While the first quarter of 2012 beat expectations, the second quarter poured col d water on investors hopes

for a strong encore. Much like the last two years, the economy got off to a solid start only to falter in the spring. Despite a strong showing in the latter half of June, markets are down for the quarter, erasing s ome of the gains we saw in Q1. However, the major indices are still up significa ntly for the year. Since January 1, 2012, the S&P has gained 8.31%, while the Do w is up 5.42%, and the Nasdaq grew by 12.66%.[1] What are some of the factors that contributed to the Q2 doldrums? Most can be gr ouped into two major categories: 1. Global economic turmoil Concerns about the European debt crisis continued to dominate headlines this qua rter, as lawmakers struggled to contain a rapidly growing crisis that threatens the integrity of the entire Eurozone. Greece skirted the edges of a disorderly d efault on its debt as popular opinion rose against punishing austerity measures. Although voters elected a pro-bailout coalition government, it is still unknown whether Greece will remain in the Eurozone. The Spanish were able to secure bai lout funds to recapitalize their struggling banks from a centralized bailout fun d as the Eurozone gambles on a more centralized union to save itself.[2] China, the worlds second-largest economy is decelerating; its central bank is des perately trying to cushion the landing as Chinas manufacturing and export sectors major drivers of the Chinese (and global) economy slow.[3] 2. Concerns about domestic growth Investors and analysts are worried about troubling economic reports this quarter that suggest the U.S. economy might be slowing. Stubborn unemployment, slow eco nomic growth, and a stagnant job market continue to undermine confidence. One br ight spot is that falling oil and gas prices offer consumer pocketbooks a break, and may encourage Americans to boost spending, the primary driver of economic e xpansion. Taking into consideration the upcoming presidential election and expiration of t he so-called Bush Tax Cuts in January, its no wonder many analysts expect a perio d of sustained volatility in the months ahead.[4] With this in mind, we encourag e you to stick to an investment strategy that is suitable for your own risk tole rance and personal investment objectives. Every individual has unique needs, and we always strive to match our clients to appropriate solutions to fill those ne eds. If you have any questions or concerns, please dont hesitate to contact us.