POCKETBOOK:Week ending Sept.24,2016

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October:Scary or not so much?

With September nearly over and the month that celebrates All Hallows Eve right around the corner, investors could be in for a treat.

As fate would have it, well really history, ever since 1987 the S&P500 Index has averaged a 1.8% gain during the month of October, according to Dan Wiener, editor of Fund Focus Weekly.

That’s not so bad considering there isn’t a financial commentator around who can’t help telling the investing public that the month of October has historically been fraught with market downturns. It is, after all, the month the DJIA fell 22.6% on a day now remembered as Black Monday.

But look back and  count and Wiener writes that over the past 28 October’s, 19 of them—68%–have rewarded investors with positive results.

Boo!

  • Market Quick Glance

Lookie here: At the close of business on Friday, Sept 23, 2016, all four indices had better performance records than the week before with the Russell 2000 and Nasdaq’s year-to-date weekly returns gaining the most. And, the 1-yr  year-to-date return for the Russell 2000 moved from a positive 6.9% up to 13.45%.

Below, according to Bloomberg, are last week’s closing YTD performance numbers of four popular US indices along with 1-year performance figures.

-Indices:

-Dow Jones +6.94% YTD

  • 1yr Rtn +14.96%

-S&P 500 +7.63% YTD

  • 1yr Rtn +14.57%

NASDAQ +7.01% YTD

  • 1yr Rtn +14.76%

Russell 2000 +11.64% YTD

  • 1yr Rtn +13.45%

 

-Mutual funds

Year-to-date average returns for U.S. Diversified Equity funds gained a bit over the past week as, at the close of business on Thursday, September 22, 2016, their average YTD return was 6.79%, according to Lipper. That’s a gain of more than 175 basis points from the previous week’s figures.

Under the heading of  U.S. Diversified Equity Funds, Equity Leverage Funds had a YTD performance average of +25.27%. Dedicated Short Bias Funds, on the other hand, had an average YTD average return of -23.26%.

Precious Metals Equity Funds, Lipper tracks 73 of them, were now up on average over 100% YTD at 107.93%.

World Equity Funds continued to gain strength providing their shareholders with an average return of 7.74%. Latin American Funds also continued their move upward with average YTD returns of 35.19%.

Make sure to take advantage of the wonderful world of mutual fund performance figures that Lipper publishes weekly. Use their YTD returns as a guideline for how your individual fund(s) are performing. For instance, Lipper reports the average stock fund is up about 6.79 percent so far this year. Are your stock funds doing better or worse than that?

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • Listen up market worriers: Elections don’t matter much

According to Ric Edelman, former CEO of Edelman Financial Services, worrying about whether Clinton or Trump makes it into the White House isn’t likely to wreck your investment portfolio unless…..

“History is very clear on this point,” Edelman said in an interview with ETF.com. “Going back to 1948, the impact of every president on the financial markets is very clear. Presidents do not adversely affect the markets.”

The “unless” is if we are in a recession. Or, you won’t need your money for four to eight years. That’s the longest a president can remain in office.

Investors during the Nixon and Bush years, realized the pain that recessions can impose upon one’s investment portfolio.

Guess that means that going forward the big question all investors are faced with is: Is there a recession in our future? And if you think so, the next question is: Can you personally afford any market losses?

And so— without a clear cut answer in site—it goes…..

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POCKETBOOK:Week ending Sept.17,2016

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  • Guns and suicides

Where ever you stand on gun control, there is no denying the fact that guns kill. It’s like the reason they were created.

On that note, from Bloomberg.com comes this:

” The Centers for Disease Control and Prevention says there are about 11,000 firearm homicides a year and some 21,000 firearm suicides. In terms of sheer mortality, gun suicide is a bigger problem than gun homicide.”

  • Market Quick Glance

At the close of business on Friday, Sept 16, 2016, all four indices had performed better than the week before with Nasdaq gaining the most.

According to Bloomberg, below are last week’s closing YTD performance numbers of four popular US indices along with 1-year performance figures.

-Indices:

-Dow Jones +6.13% YTD

  • 1yr Rtn +13.61%

-S&P 500 +6.34% YTD

  • 1yr Rtn +11.67%

NASDAQ +5.77% YTD

  • 1yr Rtn +10.12%

Russell 2000 +8.96% YTD

  • 1yr Rtn +6.90%

 

-Mutual funds

At the close of business on Thursday, September 15, 2016, the average YTD return of U.S.Diversified Equity Funds had lost ground from the previous week and ended the week +4.97%, according to Lipper.

Look back over the past year and the average total 52- week YTD return was 4.09%.

World Equity Funds, on average, are up 5.22%.  Latin American Funds lead the way, up 30.97% on average, followed by Emerging Markets Funds, up 12.38% and then India Region Funds, up 11.20%.

Slide into income and World Income Funds, Lipper tracks 802 of them, were up on average 9.55%.

Wondering how best to use Lipper’s fund performance figures? Use their YTD returns as a guideline for how your individual fund(s) are performing. For instance, the average stock fund is up about 6.5 percent so far this year. Are your stock funds doing better or worse than that?

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • Dubious Dividends

I’m a big fan of stocks that pay dividends to their shareholders. Invest in companies that have a long history of paying them and this old-fashioned widows-and-orphans kind of investment strategy can reward shareholders handsomely.

But dividends don’t come with guarantees. The companies that pay them aren’t required to make that promise. And, can change their mind about how much gets paid at any time.

That’s something to keep in mind when hunting for dividend paying stocks to purchase.

Louis Navellier brought that point home in a current email in which he wrote: “Of the 1,500 dividend paying stocks in the market, a unbelievable 313 companies cut their dividends in the first half of 2016. That’s 1 out of every 5 dividend stocks CUTTING their dividend….”

This money pro is anticipating more cuts from dividend paying companies this year. Including companies included in  ETFs and  REITs .

So what can you do if you’re a divie investor?

In a word “homework.”

The dividend investing strategy remains to be a sound one but learning as much as you can about the company that pays the dividend, its history of dividend payment, current financial picture and future growth prospects all need to be reviewed and considered.

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POCKETBOOK:Week ending Sept.10,2016

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  • Well this ain’t pretty

Debt is something our nation is no stranger to. Neither are many of its citizens. And, like you, I know that debt isn’t always a horrible 4-letter word. It has its valid and good reasons for being. And then there is the other side.

On the not-so-hot side,  our nation debt it is getting close to $19.5 trillion. And, according to MyBudget360.com, “The U.S. nation debt is more than all the world’s physical cash, gold, silver and bitcoin combined.”

That’s a lot

  • Market Quick Glance

So, last week I wrote:” I don’t recall any talking heads who said they expected 1-year returns on equities to be in the mid- to high-double digits this year…”

And, “If stock indices are an indication of the state of our economy—there’s no room for any investors to complain about America not being great—-it has been for investors year-to-date and over the past year.”

And this week I get to eat some of those words thanks to market reversing its hotsy-totsy performance record with the year-to-date and 1-year return for Dow, S&P500, Nasdaq and the Russell 2000 all closing off from the prior week’s close.

At the close of business on Friday, Sept 9, 2016, all four indices closed lower than they had the previous week, according to Bloomberg. Below are the closing YTD performance numbers of four popular US indices along with their 1-year performance figures.

-Indices:

-Dow Jones +5.87% YTD (Down 3% from last week’s YTD close of 8.19%)

  • 1yr Rtn +13.00% (Down 4.94% in one week)

-S&P 500 +5.72% YTD (Down from last week’s 8.27% YTD figure)

  • 1yr Rtn +10.88% (Down over 5%)

NASDAQ +3.35% YTD (Down from last week’s 5.84 % YTD)

  • 1yr Rtn +7.74% (Clipped by more than 6% from last week’s 13.61%)

Russell 2000 +8.42% YTD (Down about 3%)

  • 1yr Rtn +6.90%(Off more than 5% from last week’s 11.86%)

-Mutual funds

In mutual fund land the picture is a bit different. But that’s because of the day fund returns are calculated.

If you’ve noticed, Lipper bases its performance figures on returns collected at the close of business on Thursday’s. (I think that calculation day all started because Lipper wanted to make sure the numbers made it into Friday’s papers.)

So, because Lipper’s figures missed  Friday’s big-time  down turn, their numbers are better than one might otherwise expect had they been based on the Sept.9 closing prices.

That said, at the close of business on Thursday, September 8, 2016, the average YTD return of U.S.Diversified Equity Funds was +7.01% according to Lipper. That’s up from last week’s 6.17%.

That figure represents the average YTD return on 8,390 different equity funds that fall under 20 different fund types  including  an assortment of large-cap, small-cap, mid-cap, speciality, alternative, S&P500 etc. funds.

Precious Metals Equity Funds picked up ground over the week with year-to-date average returns now standing at 109.43% —that’s up from last week’s average fund return of 95.70%.

Lipper’s Sector Equity Funds, where Precious Metals funds live, also gained ground. At the close of business on Thursday the average fund under this heading it was up 11.72%.

Domestic L-T Fixed Income Funds were up on average a tad more at 6.23%. World Income Funds gained over 1% with an average YTD return of 11.06%.

Wondering how best to use Lipper’s fund performance figures? Use their YTD returns as a guideline for how your individual fund(s) are performing. For instance, the average stock fund is up about 6.5 percent so far this year. Are your stock funds doing better or worse than that?

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • One money guy’s point of view

Peter Schiff’s EuroPac International Value Fund (EPIVX) is up over 30% as of August 31, 2016, according to Morningstar. The reason for the handsome returns are in part due to gold’s gains. And, investments in places like New Zealand, Switzerland, Singapore and Australia, according to a CNBC.com recent story.

Schiff said he likes investing in countries in that part of the world because they don’t have much exposure to the United States.

From the CNBC.com story, “Why Peter Schiff’s international fund is up over 35% year-to-date” by Bryan Borzykowski, comes this: “The U.S. consumer…is living on credit, has no savings, and the whole economy is headed for collapse, and I want protection against that. I‘m tryin to invest in markets and companies that are best positioned to do well in an environment where the U.S. economy is not doing well.”

Okay.

But before running out and investing in the fund keep in mind that —-whether you buy Schiff’s thinking or not— last year the fund was down 26.31%, according to Morningstar.

And so it goes…

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POCKETBOOK:Week ending Sept. 3, 2016

IMG_0204•Labor Realities

I remember when a goodly number of stores were closed in celebration of Labor Day. Of course, that was decades ago and in the last generation. Today, more people than ever work on this national holiday. Bummer.

I also remember when government figures weren’t quite so confusing. The G-man’s figures didn’t appear to have the need to be sliced and diced as they currently are. Or, updated as frequently.

But there are many more of us today than there were decades ago and as a result, government facts and figures aren’t what they used to be.

As a result, anyone wanting to get a handle on how many people are working—or not working — todayyou’ve got to look beyond the first paragraph of any copy addressing that subject.

For example, on Friday the Labor Department reported that the unemployment rate remained at 4.9 percent in August. But that’s the U-3 number (metrics that show the state of jobs), according to CNBC.com.

But wait—there’s more: A broader definition of the unemployment rate is called the U-6 rate. At the end of August is stood at 9.7 percent.

Go figure.

  • Market Quick Glance

The stock market was showing its stuff as of the close of business on Friday, Sept 2, 2016. All four of the indices below closed higher than they had the previous week, according to Bloomberg. Perhaps performance was in celebration of the anticipated Labor Day weekend. Maybe not.

Whatever. If stock indices are an indication of the state of our economy—there’s no room for any investors to complain about America not being great—-it has been for investors year-to-date and over the past year.

On that note, I don’t recall any talking heads who said they expected 1-year returns on equities to be in the mid- to high-double digits this year. But, that’s where they stood as of September 2nd, as you will see in the following numbers.

Below are the closing YTD performance numbers of four popular US indices along with their 1-year performance figures.

-Indices:

-Dow Jones +8.19% YTD

  • 1yr Rtn +17.94%

-S&P 500 +8.27% YTD

  • 1yr Rtn +15.98%

NASDAQ +5.84% YTD

  • 1yr Rtn +13.61%

Russell 2000 +11.29 %

  • 1yr Rtn +11.86%

-Mutual funds

At the close of business on Thursday, September 1, 2016, the average YTD return of U.S.Diversified Equity Funds was +6.17%,according to Lipper.

On their continued slide downwards, the average YTD return on Precious Metals Equity Funds fell under 100% to 95.70%.

Lipper’s Sector Equity Funds, where you will find the Precious Metals heading, also continued to lose ground. At the close of business on Thursday the average fund under this heading it was up 11.72%.

Domestic L-T Fixed Income Funds were up, on average, 6.16%. And World Income Funds up over 10% at 10.04%.

Wondering how best to use Lipper’s fund performance figures? Use their YTD returns as a guideline for how your individual fund(s) are performing. For instance, the average stock fund is up about 6.5 percent so far this year. Are your stock funds doing better or worse than that?

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • How to Negotiate

Working or not, every one of us will need to negotiate our way into something—or out of something—at some point during our lives.

According to Ken Marlin, a Marine, executive and author, you can’t win in a negotiation unless you are willing to walk away and call the whole thing off. You’ve also got to be willing to tell the truth.

Those are two of Marlin’s nine negotiation rules from his new book, The Marine Corps Way to Win on Wall Street: 11 Key Principles from Battlefield to Boardroom.

In a nutshell, here are Marlin’s nine rules of negotiations from the chapter “Negotiate from the High Ground” in his book:

9 Negotiation Rules from Ken Marlin

Rule 1: Be prepared to walk away from the table.

Rule 2: Know where you are going.

Rule 3: Recognize when you have leverage—and when you don’t.

Rule 4: Tell the truth.

Rule 5: Remember the peace.

Rule 6: Negotiate big things before little things.

Rule 7: Don’t bully.

Rule 8: It is personal.

Rule 9: Take reasonable, defensible positions.

(Full disclosure: I have not read Marlin’s book. Found the negotiating tips on a blog and  thought they  were worth sharing.)

 

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New Book: Protecting Your Principle and the Coming Crash

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David J. Scranton talks about his new book “Return on Principle” to an audience at the book’s  launch in Ft.Lauderdale in late August.

David J. Scranton is on a mission. The seasoned market analyst and financial advisor’s recently published book has a title that says it all: “Return on Principle: Seven Core Values to Protect your Money in Good Times and Bad.” And, the book lives up to its promise.

No stranger to the financial arena, you’ll find 17 letters following Scranton’s name –CLU, ChFC, CFA, CFP and MSFS. But what you might not know, is that he also has a degree in mathematics. Add that extra bonus bit of education into the fold and it likely has given this investment pro a leg-up when it comes to analyzing and understanding the markets, corporate America and the ins and outs of the numerous products offered investors.

During his career spanning more than 30 years, Scranton has been recognized as a respected market analyst and is a frequent guest on a broad array of national TV business programs. Additionally, he is the founder of Sound Income Strategies, a registered investment advisory firm, and Advisors’ Academy, training and marketing organization for financial advisors.

More importantly, as one of the guests at his recent book launch in Fort Lauderdale, said, “ David knows his stuff plus he’s a nice guy.”

What follows is a Q&A with Scranton gleaned from a recent telephone conversation about his book:

Q: Your book speaks to the notion of investing the “old-fashioned way.” What do you mean by that?

Scranton: Years ago when people were approaching retirement, everyone knew that they had to invest for income.

But, during the 1980s and 1990s, people got away from that and started thinking they could spend their principle, sell some of their stock shares thinking that any principle lost would just grow back the next year. In the ‘80s and ‘90s that actually worked. But since the year 2000, the stock market hasn’t cooperated.

So going back to the “old-fashioned way” is really investing for interest and dividends. And, by the way, if today someone doesn’t need income yet, they can grow their money the old-fashioned way— or organically— by the reinvestment of those interest and dividends.

Q: Also suggested was the “overprotection” of money. What does that mean?

Scranton: Well, l the reason I’m a big fan of overprotection is because most people don’t realize that if you lose 50 percent (of your money) you need to make 100 percent to get back to even again.

That’s a roller coaster ride that people have been through twice since the turn of the century. So especially for those of the Income Generation, those over 50 and born before 1956, their first focus has to be overprotection. And, making sure they don’t take those major losses particularly in the 10 years before they retire and the 10 years that follow retiring.

Q: But everyone makes investment mistakes and there is no controlling the markets. So how is someone supposed to not make any mistakes or have losses?

Scranton: You (investors) have to try to minimize their mistakes at those times.

Here’s an example I always use to explain that: In Connecticut, everyone is a UCONN girl’s basketball fan. That’s because the team has been so strong and there have been so many games when the girls were up 30 points with 3 minutes left in the game.

Well, at that point, it’s no longer about (playing) offence. It’s about defense. Not turning over the ball, not making any mistakes, running out the clock because you already have enough points to win the game.

So the idea is to get yourself set up about 10 years before retirement so that you know that you are going to have enough points to win the game of life, without any heroics. Or have to go out and hit a home run (in the market) in order to be able to retire 10years down the road.

Q: How many people are able to do that before they are age 50-something or 10 years before retirement?

Scranton: Unfortunately, not enough. But what I will tell you is that the people that aren’t in that financial position by then, typically don’t get there in the next 10 years by trying to swing from the fences and hit a home run.

You can compound one mistake with another mistake by trying to do that (hit a home run).

Q: You write about a coming market crash. Do you expect that?

Scranton: Absolutely.

Here’s why in a nutshell: In 2013, the market finally broke above the levels that it established in 2000 and 2007. And between 2000 and 2007 we had the first major drop and recovery and then from 2007 to 2013 we had the second. And in 2013 the market broke through that partial black ceiling, if you will.

So the question is, is this a permanent break above that level or will we go back down below those 2000 or 2007 and 2013 levels?

Well, here is the bottom line: If it is a permanent break above that level, and if we do not end up going below that level again we will literally be breaking three world records regarding the market.

Number 1: And a lot of people don’t know this exactly, it will be the first time we have recovered from what’s known as a secular bear market in only 13 years. That’s never happened before.

Number 2: It will be the first time we have recovered from a secular bear market without having three or more major drops in the middle of it. Usually there are three, four, five or six drops. This time we only had two major drops in the middle of it; one was when the tech bubble burst and the second was the financial crisis.

Number 3: It will be the first time ever that we have recovered from a secular bear market before the price to earnings (ratio) on the overall stock market got down into the signal digits.

Q: So what are investors, including those of the Income Generation, to do?

Scranton: Understand you own (investing) strengths and weaknesses.

For example, if you’re going to be a stock market investor, and you know you are fear based, and you know that as soon as the market drops you are going to panic and get out and sell when its low, you know that’s a limitation of yours and you shouldn’t be investing in the stock market by yourself. Get the help of an advisor.

But not all financial advisors are the same. That’s why, in the book, I have questions for the reader to ask their advisor to make sure the advisor’s specialty matches their (the investor’s) needs and stage of life. And, are appropriate for them.

Investors need to realize that there is no Hippocratic oath for financial advisors, so they have to dig to find the right one for them.

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POCKETBOOK:Week ending Aug.27,2016

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•A rate hike is coming. A rate hike is coming. A rate hike is coming. Big deal!

With all the talk about Janet Yellen and the if-she, won’t-she, when-will-she gives the signal that begin moving interest rates up, you’d think the increase was going to be a leap of many percentage points. But you’d be wrong. It won’t be.

Whether interest rates are increased in September or December, two, three or four times during the rest of this year, they won’t be hiked up by much. Don’t expect more than one-quarter of 1% or one-half percent of 1% increase if there are any increases at all.

Even if rates were to rise  by a full 1%, that’s no big deal, people. It still will keep the yields on money market funds and savings accounts miserably low. And, continue to drive folks into the stock market whether for growth opportunities or income via sound dividend-paying stocks. Or both.

So don’t let the fear of an interest rate hike keep you from taking advantage of the delightfully low interest rates one can get on things such as home and car loans. Provided, of course, you qualify. That, of course, has been the stickler for far too many.

Bottom line: Refinance if you need to, or can.

  • Market Quick Glance

As always, the market surprises us. During the week ending Friday, August 26, 2016, three of the four indices lost ground, according to Bloomberg.

Below are the closing YTD performance numbers of four popular US indices along with their 1-year performance figures.

-Indices:

-Dow Jones +7.63% YTD (Down from the previous week’s +8.45%)

  • 1yr Rtn +13.46 % (Down from +15.77%)

-S&P 500 +7.68 % YTD (Down from +8.39% YTD)

  • 1yr Rtn +11.47%(Down from from +13.27%)

NASDAQ +5.20 % YTD

  • 1yr Rtn +9.58 (Down from +12.98%)

Russell 2000 +10.03 % (UP from last week’s +9.90 % YTD)

  • 1yr Rtn +8.07%

 

-Mutual funds

At the close of business on Thursday, August 25, 2016, U.S.Diversified Equity Funds lost a bit with the average YTD performance of +6.08% for the 8,417 funds under this heading, according to Lipper.

Precious Metals Equity Funds, those gems that  have been leading the way with their soaring performance returns aren’t as hot as they have been. Now the group’s average return is only up +102.24%. Still significant and nothing to pooh-pooh.

Decades ago, the head of Oppenheimer Funds told me about an investment strategy he used. It went something like this: At the beginning of each New Year he would change the line-up of funds in his retirement account from those he had to those representing the poorest performing funds at the close of the previous year. It was a strategy he said worked well for him.

While I don’t know the specific details, I do know that one  year’s worst performing funds, fund types and various sectors frequently have turned out to be the next year’s big performance winners.

On that note, here are the poorest performing fund types under Lipper’s Sector Equity Funds the average of which is down from the previous week and currently sits at +12.51%:

-Health /Biotechnology Funds, -6.70

-Global Helth/Biotechnology Funds, -6.10

-Global Financial Services Funds, -4.08

-Speciality/Miscellaneous Funds, -0.23

There ya go. Who knows, maybe next year it will be bio-tech and banking funds that perform well. We shall see.

Wondering how best to use Lipper’s fund performance figures? Use their YTD returns as a guideline for how your individual fund(s) are performing. For instance, the average stock fund is up about 6.5 percent so far this year. Are your stock funds doing better or worse than that?

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • Got debt?

According to a Congressional Budget Office report published earlier this month that examined trends in family wealth comes this: “An increase in debt among the bottom 25 percent of families….jumped from $24,000 to $36,000 on average between 2007 and 2013.”

 

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POCKETBOOK:Week ending Aug.19,2016

  • IMG_0204Class distinctions

How much the top 1%ers are really worth is difficult to nail down. Depending up the source, time frame considered and what you’re counting—family wealth or income—the figures change. Nonetheless, that very tiny elite sliver of our society known as the 1%ers owns pretty much everything. Like an abundance of shares of stock, megamillion dollar homes, super yachts, watches worth what most of us would consider a comfortable retirement nest egg etc., etc.

With so much focus on them you’d think the other 99% of us were chopped liver. (If “chopped liver” is too politically incorrect for your taste, think “worthless” instead.) But we are not. Without us this nation wouldn’t be worth nearly what it is today.

Sticking only to dollar values—and not to what’s inside our hearts where our true and real wealth lies— below is a look at the incomes levels of the various income classes in America based on 2014 income levels from the Urban Institute, according to CNN Money.com:

-Rich, incomes, $350,000+

-Upper Middle, $100,000 to $350,000

-Middle, $50,000 to$100,000

-Lower Middle, $30,000 to $50,000

-Poor, <$30,000

 

  • Market Quick Glance

Funny thing about the indices: Sure, the year-to-date performances over the past week was good, although not much improved from the previous week. But it was the 1-year total returns when all four indices really shined. Make sure to check them out.

Below are the closing YTD performance numbers of four popular US indices as of Friday, August 19, 2016, according to Bloomberg. One-year performance figures are also included.

-Indices:

-Dow Jones +8.45% YTD

  • 1yr Rtn +15.77 ( A BIG increase here from last week’s +9.14%)

-S&P 500 + 8.39% YTD

  • 1yr Rtn +13.27 (Also a big jump up from last week +6.75%)

NASDAQ +56% YTD

  • 1yr Rtn +12.98(Yuge increase from +4.92%)

Russell 2000 +9.90 % YTD

  • 1yr Rtn +8.56 (A sweet jump up from last week’s number of +3.59%)

Here’s a little bit of performance trivia from the Bespoke Investment Group about Nasdaq: “Since the two-day 6.5% decline following the Brexit vote in late June, the Nasdaq has gone 37 trading days now without posting back to back daily declines.  In the Nasdaq’s history dating back to 1971, there have only been seven other periods where the Nasdaq went longer than 35 trading days without back to back declines and the current streak of 37 ranks as the longest since December 2004!  If the Nasdaq can go three more trading days without a two-day losing streak, it will be the longest streak since 1978!”

Bespoke published that on August 18. So we shall see….

-Mutual funds

At the close of business on Thursday, August 18, 2016, U.S.Diversified Equity Funds ended the week up a bit with the average YTD performance of +6.56% for the 8,429 funds under this heading, according to Lipper.

Here’s a look at the YTD average total return for various umbrella fund headings along with the number of funds included under each of Lipper’s headings:

-Sector Equity Funds up 14.40% (2,294 funds)

-World Income Funds up 11.18% (807 funds)

-World Equity Funds (4,445 funds)

-Mixed Asset Funds up 6.23% (5,782 funds)

-Domestic Long-Term Fixed Income Funds up 6.10% (4,027)

Wondering how best to use Lipper’s fund performance figures? Use their ytd returns as a guideline for how your individual fund(s) are performing. For instance, the average stock fund is up about 6.5 percent so far this year.

That’s pretty good especially when you compare it to the barely above 0% returns on your bank’s money market fund.

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • Presidents and job creation

Without jobs Americans suffer and so does our nation.

But there’s more to building a strong economy than jobs. Our national debts, recessions, depressions etc., all play a part

TheBalance.com recently ran an interesting article titled “Which President Created the Most Jobs?”. Not only does it address the number of jobs our presidents have created, it includes tidbits such as the debt the jobs created along with other economic and historical data.

Back to the presidents, here’s a look at our presidents, the years they were in office and the number of jobs each created:

-Bill Clinton (1993-2000) created the most number of jobs, 21.5 million jobs.

-Ronald Reagan (1981-1989) 15.9 million jobs.

-Lyndon B. Johnson (1963-1968) added 11.9 million jobs.

-Jimmy Carter added 10.5 million jobs

-Franklin Roosevelt (1933-1944) created 10.3 million jobs.

-Barack Obama (2009-2016) at the end of 2015 had created 8.3 million jobs. A somewhat skewed picture as it does not include his entire presidency or that 8.7 million jobs were lost due to the 2008 Financial Crisis.

-Richard Nixon (1969-1974) added 8.8 million jobs.

-Harry Truman (1944-1952), 8.3 million jobs.

-Dwight D. Eisenhower (1953-1960), 3.6 million jobs.

-John F. Kennedy (1961-1963), 3.6 million jobs.

-George H.W. Bush (1989-1992) added 2.6 million jobs.

-George W. Bush (2001-2008) added 2.1 million jobs. He also lost the most jobs– “ 3.6 million between January and December 2008.

-Gerald Ford (1976-1979) added 2.4 million jobs.

There is much more to this story  that’s  worth a read. You will find the entire piece at:

www.thebalance.com/job-creation-by-president-by-number-and-percent-3863218

 

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POCKETBOOK:Week ending Aug. 13, 2016

  • IMG_0204

  • It’s All About the Gold

Our USA Olympic athletes have certainly made all of us proud as the number of gold, silver and bronze medals continue to mount up–currently at 69 and likely to grow. Congrats to all who have completed in their respective competitions and good luck to those still facing challenges.

Looking only at the golden awards, 26 gold medals have been won as of this writing. And while there’s nothing quite like winning the top prize, there’s really not all that much gold in gold.

According to Good.com, “In an effort to cut down on costs, Olympic gold medals are composed of only 1.2 percent of the precious metal…”

Even at that skimpy rate, that same source reports, “A 500g medal made of pure gold would set the International Olympic Committee back a whopping $22,000 per medal. That would leave the committee with a bill of nearly $50 million – just for gold medals. “ That’s based upon a gold price of $1,343 an ounce.

CNN reports that gold medals are made of 494 grams of silver and 6 grams of gold with medal worth about $587.

And this from gold broker and blogger Dillion Gage: “The last time the Olympic Games handed out solid gold medals was a hundred years ago at the 1912 Summer Games in Stockholm, Sweden. Gold medals were in fact only gold for eight years.”

More on gold follows the “Mutual Fund” section below.

  • Market Quick Glance

Here’s something to think about before looking at the year-to-date returns of various indices: What’s up with all the talking heads referring to this market as a “boring bull market”?

Really? Boring? If you are making so much money that it’s boring, there is something very wrong with you, the way you think and your perception of investing. Count yourself fortunate and lucky to be making money. Not every investor does.

But what concerns me is the power of goofy collective thinking and the power it may–or may not–have.

I clearly remember in October of 1987, when Wall Street had a birthday party celebrating its then 5-year old bull market, that the following week Black Monday happened.

I’ve written about that before and while this time it’s no birthday celebration, it seems as though  goofy thinking  by too many can bring around goofy results.

Just sayin.

The indices all performed well last week. Below are the closing YTD performance numbers of four popular US indices as of Friday, August 12, 2016, according to Bloomberg. One-year performance figures are also included.

-Indices:

-Dow Jones +8.43% YTD

  • 1yr Rtn +9.14% (40 bps lower than last week’s +9.56%)

-S&P 500 + 8.33% YTD

  • 1yr Rtn +6.75% ( Down from+7.39%)

NASDAQ +5.13% YTD (A 2 percentage point improvement)

  • 1yr Rtn +4.92%

Russell 2000 +9.26 % YTD

  • 1yr Rtn +3.59%

-Mutual funds

At the close of business on Thursday, August 11, 2016, U.S.Diversified Equity Funds ended the week 1 percentage point stronger than the previous week at 6.33 % YTD on average, according to Lipper.

Instead of looking at the best performers in this categ0ry made up of 8,419 different funds, the three poorest performers were Dedicated Short Bias Funds down -21.57%, Alternative Long/Short Equity Funds at 1.17 % and Specialty Diversified Equity Funds with an average ytd return of 0.78 pecent.

Under the Sector Funds broad umbrella, Precious Metals Equity Funds continue to outperform but not by much: at +129.96 that’s only 70 bps higher that the previous week’s close.

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • How much gold is there anyway?

Although there is no way of knowing how high—or low—the per ounce price of gold can ever go, one expert knows that no matter  how it’s price, it’s a rare precious metal.

I’ve known Frank Holmes since the 1980s and he’s always been a gold guy.  Holmes is CEO of U.S. Global Investors and what follows is  from a recently published piece titled, “Gold is one of the rarest elements in the world, making up roughly 0.003 parts per million of the earth’s crust.”

From it: “For some perspective, one part per million, when converted into time, is equivalent to one minute in two years. Gold is even rarer than that. If we took all the gold ever mined—all 186,000 tonnes, from the bullion at Fort Knox to India’s bridal jewelry to King Tut’s burial mask—and melted it down to a 20.5 meter-sided cube, it would fit snugly within the confines of an Olympic-size swimming pool.”

That’s it.

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For majority of us there is no “Death Tax”

file0001574020129Donald Trump is at it again and doing what he does best: Misleading and scaring people.

In his economic speech on Monday, August 8, 2016, Donnie talked about the tax plans he has for America in order to make our country great again. In addition to reducing the number of income tax brackets from 7 to 3, his plan includes cutting the corporate tax rate and getting rid of the “Death Tax”.

Hear the word “death” before anything and most people begin to shiver. Remember the “death panels” the GOP’s Sarah Palin tossed around in 2009 to scare and freak out the public? I do.

So, when I heard today’s GOP presidential hopeful talk about eliminating the Death Tax, I wondered, “What Death Tax?” To be clear, anyone  who might think you or your loved ones will  face  a tax from Uncle Sam after they die—not to worry. There is no such tax.

There is, however, an estate tax that impacts individuals who die and leave the planet with assets totaling more than $5,450,000 (in 2016). That tax  has been dubbed the “Death Tax” but what it really is is a tax on your right to transfer property/assets at your death.

Furthermore, it’s a tax that impacts only a tiny sliver of the American working and tax-paying public: According to the Center for Budget and Policy Priorities, the estate tax (Death Tax) is paid by about 2 out every 1000 estates.

One of those two families  likely to be affected by the estate tax is, of course, the Trump family. It has been estimated that they would literally save billions and billions of dollars if the estate tax were to disappear. (Provided, of course, Trump has the kind of money he claims. We don’t know for sure about this because he still has refused to show America any recent tax returns.)

Back to Monday. During his economic policy speech, when Donnie said, “Finally, no family will have to pay the death tax. American workers have paid taxes their whole lives, and they should not be taxed again at death, “ he wasn’t talking to most working Americans—only the very wealthy.

Regarding  changes in the tax rates people pay on their incomes, Donnie’s proposal for working Americans with  low incomes is actually higher by 2 percent moving it from today’s current rate of 10 percent  up to 12 percent. No reduction there.

For his pals enjoying the other end of the income scale, however, it’s a different story. In his proposal, those with high incomes would see the highest income tax rate reduced from its current rate of 39.6 percent down to 35 percent.

But wait, there’s more.

Happen to have pass-through income and you’ll be skipping all the way to the bank because Mr. Trump proposes a reduction on that income from its current tax rate of 39.6 percent down to 15 percent!

Donnie’s proposals appear to be so out of touch with what’s really going on with working Americans  that they’re almost comical. And misleading. And scary.

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POCKETBOOK:Week ending Aug.6,2016

  • IMG_0204High and highs

No matter what your feelings are regarding marijuana, there’s money in pot. Just ask the state of Colorado where taxing that  industry has brought in hundreds of thousands of dollars in tax revenues.

To catch a whiff of that high, investors in shares of Scotts Miracle-Gro Co (SMG) have been rewarded as the stock closed Friday at $79.56, near its  52-week high of $80.25. That’s  up from a 52-week low of $58.83, according to Yahoo Finance.

People have been using Scotts Miracle-Gro  products  for decades for all of their gardening and grass needs. In addition to making gardens grow, SMG also pays a dividend of 2.51%—better than the  current yields on long Treasuries.

Looking ahead, the pot industry doesn’t look to be going up in smoke any time soon. Scotts knows this. And, that fertile soil isn’t the only way to grow weed. Ask any home grower and they will tell you hydroponics is the best way to go.

To that end, one company Scotts has invested in is the Netherlands-based hydroponic equipment maker Gavita Holland BV.

With marijuana legalized in some form in 24 states and DC, it will be on the ballot in November in 12  more.

Like I said, the industry isn’t going up in smoke any time soon.

  • Market Quick Glance

The bull doesn’t appear to want to lay down and take a rest just yet.

Below are the closing YTD performance numbers of four popular US indices as of Friday, August 5, 2016, according to Bloomberg. One-year performance figures are also included.

-Indices:

-Dow Jones +8.12% YTD (Back to where it was 2 weeks ago)

  • 1yr Rtn +9.56%

-S&P 500 +8.20% YTD 

  • 1yr Rtn +7.39%

NASDAQ +5.13% YTD (A 2 percentage point improvement)

  • 1yr Rtn +4.92% (Ditto)

Russell 2000 +9.35% YTD (Up 1 percentage point)

  • 1yr Rtn +3.59% (A big gain from last week’s -0.01%)

 

-Mutual funds

The average U.S.Diversified Equity Fund ended the week up a tad less than it had in the previous week and at 5.23 % as of the close of business on Thursday, August 4, 2016, according to Lipper.

Yawn. Yawn. Equity Leverage Funds gained another 2% with the average fund up 24.65%. Again it had the most positive returns in the entire  gang of U.S. Diversified Equity Funds. Dedicated Short Bias Funds performed the worst—this week down on average 19.53%.

And almost more yawns go out to Precious Metals Equity Funds as this group continues to outperform other Sector Fund types: As of Thursday’s close the average return for them  was up 126.21% YTD. The yawn, however, isn’t really justified as that’s the highest average return for this fund heading so far this year. Lucky you if you’re an investor in one of the top performing funds in this group of 73.

If you’re not, don’t dispare. The average return for all types of Sector Funds thus far this year is a +12.82 %. Double-digit returns— no matter where you get them— are always something to be proud of.

Latin American Funds continue their upward swing gaining 4% from the previous week to close up 34.09% year-to-date.

Visit www.allaboutfunds.com for weekly updates to see how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

Lipper’s weekly performance figures for stock and fixed-income funds are at www.allaboutfunds.com in the left column on the home page.

  • Negative Wealth

If you’re not familiar with the term “negative wealth” you’ve probably seen evidence of it. Or perhaps it’s a situation you’re all too familiar with. In short, it means  your debts add up to more than your assets.

According to the New York Federal Reserve, 14% of the U.S. population has negative wealth.

The particulars look like this: Negative wealth households have an average annual income of under $40,000 ($39,077); 19 percent of them own a home; and 36% of those homeowners are underwater on their mortgage payments.

Additionally, most are female, single and single parents.

On the other hand, positive wealth households have an average annual income of more than $86,309; 75% own a home; and just 4% have underwater mortgages.

The kicker is, the education level of negative and positive wealth households is pretty much the same.

Now what does that tell you?

 

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