Young Research & Publishing Inc.

Investment Research Since 1978

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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...]

Serious Problems Seen in Monetary Policy Pullback

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In a speech at the Bank of Mexico, BIS General Manager Jaime Caruana flashes major warnings about central bank independence and the effectiveness of emergency techniques that are being used to prop up the economies of the world. In his speech, Caruana attempted to outline the magnitude of the interventions undertaken by the world’s central banks since 2007 saying “Since late 2007, central bank total assets in the major advanced economies have more than doubled to exceed $9 trillion, more than a quarter of GDP. And the maturity of these assets has lengthened. Prolonged interventions of this … [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...]

Economic Optimism Plunges

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A monthly poll of economic optimism conducted by Investor’s Business Daily and TIPP, the polling arm of TechnoMetrica Market Intelligence, has signaled pessimism since October of 2012. The most recent release though was cause for concern. Any response below 50 signal’s pessimism and the most recent came in at 38.4, the fourth lowest ever. And today, the University of Michigan Consumer Sentiment survey was released. The survey continued its three month plunge as Americans became even less enthusiastic about their situation. It’s hard to imagine the economic momentum picking up if … [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...]

“Don’t Fight the Fed.” All the Time?

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Don't fight the Fed is the mantra of many investors today, but don't fight the Fed is a dangerous strategy late in an economic cycle. In January of 2001 the Fed started reducing rates to head off recession. If you had started buying then based on the Fed’s loose policy, you watched the value of your portfolio collapse by 40% over the course of 21 months before the market finally turned in your favor. The same thing happened in September of 2007 when the Fed decided to cut. If you happily took the signal of the Fed’s cut to indicate a time to buy, you would have been buying through 50% … [Read more...]

Don’t Forget to Turn the Lights Off Before You Leave

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Visitors of the Bureau of Economic Analysis homepage today were puzzled to find that before staffers had gone home for the government shutdown, they actually shut down the BEA web site. Below is a picture of what you will find if you visit the site with Internet Explorer. Google Chrome returns a message that reads "Oops! Google Chrome could not connect to bea.gov." If you run a web site, or have any common sense, you'll realize that the default option for web sites is on. Actively intervening to take down a web site before the government shuts down seems unneeded. Now no one can access … [Read more...]