Retired and soon-to-be-retired investors are in a tough spot. The idea of living off a fixed income is downright scary. Will the economy plunge into a recession? Will inflation continue to eat away at one’s purchasing power? You know how Your Survival Guy feels about predictions. If there’s one observation that’s true yesterday, today, and tomorrow, no matter how good the economy is or how attractive it might be, some investors always want more. They rub their hands together, wondering when their ship will come in, always feeling like we’re in a recession, and they leverage up to juice more … [Read more...]
“It’s My Job” Key West’s Farewell to Jimmy Buffett
Your Survival Guy and Gal were in Key West last weekend to confirm for New England that the sun still exists. It does. But as you snowbirds know, Florida hasn't exactly felt like Margaritaville. Which brings us to Sunday night, where we were able to find two seats for Mac McAnally's fourth and final sold-out show at the Key West Theater. Mac, as many of you Parrotheads know, was Jimmy Buffett's right-hand man on stage as a member of his Coral Reefer Band. Mac's two-man shows, with fellow Reefer and percussionist Eric Darken, have been a healing tour mixing in plenty of Buffett songs, with … [Read more...]
What We Learned from the Federal Reserve Yesterday
What we learned from the Federal Reserve yesterday was just how tightly the market holds on to every word from Fed Chairman Jerome Powell. No sooner did he alter his language on potential rate cuts and markets sold off, especially the speculative Nasdaq. Look at the long-term path of interest rates above and the DJIA, and you can see the connection between interest rates and prices. Now we’re stuck in this no man’s land where finally fixed income investors can get some interest on their savings, and sure enough, the market has a fit. Interest rates are hardly in need of a cut. … [Read more...]
Just When You Think You’re Diversified
What happens when everyone is invested in the same stuff? When you look at the S&P 500 and compare it to, say, target maturity funds or a total stock market index, there’s a ton of overlap. Just when investors think they’re diversifying, a simple look under the hood shows most engines running on the same stuff. That’s not necessarily bad, but let’s not confuse it with diversification. What is a great disservice to the average investor is they read the names of their funds and feel like they are diversified. “Hey, it’s the S&P 500,” they think. “That should be good diversification.” … [Read more...]
Time to Get Your Lazy Money Working
When you look at my charts from yesterday, now is a good time to get your fixed-income house in order. After a certain point in an investor’s life, there’s a time to recognize that, “Self, I might not want to work forever. How am I going to make ends meet?” Believe Your Survival Guy when I say retirement is a most stressful time and is in the top ten of life’s emotional events. I know this firsthand because I talk with hundreds of investors about it. There comes a point where you can’t afford to risk your net worth to 100% stocks. Not that you ever do. But at some point, you might want … [Read more...]
Three of My Favorite Charts
Your Survival Guy studies these charts daily: Action Line: Keep your eye on what’s happening, and let’s talk. Originally posted on Your Survival Guy. … [Read more...]
What if Today’s Opinions Are Wrong?
I would be surprised if the average investor understands how major securities indices are composed. Take the S&P 500, for example. It’s a market cap weighted index. What’s a market cap, and how is it calculated? It’s surprising to me how little attention this gets. Market capitalization is the value of all the shares of a company added together. The market cap of the S&P 500 is the value of all the shares of all five hundred companies added together. The companies with the biggest market caps themselves, therefore, make up a bigger part of the index’s market cap. So, when you … [Read more...]
Dow 38,000 and Beyond
Let’s not get too excited about Dow 38,000. Your Survival Guy remembers when we hit Dow 10,000 in 1999. As you can see, we crossed that bridge again and again. What’s always amazing to me is how short the average investor’s memory is (you’re not average, dear reader). Look how long it took for Dow 10,000 to gain some terra firma. Then, look at how long it took for NASDAQ. Not pretty, as an entire generation was lost to price wars—prices were stagnant. With the so-called Magnificent Seven running a third of the show for the S&P 500, let’s not forget that … [Read more...]
Is Inflation Improving? It Depends on Who You Ask
Americans have suffered through three years of Bidenflation, and by all accounts, the rate of inflation is improving. But some people, mostly those affiliated with the current administration, are taking a victory lap based mostly on the PCE price index, while other inflation measurements are still coming in at distressingly high levels. Gwynn Guilford reports for The Wall Street Journal: The core index of the Federal Reserve’s preferred inflation metric, the personal consumption expenditures price index, increased 2% from the prior quarter, the same as in the third quarter and in line with … [Read more...]
Your Own Margaritaville Is Here
A Jimmy Buffett-inspired community near Panama City Beach has been named among the nation’s best. Warren Kulo reports for AL.com: Latitude Margaritaville Watersound may have the laid-back vibe inspired by late music legend Jimmy Buffett, but the national praise the community is getting is anything but laid-back. For the second consecutive year, Latitude Margaritaville Watersound has been named one of the top 50 master-planned communities in the country by John Burns Real Estate Consulting and RCLCO Real Estate Consulting, according to the Panama City News Herald. “It certainly is … [Read more...]
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