Kevin M. Wilson, ChFC, PhDPresident/CEO/CIO

1405 Medical Arts Building324 W. Superior StreetDuluth, MN 55802

Office: 218-464-4399 Toll Free: 877-327-5062

Fax: 218-464-4397Email: info@bluewater-cap.com

www.bluewatercapitaladvisors.com

Monthly Market Review

“Sell in May (or Maybe April) and Walk Away?”(An Exercise in Historical Analysis)

April 18, 2013 

11

Ted A. Pavlovich, WMSVP Wealth Management

INTRODUCTION

TED A. PAVLOVICH

2

Will History Repeat, Or Just Rhyme This Year?

3

SPRING MARKET WEATHER(STORM CLOUDS MAY HAVE A SILVER LINING)

TED A. PAVLOVICH4

5

There Are Seasonal Patterns in Many Markets, e.g., Gold & Silver

Average

This Week

6

Long-Term Average for Stocks ShowsWeakness From May-October Annually

7

More Recently the Seasonality Has Been More Pronounced

8

“Sell in May (or April) & Go Away?”

9

In Two Previous Years,High Yield Bonds DivergedFrom Trend in Advance of The Stock Market Sell-Off ,And It’s Happening Again This Year

WATCHES, WARNINGS, OR EMERGENCIES?

KEVIN M. WILSON

10

11

To Put This Year’s Seasonal Trends in Context, We Should Note That The World Economy Appears To Be In Recession

Yet There Is A Persistent Divergence Between The Economy and The Markets

12

13

The Divergence Is Caused By Central Bank Money Printing, Which Boosts Risky Assets

14

However In The U.S., The Economy is Weakening Faster Than The Markets Expected

15

Main Street and Wall Street Do Not Agree

16

Wall Street Is Cheering Recent Stock Buybacks, But They May Be Peaking

17

Valuations Are High, Suggesting That Future Returns Will Be Low On Average

18

There Are Long-Term Cycles In Earnings and Forward P/E Ratios That Are Peaking Now

19

Market Speculation May Be Peaking

20

Seasonal Down-Trends In Certain Sectors May Be Exacerbated By Other Market Factors

21

Combining Record Highs With Seasonal Sell-Offs Could Lead To Unexpected Market Drops

DOES THE FED PROVIDE SHELTER?

22

KEVIN M. WILSON

23

Each Spring The Economy Has Slowed Down And The Fed Has Printed More Money

24

In Spite of At Least $14 Trillion Of New Liquidity, Global GDP Continues To Decline

25

Each U.S. Market Dip Has Been Offset By The Surge Associated With Each New Wave Of Money Printing

26

This Is Serial Bubble Blowing By Central Banks, As We’ve Seen Before

27

At The Same Time, Bond Prices Have Benefited From QE

28

In Fact, Bonds Have Nearly Matched The Stock Market Since 1973

SUMMARY/Q & A

29

KEVIN M. WILSON

1) Seasonal trends in the markets are valid for investment purposes2) “Sell in May & Go Away” only makes sense if you can

predict the 2009 and 2012 outliers in advance, or ignore them3) However, you can re-allocate in the springtime to take

advantage of the seasonal bond rally when stocks sell off 4) A warning, but not yet an emergency

This report is provided for informational purposes only and does not constitute an offer or solicitation to purchase or sell any security or commodity and is not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. Any opinions expressed herein are subject to change at any time without notice. Information has been obtained from sources believed to be reliable, for its accuracy and interpretation are not guaranteed.

Investing in securities involves risk, including possible loss of principal. Past performance should not be taken as an indication of guarantee of future performance and no representation, express or implied, is made regarding future performance.

The firm does not provide tax advice; clients should contact their attorney, accountant, or other tax adviser regarding tax matters.

“BWCA is a state registered investment adviser in all states in which it is required to be registered. All Blue Water Capital Advisors’ customer assets are held in the customer name with Fidelity Institutional Services, clearing through National Financial Services (NFS), Member SIPC, a Fidelity Investments Company as Qualified Custodian.”

Disclaimer

3030