Do you want to make decisions for your $2 million dollar portfolio based on the automated notifications coming across your mobile device? That's what UBS is hoping for, as they roll out digital advice to investors across the globe. Margot Patrick reports for The Wall Street Journal: UBS Group AG UBS +0.29% doubled profit in its U.S. wealth business over the past five years by wooing rich families with white-glove service. For its next act, it is going after the not-as-rich with cheaper digital advice. The Swiss bank bills itself as one of the world’s largest wealth managers, with access to … [Read more...]
TOP HEAVY: Focus on Big Indexing Could Cause Market Chaos
Originally posted on December 14, 2021. In an excellent review of a festering problem in the market today, Randall Smith of The Wall Street Journal, outlines the $1.3 trillion Vanguard Total Stock Market Index Fund (VTI), and the growing importance of the CRSP U.S. Total Market Index to the future of markets. What’s concerning to Your Survival Guy is that the top 10 companies of the CRSP U.S. Total Market Index comprise a quarter of its value. Does anyone remember the plight of the Nifty 50 in the 70s? When people fell out of love with the Fifty, the S&P crashed 48.2% from early … [Read more...]
Apple: Market Thinks Big is Beautiful…For Now
Yesterday, Apple surpassed $3 trillion in market cap. That’s a lot of iPhones. Did you know that with $3 trillion you could own ALL of McDonald’s, Walmart, AT&T, Philip Morris, Berkshire Hathaway, Procter & Gamble, JPMorgan Chase, Starbucks, Boeing, Deere, and American Express combined? Notes Spencer Jakab in The Wall Street Journal’s “Heard on the Street” column, “A lot would have to go wrong all at once to torpedo that diversified group of blue-chip stocks.” Spencer continues: Aside from the concentration risk, the rise of mega companies has been bad for stock returns in general. … [Read more...]
STEADY YOURSELF: When Bad Stuff Happens, Do This
One of my favorite investing quotes is from the late, great Jack Bogle, founder of Vanguard and creator of the index fund. In good times and, especially in bad, I love this quote. You know from my piece yesterday that investors have a way of doing the opposite of what they should. For example, when you’re unloading the groceries, and a dozen eggs fall to the floor, you might hear, “Don’t just stand there, do something!” The same reaction occurs when bad stuff happens to the stock market. This is when questions are asked, “Did you see the market today? How’s our money doing?” Bogle knew … [Read more...]
If It Ain’t Broke Don’t Try and Fix It
You and me? We’re the same. We’re simple people. We like simple quotes that wrap up life in a tidy package with a red ribbon. Here’s a couple of quotes I’m thinking about this morning. “If it’s too good to be true, then it probably is,” and, “If it ain’t broke, don’t fix it.” Simple. Concise. Easy to understand. Why, then, for cryin’ out loud, do investors mess with these truisms, and make a mess of their life’s savings? I’ll try and explain. Let’s start with the first one. Real easy. Say it out loud with me, replacing “it” with “an investment(’s).” Here we go, “If it’s too good to be true, … [Read more...]
NO MATTER WHAT: You Need to Get Paid
Let’s stay on the subject of making sure you get paid in times of trouble no matter what, just like Tony Soprano. Because any time you invest, you’re using your own money to create interest, dividends, or rent, and preferably all three. I’m not interested in price increases and selling assets. I want you to think like an owner of a multitude of assets. I remember my dad telling me how, as a teenager, he would collect for his dad’s rental properties. Some of them were in rougher neighborhoods, and his dad would tell him: “You stand to the side of the door when you knock. You never know … [Read more...]
YOUR SURVIVAL GUY WARNING: Deadliest Markets This Century
Action Line: Central banks the world over talk about “soft” landings. Listen, I’m not a pilot, I’m Your Survival Guy, government has a history of screwing up landings and cleaning up the wreckage after the crash. I’m not in the prediction business. Prices are what they are. They can go as high as someone else is willing to pay. Prices are essentially a qualitative event. I want you focused on the quantitative. In other words, I want you to get cold hard cash in the form of dividends to be “invested” in the chaos. … [Read more...]
January RAGE Gauge: Free Money for All, and to All a Good Night
Let the parties continue, because the punch bowl is still flowing. Yesterday, when the Fed announced a tighter monetary policy—an end to bond purchases and three rate increases—markets cheered. Because halting asset purchases and raising rates a whopping three times is like moving a few ornaments on your Christmas tree. It’s all for show. And just like the “Jingle Bells” refrain, the Fed’s just another reindeer pulling Biden’s sleigh. It’s free money for all, and to all, a good night. What could possibly go wrong? For serious Americans like you—the savers, entrepreneurs, small business … [Read more...]
Dreaming of Bitcoin in Your Stocking this Christmas Season?
You’re asking me about Bitcoin. I get it. With all the mad money created by the Fed, inflation running hot, and a supply chain rusting away, you want to know my thoughts on Bitcoin. As I’ve written to you before, I’m not buying it. Does that mean I don’t believe in the science? No, not necessarily. I just don’t need to be the first one to find out if it’s wrong. Let me explain. One of the hardest parts about investing is being human. We get excited about stuff. We don’t like to feel like we’re “missing the boat.” That eats us alive inside. It’s nearly impossible to get it out of your mind … [Read more...]
CALLED OUT: Omicron Variant Panic Puts Investors in a Corner
For those of you still working off Thanksgiving dinner, you may have missed the 900-plus-point drop in the Dow Jones Industrial Average. Unfortunately, for some, the decline forced investors to sell their own shares because of margin calls. As the WSJ reports: Markets sold off worldwide on Friday after South Africa raised alarm about the new “variant of concern” that the World Health Organization named Omicron. The panic may be driven more by the fear of new government lockdowns and social distancing than by the variant itself. The Dow fell 2.5% while U.S. crude prices tumbled 13% as the … [Read more...]
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