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

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  • 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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POCKETBOOK:Week ending July 30,2016

  • IMG_0204•The wealthy and Social Security

Everybody loves getting their much-earned Social Security checks. Even those with loads of money depend on them.

A research study from the Spectrem Group, Social Security: When and Why, of 634 affluent American investors age 55 and over, 18 percent of those currently receiving benefits rely on the checks for at least half of their income, according to a recent story at WealthManagement.com.

The study divided the group into three wealth segments:: Mass Affluent (with investable assets of between $100,000 – $999,999); Millionaire ($1 million – $4.99 million); and Ultra High Net Worth ($5 million – $25 million).

From the  July 26  story “The Wealthy Rely on Social Security Benefits Too” comes this: “Fifty-one percent of the affluent individuals surveyed currently receive at least 25 percent of their retirement income by way of Social Security benefits. This figure includes nearly one-third (29 percent) of ultra high net worth respondents, the wealthiest group surveyed by a significant margin, for whom you’d think Social Security would represent merely a drop in the bucket. Apparently you’d be wrong.”

  • Market Quick Glance

A bit of  a pull-back  based on the weekly closing YTD performance numbers of four popular US indices as of Friday, July 29, 2016, according to Bloomberg. One-year performance figures  also included.

Looking ahead, August, as a stand alone month, has not rewarded investors very much if a 20-year history is any guide. According to a number of sources, it  has been the worst performing month of the 12 that make up a year.

But when it comes to historic returns, nothing is ever as simple as it first appears. According to Bespoke, yes, the average loss for the Dow during the month of August is a decline of 1.3 %, but 55% of the time the Dow ended on a positive note.

-Indices:

-Dow Jones +7.38% YTD (Down a bit)

  • 1yr Rtn +7.01% (Ditto)

-S&P 500 +7.66% YTD (Down a bit)

  • 1yr Rtn +5.60% (Ditto)

NASDAQ +3.87% YTD (An improvement)

  • 1yr Rtn +2.02% (Also improved)

Russell 2000 +8.31% YTD (Up a bit)

  • 1yr Rtn -0.01% (Down a bit)

-Mutual funds

The average U.S.Diversified Equity Fund ended the week up 5.52 % at  the close of business on Thursday, July 28, 2016, according to Lipper.

Equity Leverage Funds continued to pick up steam gaining more than 2% during the week to close at +22.82% on average. Dedicated Short Bias Funds performed the poorest, down on average 19.29%.

Precious Metals Equity Funds picked up a bit. Thursday’s close showed the average return for this group up 7% from the previous week and atmore at 116.17% YTD.

Latin American Funds are also making their investors smile: up 30.5% year-to-date on average.

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.

  • August, September and October

Anyone living in South Florida is well aware that August and September are often the hottest months of the year. Throw in the month of October and when comes to hurricanes, it’s within those three months when most cyclones have occurred in the hot and sweaty Sunshine State.

Also not to be overlooked is the historical fact the during the months of August and September the markets have a higher rate of market corrections. Throw in October, and according to SeekingAlpha contributor Lance Roberts, “ We are about to step into a seasonality ditch: lowest 3-month returns Aug-Oct for S&P going back to 1928.”

Prepare for the heat.

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POCKETBOOK: Week ending July 23, 2016

IMG_0204•What you need to know about airplane food

I probably should have shared this with you at the beginning of summer. My bad. But this little morsel of info may serve you well the next time you dine inflight.

There’s a reason why airplane food tastes so dull, crappy, bland, ishy. etc. Turns out it’s not the food’s fault. It’s our taste buds—they don’t work well when flying.

“We’ve done a huge amount of work over the last 18 months on what happens to your taste at altitude, and typically you lose 33 percent of your ability to taste,” explained Sinead Ferguson, Menu Design Manager for British Airways. Apparently, the pressurized cabin, colder air and the dryness we all feel when flying makes our taste buds go numb. Who knew?

To solve this tasteless problem airline food sceintists—along with tv chefs and anyone in the food prep world— are now thinking umami when creating menus.

Umami is one of those things that’s hard to define as it isn’t a bean or seed or anything you can pick up at Whole Foods. It’s a category of taste just as salty, sweet, sour and bitter are. It happens as a result of combining the right amount of this  with the right amount of that.

According to Ferguson, umami is “found naturally in ingredients such as Parmesan, mushrooms, tomatoes, certain fish, seaweed, and we try to incorporate a lot of those ingredients in our foods.”

So the next time you fly, order something that includes goat cheese in it. It’s umamilious.

  • Market Quick Glance

It was a week of gains for the indices— particularly for 1-year returns.

Below are the closing YTD performance numbers of four popular US indices as of Friday, July 22, 2016, according to Bloomberg. One-year performance figures are also included.

While there are plenty of pros saying that there’s a bear dressed in bull market clothing running around on Wall Street, the only thing that really matters—and that ever matters—is how your individual investments are working for you.

Keeping your eyes focused on those results is what’s important.

-Indices:

-Dow Jones +8.18% YTD

  • 1yr Rtn +8.56% (That represents a 1-yr return gain of 3.4%)

-S&P 500 +7.72% YTD

  • 1yr Rtn +6.91% (Up for the year over 3% from last wee’s 3.91%.)

NASDAQ +2.61% YTD (An improvement of about 1.5%)

  • 1yr Rtn +1.59% (The 1-yr return moved from – into + territory.)

Russell 2000 +7.67% YTD

  • 1yr Rtn +0.45% (A big gain from last week’s -3.42% return.)

-Mutual funds

The average U.S.Diversified Equity Fund ended the week up a hair over last week’s YTD return. Through Thursday, July 21, 2016 the average U.S.Diversified Equity Fund ended the week up 4.9%, according to Lipper. That’s a gain of less than one-half of 1%, as in 0.4%.

Under this umbrella heading it was Equity Leverage Funds that rewarded shareholders the most, up 20.30% on average. And, Dedicated Short Bias Funds that took the most from them; they were down on average 18.98%.

Not surprising, Precious Metals Equity Funds have lost some steam. Thursday’s close showed the average return for this group was up only 109% YTD. That’s off from last week’s average YTD return of 120.25%.

Looking at fix-income returns, for a change, the year-to-date return for Short/Intermediate US Government & Treasury funds was a positive 3.86%.  Lipper tracks 467 funds under that heading. During the 1-week period begining  July 14 and ending July 21, 2016, the average return for the group was underwater at -0.17%.

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.

  • Fixed-income junk and YTD returns

If you’re a fan of bond funds and looking for some appealing returns, look no further than Emerging Markets LC Debt Funds. Their YTD average return was a positive 12.45%, through 7/21/16, according to Lipper.

Or, at Emerging Markets HC Debt Funds with that group’s average YTD return for its 272 funds of +11.27%.

Prefer investing in US bonds? Then General US Treasury Funds have rewarded shareholders with an average return of +9.51% this year; High Yield Funds a YTD return of +9.20%; and Corporate Debt BBB Rated Funds of +8.58%.

See, even  junk  can be rewarding.

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$13 an hour and financial stress

 

DSC04796Jamie Dimon received a lot of ink earlier this month when he announced he was giving 18,000 of JPMorgan Chase’s lowest paid employees a bump up in wages. He is moving them from a low of $12 an hour to between$13 and $16.50. Nice gesture. But, still not enough.

If the goal of handing out an hourly wage increase to the lowest paid employees is to move them to a living wage level, $1 an hour increase –or even pay of $16.50 an hour —-doesn’t do it.

Work 40 hours a week for 52 weeks at $13 an hour and someone will have earned $520 a week and $27,040 a year, without deduction, taxes, etc. , according to my orange hand-held calculator. At $16.50 an hour it’s $660 a week, $34,320 a year.

That’s not much of an income for a household of any size.

Dimon, as the CEO of JPMorgan Chase, has an annual income that has grown handsomely over the past few years and now reportedly is $27 million. (That’s a year. Not accumulated over a lifetime.)

Break his 27 million down and divided by 52 equals a weekly pay of $519,230.76. If that week included 40 hours of work, his hourly pay would be about $12,981. So basically, Dimon has to work less than 2.5 hours a day to earn what it takes someone at his bank earning 13 bucks an hour to make in one year.

There is something very wrong when a CEO makes more money in a few hours of work each day than his low-level employees make in an entire 12 months.

From where I sit, Dimon gets no bragging rights for increasing the hourly wage for his bank’s low income wage earners. The bank can afford to pay them much more particularly since his income continues to increase year after year. And, he especially gets no bragging rights for cutting jobs to pay for either.

If he and other execs need a clue as to what constitutes a living wage in America today, it’s about $30 an hour. According to a recent Financial Finesse survey, “mothers with minor children living in households with income below $60,000 a year are the most financially stressed.”

Imagine an America where even  low salaries  afford a living wage. It’s doable. After all, how long  does someone have to make  $20 million or more a year  before they finally have enough?

For most of us it would be one.

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POCKETBOOK: Week ending July 16, 2016

  • IMG_0204•Got cash? If not, get it.

I’m going to continue to remind you—okay, harp—about making sure you’ve got a stash of cash that’s readily available and easily accessible. How much do you need? Six months of living expenses. Not six weeks. But six months. If that seems like an unrealistic amount, get over it. Save it.

I could list dozens of reasons why everyone needs to do that, instead I’ll let the richies lead the way.

According to a recent UBS survey of 2,200 high net worth investors, 84 percent think the upcoming election with have an impact on their financial health. Many are choosing to keep 25% of their holdings in cash.

While most of us aren’t richies, having an emergency rainy day stash is essential. Particularly. if  you aspire one day  to be a richie.

  • Market Quick Glance

Below are the closing YTD performance numbers of four popular US indices as of Friday, July 15, 2016, according to Bloomberg. One-year performance figures are also included.

But before going there, overall it was a week of wins for stocks. That said, the big question on every talking head’s mind is if this market has more bull in it. As always, time will tell.

In the meantime, time also tells us that bull markets don’t go on forever.

-Indices:

-Dow Jones +7.84%YTD (That’s a gain of over 2% for the week)

  • 1yr Rtn +5.14%

-S&P 500 +7.045% YTD ( Also 2% higher)

  • 1yr Rtn +3.91% (This index lost ground during the week)

NASDAQ +1.19% YTD (An improvement of about 2%)

  • 1yr Rtn -2.15% (Lost ground)

Russell 2000 +6.99% YTD (About a 2% gain in one week)

  • 1yr Rtn -3.42%

-Mutual funds

Through Thursday, July 14, 2016 the average U.S.Diversified Equity Fund ended the week with an average YTD return of +4.86 %, according to Lipper. That’s a gain of 3.4% from last week’s  1.44%.

And how about those Precious Metals Equity Funds! As of Thursday’s close the average return for this group of 73 was up 120.25% YTD. Frank Holmes, CEO of U.S.Global Investors, thinks there’s still room to go.

On the other hand, Commodities  Precious Metals Funds, while up 29.46%, lost a bit of ground from their previous week’s close of up 29.52%

The average return for Sector Equity Funds was up 12.52% YTD. There are 2,295 funds included under this heading.

Latin American Funds continued to gain ground—up on average more than 8% from the previous week: Its YTD return was +31.05%.

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.

  • Our “rigged” economy

Seems as though a number of surveys show  an awful lot of Americans now believe our economy is “rigged.”

Although that’s one of Donald Trump’s many claims,  apparently the thinking isn’t simply limited to Republicans or Democrats, Hispanics, whites, blacks, etc. It is across the board out-loud thinking.

Survey answers show the bottom line reason for that  is because of the belief that our economy is set up to benefit a very few—and that’s a valid point.

But  the “rigged” word  bugs me.

According to Dictionary.com, rigged means “ to manipulate fraudulently.”

TheFreeDictionary.com writes that rigged means, “To manipulate dishonestly for personal gain: rig a prize-fight; rig stock prices.”

TheUrbanDictionary.com defines it like this: “1. The word rigged is used to describe situations where unfair advantages are given to one side of a conflict.
2. Describes the side of the a conflict that holds an unfair advantage. “

There is definitely an “unfair advantage” when it comes to  wages and the humungously broad and unnecessary wage gap that exits in America today.  And the result  of that disadvantage is that it has made it difficult—if not impossible—for millions and millions of individuals to live the life they had hoped, dreamed and planned for.

But I’m not sure our economy as “rigged” as it is governed by the greedy. And being greedy has never done anybody,  any country, or any civilization any good.

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POCKETBOOK: Week ending July 9, 2016

  • IMG_0204Ranges of the Top 1%

Life would be much simpler if facts were carved in stone–unchangeable. Something you could count on. Take to the bank.

But they’re not. So if you think that becoming a member in that elite sliver of 1 percenter’s lakes an income of $1,000,000 you’d be way off.

All it takes to be considered part of the 1% crowd, a family only needs an income of around $390,000. That’s it, according to CNNMoney.

But wait, there’s more: According to IRS, 1% status varies from state to state.

So, wanna be a Big Wig and live in Connecticut, the average income of  the 1% there  is $659,979. In Massachusetts the level is more than  $100,000 less; $539,055. In New York, $517,557.

Have an annual income of less than  $250,000 and you’d be in that 1% group if you live in West Virginia, Arkansas, or New Mexico.

•Market Quick Glance

 

Below are the YTD performances of various US indices ending Friday, July 8, 2016, according to Bloomberg. One-year performance figures are also included.

 

-Indices:

-Dow Jones +5.66% YTD

  • 1yr Rtn +4.93%

-S&P 500 +5.45%

  • 1yr Rtn +4.85%

NASDAQ -0.28% YTD

  • 1yr Rtn +0.53%

Russell 2000 +4.49 YTD 

1yr Rtn -4.52%

If you’re looking for future guidance in today’s current market, perhaps Bob Dole, senior portfolio manager at Nuveen Asset Management said it best. In  a Bloomberg interview he  said we are in a period of “more muddle thorough.”

I believe he has hit the nail on the head.

-Mutual funds

Through Thursday, July 7, 2016 the average U.S.Diversified Equity Fund was up 1.44 percent, according to Lipper.

Under this umbrella heading that included 8,403 equity funds, Equity Leverage Funds had an  impressive YTD average return of 13.02%. But don’t get too excited about hopping on this fund type train as performance can be seriously rocky. For example, a week ago the average fund here was down 0.7%. And, the average performance over the past 52 weeks  down  4.9%. But,  over the past 5 years, up 7%.

Screaming into the over 100% average performance return lane are Precious Metals Equity Funds. At Thursday’s close the average one under this heading was up 115.54%. Miles behind it, but definitely with serious returns, are Commodities Precious Metals Fund, up 29.52%.

Leaving Sector Funds and  among  World Equity Funds,  Latin American Funds are up an impressive 22.61.% YTD.

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.

•Daily Improvements

Benjamin Franklin was no slouch. He was a statesman, author, inventor, etc. who left us with oh-so much including a simple prescription for how to live a productive life.

Anyone who wants to make a  brilliant difference in the world, as Franklin did, might want to follow the disciplined habits of his daily life.

According to a post at Inc.com by Michael Simmons, Franklin got up early and spent one hour every day reading/learning. He also set goals, hung out with like-minded artisans and tradesmen, turned his ideas into experiences and spent time each day in reflection.

Amazing how simple habits can reward us.

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