CROPS

The stock market has essentially accomplished nothing in the three months since mid-January. There is plenty of dithering about Spain, followed by Italy, then Portugal and so on. The elected course of response to these serial bailouts by the European Central Bank (ECB) and the International Monetary Fund (IMF) is basically to absorb the debts with international funds, ultimately supported by the U.S. dollar. It is well known that the stock markets require a "wall of worry" to climb, so we have no lack of climbing material.

The doomsday commentators are hard at work, but the information world is changing so fast that historical patterns may not be applied as easily. The current upward rally in the Dow Jones Industrial average is now three years old and has come up from lows of 6,750 in March of 2009 to the current 13,000 level. A "normal" setback from this kind of move would be back to 9,900 or so, a 23 percent decline. In our current highly inflamed political and economic environment, it is not difficult to imagine the cries of despair that kind of move would evoke.

It is a tough time for fixed income investors relying on interest payments, who are forced to either spend principal or extend risk to increase income. Dividend paying stocks have had a new day in the sun, especially when compared with 5-year CD's at 1.7 percent or less. Home Depot (HD) is yielding 2.3 percnet. El Paso Electric (EE) sports a 2.3 percent dividend rate. More risk? Yes, but what can an investor do?

At least these companies have a history of dividend increases. By the way, our local power company, Pacific Power is owned and operated by a holding company known as Midamerican Energy Holdings Company, which is in turn controlled by the wellknown Berkshire Hathaway (BRK.a and BRK.b) whose head is Warren Buffet of investing fame. BRK pays no dividend to investors.

The precious metals markets have come down from their highs at $1,930 per ounce for gold last September and $49.82 for silver a year ago ( based on nearest futures contracts). Gold is now about $1,650, or $280 below its high, while silver is around $31.70, down $18. Looking for safety? It's not in these markets unless you want to bury your investments in a coffee can under the back rose bed .

Crude oil and gasoline both remain in an upward trend, although crude at $103.50 Tuesday was more than $6 per barrel below the highs of early March.

The wheat market has pushed back down to the same level it saw at the end of March, just before it popped up 45 cents in one day on end-of-quarter and end-ofmonth position adjustments. The northern hemisphere crops look to be in good shape, so the chances of a large upward price move are relatively small. The potential price range is large enough to make market observation and opportunistic trading feasible, and we are in the weather season, so fasten your seatbelts. There is something here for everyone.

Information and opinions contained herein come from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital.