This past week was the weakest three weak period since November. We continue to see turbulence ahead. What is causing this round of uncertainty? Tapering, when will it occur.

 When will the Federal Reserve begin to slow its accommodative monetary policy that has been in place for most of the past 5 years? Trading may be light this week as we head into the Labor Day weekend. There just isn't a ton of data for investors to get excited about. Growth continues to be anemic and unemployment remains high. Expect it to be a volatile few weeks.

  Recent Fed minutes did not provide any clear direction on when the Fed would begin to reduce its $85 billion-a-month of bond-buying. The recent Fed minutes showed a mixed picture with some members appearing to opt for patience. We feel it is just too early to tell if the economy is improving enough for the Fed to begin tapering. What we do feel is that the Fed will pump the accelerator as necessary and that this market has room to move.

 This has been a Fed fueled bull market in 2013. As we return to the VIX (volatility index) we see that any signals from the Fed will be a double edged sword. As investors, we can hope for no tapering or easing; as consumers in a still very fragile economy, we hope for a signal from the Fed that things are truly improving.

 This week we will see an economic report published every day. Perhaps the most important report will be on Thursday when we get the best look at US GDP, or how well the economy is growing. A weak report means a bearish sign for the economy, but a bullish sign for the market. At SSWM we believe that the Fed will continue to telegraph its interpretation of the economic data, the market will react, and we can continue to capture analytical data that helps going forward.

 The S&P 500 is down 2.7% percent over the past three weeks and has dipped below its 50 moving average (red line) during several sessions. Analysts feel we could see a stable floor at 1,636, the 100-day moving average. Range bound between this floor and the high seen this month of 1,710. The Fed meeting in September, we hope, will provide more market moving data we can use for continuing interpretive forecasting.

Consumer confidence appears to have stabilized, how are you feeling? Sua Sponte.

Bradford C. Bruner for Sua Sponte Wealth Management

  This week, Colorado's CollegeInvest announced it was closing its Colorado Prepaid Tuition fund on November 1st. A recent actuarial report showed negative cash flows, currently, and when trended out for the remaining life of the fund. A knife was stuck through the proverbial heart of the fund with a cry of. "I'm unsound and no longer financially viable". A fitting metaphor for the entire state of our college financing dilemma. You really can't save, grow, and pay. Some of Colorado's sharpest minds couldn't even get the formula to calculate.

 Prepaid tuition funds allow investors to pay for future college tuition costs at present-day rates. State-based plans typically guarantee a rate of return that varies with changes in tuition. As the tuition rate increases year to year, so does the rate of return.

 The Prepaid Tuition Fund (Fund) was established in 1997 to provide families with an opportunity to save for future college education expenses. The Fund offered an annual enrollment period for purchasers to buy prepaid tuition contracts.

 The Fund offers certain federal and State tax advantages to investors. The Fund was designed to keep pace with average tuition inflation in Colorado. Under the original contract terms, a purchaser bought tuition units based on current average tuition levels and the investment was valued and paid out at the level of average tuition or an average minimum of 4% per year over the life of the contract (when held until the first payout date), whichever was greater, at the time of payout.

 The contract terms were amended on February 20, 2003. Under the new terms, the annual increase in average tuition as defined below is limited to the lesser of 1) the percentage increase in actual average tuition at Colorado public colleges and universities or 2) 5.5%. Average tuition is determined annually by the Fund by adding (1) the sum of the applicable year’s resident, undergraduate, general full-time tuition at all Colorado public four-year colleges and universities, to (2) the average full-time tuition at the State community colleges for that year. Full-time tuition equates to the tuition charged for the equivalent of fifteen credit hours for each of two semesters. The total of (1) and (2) above is then divided by the number of Colorado public four-year colleges and universities in existence at such time plus one for the State community colleges.

 A purchaser can use amounts contributed and earned in the Fund to pay eligible expenses at private and public colleges, universities and vocational schools throughout the United States.

  In the case of the Colorado state fund, it became unsustainable because of rapidly increasing tuition rates during the past decade. Instead of the expected 3 or 4 percent rate of return, the fund was paying its maximum 5.5 percent rate, and that could not keep pace with skyrocketing tuition increases.

  A good rule of thumb is that tuition rates will increase at about twice the general inflation rate. During any 17-year period from 1958 to 2001, the average annual tuition inflation rate was between 6% and 9%, ranging from 1.2 times general inflation to 2.1 times general inflation. On average, tuition tends to increase about 8% per year. An 8% college inflation rate means that the cost of college doubles every nine years.

 The mission of CollegeInvest was to be Colorado’s higher education financing leader and to help Colorado families break down the financial barriers to college. Those barriers just got another reinforcement. Even the state has thrown in the towel. Sua Sponte.

Bradford C. Bruner for Sua Sponte Wealth Management