Service is King, even today when many financial firms treat it like the Joker. Try getting a copy of your 1099, or figuring out a K-1. What you’re faced with is, perhaps, hours in a phone queue maze with no satisfactory answer. Some of these firms, not Fidelity, are too big and end up failing simple tasks. Other’s are left offering funds that are too big (like some of Vanguard’s) and then fail to meet the needs of investors (such as ESG funds from BlackRock and others) while trying to save the world. All you want is what you asked for, is that so hard? For some, in a word, yes. Action Line: … [Read more...]
Archives for April 2021
Your Port Against a Storm.
I developed the Dynamic Maximizers® portfolio as a short-term interest rate proxy. It is intended as a guide to investing for maximum safety of principal and income for ultra-conservative investors. This century has, so far, already witnessed two massive stock market crashes. A third, thanks to total incompetence in Washington is already baked into the cake. The Maximizers has, over a twenty-year proxy history, never suffered a disappointing year. Keep up with our latest reports. Originally posted on Young's World Money Forecast. … [Read more...]
Inflation? Yes.
You don’t need to read the latest Producer Prices report to see that inflation is here. All you need to do is go for a walk around your neighborhood to see home prices, go shopping for groceries, or open the utility bills, and you see higher prices for all. Pandemic or not, prices are higher. You don’t have to be a genius to understand what China’s attempting to accomplish with its foray into digital currencies. Tired of buying worthless Treasuries, they want a plan B. What happens when China steadily tries to replace the dollar as the reserve currency? Both China and the U.S. government … [Read more...]
Banks Prepare for Boom
Ben Eisen reports in The Wall Street Journal that banks are preparing to loosen up money they've been holding for lending into a major economic boom. He writes: The accelerating economic recovery is likely to boost bank profits. Encouraged by government efforts to pump money into the economy and signs that Americans are spending more, the largest financial institutions are expected to release some of the rainy-day money they set aside after the coronavirus pandemic hit. That will offer a jolt to their income in the first three months of the year. JPMorgan Chase JPM -1.65% & Co., … [Read more...]
Fidelity Investments #1: Hires 4,000 Focuses on YOU
The financial services business is booming. The keyword being “services.” Because as millions of existing and new retirees look for help, the demand for service is stretching some firms’ capacity to help them. Not Fidelity’s, because, as you know, Fidelity is #1. With all the talk about robo-advisers, one fact remains with automated services; nothing can replace a live conversation with a financial adviser. I know my customers. I know when their emotions are high, and that’s something I don’t see a robot catching. Service is a huge part of getting your finances right. I know you don’t … [Read more...]
Larry Summers: Stimulus “Substantially Excessive”
If even Larry Summers thinks the current stimulus being poured on America's economy is "substantially excessive," you can bet it's way more than necessary. Here are some of Summers's comments from a recent interview with FT's Martin Wolf: If you look at the economy at the beginning of this year, prevailing forecasts were that Covid would reduce wages and salaries to American households by $20bn-$30bn a month, with that figure declining over the year. So, that would be a $250bn-$300bn hole in wages and salaries over the course of the year. So, I look at this hole and then I see $900bn of … [Read more...]
It’s as Simple as 4%? No, Not Anymore
In my conversation with you this week, we talked about the appropriate draw rate from your portfolio. We discussed how the days of a four percent draw are history. With interest rates nailed to the floor, you need to adjust accordingly. Thankfully, most of you have, I hope. Take a look at Dick Young’s investment North Star. That, in a nutshell, is how savers are penalized by Washington. Now, look at the dividend yield on the Dow Jones Industrial Average. Do the math. A simple back of the napkin calculation of a 50/50 portfolio yields a fraction of what it used to. These are not easy … [Read more...]
Wall Street’s New Sub-Prime Borrower
Zero percent interest rates create many distortions that today’s central bankers seem to ignore. Ben Bernanke’s successful campaign to shift the blame from the Fed to Wall Street for the last financial crisis has emboldened his successors. A careful study of financial history shows that almost every mania has been enabled by a flood of liquidity. The problem as was identified over 100 years ago by Walter Bagehot is that “John Bull can stand many things, but he cannot stand two percent.” Wall Street has found a way to fill that need. As the WSJ reports here, Wall Street is now selling new … [Read more...]
One Word Explains the Worth of Your Neighbors’ House
In my conversations with you, you’re telling me home prices are crazy. It really doesn’t matter where you live. Take, for example, a realtor and prospective client I was talking with yesterday. He operates in the mountain west and said he has tons of buyers, just no homes to sell. No supply. And that’s residential real estate today in a nutshell—supply. On a recent trip to Key West, we talked with a realtor getting ready to show a house as we were walking by. Curious, we asked if we could take a quick look. This tastefully done home was a perfect, cozy, old town Key West conch retreat. The … [Read more...]
Is Inflation Imminent? Prepare Now
At FT, Pascal Blanque, explains that inflation is imminent and that investors must prepare themselves for what's to come. He writes: A change in market regime often occurs with a change in the mandate of central banks. The central focus on inflation targeting that started with the arrival of Paul Volcker at the helm of the Fed in 1979 is fading. This much is clear from the new priorities recently adopted by two central banks: achieving full and inclusive employment by the Fed and reducing global warming by the Bank of England. For investors, this means the rise in bond yields might not be … [Read more...]