include all utilities and a variety of amenities such as fine dining, linen service and public transportation.   The Chamberlin will feature unsurpassed views of the Hampton Bay and Atlantic Ocean from as high up as nine stories. The total project cost of The Chamberlin is over $50 million, and it was the largest historic tax credit project ever undertaken in Virginia when the renovation began.  Sentara Healthcare, the dominant healthcare system in Tidewater, will collaborate with The Chamberlin, providing expertise in fitness and home healthcare services to enable residents to “age in place” in their apartment homes, and will also provide facilitated access to its nearby assisted living and skilled nursing facilities. 

Sue Moniak, Executive Director of The Chamberlin, is a veteran senior housing property manager.  Prior to joining The Chamberlin, Ms. Moniak was employed by the Chambrel at Williamsburg, where she began as Director of Health Services in 1988 and was promoted to Executive Director of the Chambrel, a post she held for 10 years.  A registered nurse and graduate of Ohio State University, Sue has received numerous awards and recognition for her work, including 2003-2005 Executive Director of the Year for Brookdale Senior Living, the nation’s largest operator of senior living communities, as well as the 2001-2003 award for the Highest Resident Satisfaction from the same organization.

Joan Woodson, Marketing Director of The Chamberlin, is an experienced realtor and sales professional whose responsibilities will include working with potential residents to find ideal living options, managing new resident orientation and implementing onsite events and receptions for residents and visitors.  Ms. Woodson previously served for nine years as Director of Sales and Marketing Specialist for the Chambrel at Williamsburg, Prior to that, she practiced real estate for Long & Foster in Williamsburg.

This timely program should be of interest to all.  There will be a cash bar open from 11:30 am to 12:15 pm., followed by lunch and the program.   To attend, send your check and reservation coupon to arrive at VIPMOAA Hospitality no later than Friday, March 21st. Get a reservation coupon. Get a menu and schedule.  Directions to the Langley enlisted club .