Head of the Class

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Education is fundamental to the success of individuals and society. The better the education, the better we’ll all end up. At least that’s what I’d like to think is what motivated Bill Gates, Mark Zuckerberg, and many other investors in backing Bridge International Academies, a company whose goal is to bring inexpensive, effective, private education the world’s poorest children. Bridge’s founders are challenging the historically recent assumption that governments rather than private entities should provide large education programs. The company’s mission is to bring their brand of education to 10 million children and turn a profit by expanding its standardized, online teaching model across Africa and Asia. The Wall Street Journal has published an article about the company from a market perspective.

No matter one’s view on private vs. public education (which are sure to be sparked by the idea!), there can be no arguing that the child’s parents and the importance they put on education plays a significant role in the success of any education outcomes. Just as the many parents sending their kids to the Bridge Academy are invested in their children’s outcomes, as a small business we are invested in our clients’ outcomes. Unlike a big business (or an overwhelmed government), each individual client matters to us and getting the best outcomes for our clients is fundamental to our success. We do our best to meet the needs of our clients, both in the here and now, and for their future – education and finances both need a long term view.

The view for the U.S. economy has reports showing that we have slowed down: Factories expanded at the slowest pace since May 2013; the Institute for Supply Management?s index declined 1.4 in March to 51.5 (readings above 50 indicate growth); and U.S. exports contracted for the third month in a row – an indication of the stronger dollar. Consumer spending was flat in February and retail sales decreased. Americans have extra cash due to the discount at the gas pumps but instead of spending they have opted to raise their personal savings rates. Reports of soft company earnings, in addition to the U.S. economic numbers, brought concerns about U.S. growth and thus volatility to the market. Mid-March had the Fed’s changing the context of their monthly meeting. Pershing Industry Watch questioned the timing of an interest rate hike in 2015. A very recent Reuters poll forecast U.S. stocks to post modest gains this years as rising interest rates and a firmer dollar partly offset strong economic growth. Internationally, the falling Euro may stimulate economic growth in Europe. CNN recently reported that growth in Germany is starting to accelerate providing a bit of relief to market diversification.

The winds of March stymied the U.S. markets with the major indices erasing some of their February gains. The blue-chip barometer (the DowTR)* shed 1.77 percent and is barely in the black year-to-date as of March-end. The S&P 500 Index (SPXTR)* back-peddled a negative 1.58 percent. Lastly the tech-rich Nasdaq Composite (COMPTR)* came in with a 1.17 deficit. The S&P Case-Shiller 20-city composite Home Price Index showed a slight uptick with the month of January reporting a 4.6% increase on a year-over-year basis. Monthly data for the month of January over the month of December was basically flat for the 20-city composite index.

Regards and Thank you,

The Team at White Raven Financial


*Indexes are unmanaged and do not reflect service fees, commissions, or taxes. You cannot invest directly in an index. Past performance is not necessarily indicative of future results. Returns for the DOW and the S&P500 are total returns from Pershing Netx360. Return for the NASDAQ is the NAV total return provided by Morning Star as of 2015March31