Young Research & Publishing Inc.

Investment Research Since 1978

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A Guaranteed Investment

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You know there aren't many guaranteed investments out there today. But If you are a participant in a defined contribution plan, such as a 401(k), you may have access to one of my favorites. It's called the company match. The company match is when your employer matches your contribution up to a certain percent. For example, if the company match is 5% and you contribute 5% of your salary, you have a total contribution or savings of 10%. If you save 2% the company matches 2% and your total contribution is only 4%.  As you can see you want to meet that company match each and every year. It's hard … [Read more...]

Counterbalancing for the Crushing Market Declines

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A counterbalanced portfolio is your key to investment success. For an example of how counterbalancing works I’ll point you to the Vanguard Wellesley fund. For my taste, a “one size fits all” fund simply does not exist today. But this one comes pretty close. Take a look at the years where stocks were destroyed. When you’re in retirement or close to it, you can’t afford to take the big hits. Counterbalancing—the 60% bonds and 40% stocks in Wellesley—helps to ease the pain. E.J. Smith works with new investors that have $2 million or more to invest. He can be reached … [Read more...]

The Shocking Reality for the Average Duration of Unemployment

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How does this chart of the Average Duration of Unemployment look to you? The beard scratchers at the Fed can’t be thrilled about their $85 billion-a-month boondoggle. The Wall Street Journal details the ugly news: The U.S. economy added 204,000 jobs in October, the Labor Department said on Friday, much higher than the 120,000 expected by economists. The unemployment rate rose to 7.3%. The stronger data could heighten the prospect that the U.S. economy may be healthy enough for the Fed to soon begin withdrawing, or "tapering," stimulus from its $85 billion-a-month bond-buying program, … [Read more...]

Your Personal Financial Security Part I

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Your personal financial security may not be as strong as it should be. You may be more vulnerable than you think. I called a client yesterday to review his portfolio and his wife quickly said he’d have to call me back because the police were at the house. He was filing a report because his debit card had been compromised. It turns out that over the weekend a waiter had held the card longer than normal (obvious after the fact) and had used the card numbers to make purchases online. Thankfully their bank was able to notify them and quickly canceled the card. I’m sure many of you have been in a … [Read more...]

Your World Drowning in Easy Money

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You know something’s amiss when the Fed pumps $85 billion a month into the system. The Fed’s balance sheet has ballooned to $3.85 trillion. What’s missed by the media is that 60% of the Fed’s balance sheet is excess reserves or $2.3 trillion—money that banks keep on deposit at the Fed. Banks currently earn 0.25% from the Fed, which is actually paid by you and me the taxpayer. This is simply a ripple now, but wait until interest rates go up. The cost to taxpayers could be catastrophic. “A return to even a normal 2% rate on excess reserves of $2.3 trillion would cost U.S. taxpayers $46 billion. … [Read more...]

Quantum Dawn 2

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Over the Summer some Wall Street banks ran a crisis scenario in which "bank executives in charge of operations, technology and crisis planning were tasked with detecting how a massive cyber attack was unfolding in the markets - but each one only got to see a tiny red flag waving in a sea of information," Reuters reports. For years we've been recommending Fidelity Investments as a custodian for investor money. For my money no financial institution does technology better than Fidelity Investments. And that would include preparations against cyber attacks. If you don't already have an account … [Read more...]

Collecting Rare and Hard to Find Dividends

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Your key to surviving market volatility is to make sure you have dividend paying stocks. With dividends you’re a winner each and every year. As a dividend-centric investor your goal isn't to sell stocks at a higher price. It is to hold onto stocks that pay you a rich dividend. As you can see in this chart, losing money can happen literally overnight. Most investors get out at the wrong time—on the way down. But when you invest for dividends you’re not a seller or a buyer—you’re a collector. And collecting rare and hard to find dividends turns out to be quite fun. As you can see from the chart … [Read more...]

5,000 Jokers

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You deserve the peace of mind and comfort that a trustworthy investment advisor brings to you. Unfortunately the investment business is loaded with scammers and crooks. Even when brokers are expelled from a firm they can somehow find work in the same industry. That was the case with Kenneth Dwyer who lost more than $85 million for his investors. “Mr. Dwyer is one of more than 5,000 brokers who were still licensed to sell securities earlier this year after working for one or more firms that regulators expelled between 2005 and 2012, according to an analysis by The Wall Street Journal of a … [Read more...]

The Energy Evolution

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The "Estimated Energy Costs per Million BTUs" chart from Young Research & Publishing gives you a quick comparison of oil, natural gas, coal, and uranium. As you can see, natural gas offers good value compared to oil. Over time good ideas will find their way in the marketplace at the right price and tend to evolve over time rather than an overnight revolution. Cheap natural gas will find a home. Kinder Morgan is expanding its pipelines into Mexico. Don't speculate on short-term natural gas prices but do understand the unique long-term value it offers today to companies that move it. … [Read more...]

Dividend Paying Stocks and Taxes

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This year the tax on dividend paying stocks for the highest wage earners, thanks to Obamacare, is 23.8%. One way to avoid this tax altogether is to invest in dividend paying stocks in your tax deferred accounts. If you have a 401k collecting dust in a corporate account somewhere then now is the time to do an IRA Rollover to Fidelity or Vanguard. Don’t let inertia get the better of you. Set-up a brokerage account and construct a portfolio of high yielding dividend paying stocks tax-free. If your investable assets are around $2 million and want to speak with me directly about how to do this, … [Read more...]