Monthly Archives: July 2016

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.

-30-

 

 

 

 

$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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POCKETBOOK: Week ending July 2, 2016

D4D9B736-82F6-41F2-8E50-9AF038749C6C
Happy 4th of July from me and my dog Grace.

How about that Brexit bang!

One week ago investor talking heads were all dazed and confused  worried about what the UK’s decision to leave the EU would mean to markets around the globe.

Turns out, as far as the super short-term is concerned, one week after their vote Bloomberg’s data showed that all of the markets in North and South America–excluding those in Columbia and Venezuela– ended the week on a positive note. The countries included on the week’s plus-side of the ledger include all those in US, Mexico, Canada, Brazil, Argentina and Chile.

Of course the jury is still out regarding the long-term  as what the Brits voted to do is a very very big deal. The reality of their actions will take years before all  ramifications from it surface.

  • Market Quick Glance

Below are the YTD performances of various US indices as of the close of business on  Friday, July 1, 2016, according to Bloomberg. One-year performance figures are also included.

-Indices:

-Dow Jones +4.45% YTD (That’s a gain of 3.2% from the previous week’s close.)

  • 1yr Rtn +3.93%

-S&P 500 +4.06% YTD (Up nearly 4% from last Friday’s close.)

  • 1yr Rtn +3.49%

-NASDAQ -2.20% YTD (Last week’s close was down over 5%)

  • 1yr Rtn -1.62%

-Russell 2000 +2.64 YTD (About a 2% gain in one week)

       •1yr Rtn -5.92% (A big improvement considering last week the 1-year return was -10.6%.)

-Mutual funds

A double-header of mutual fund returns to report as Lipper’s performance numbers on June 30 reflect year-to-date figures, and, given that Thursday was the last day of June, the following total returns also represent how funds have performed for the first half of the year.

So through Thursday, June 30, 2016 the average U.S.Diversified Equity Fund was up 1.50 percent, according to Lipper.

If mama had only told you to buy gold at the first of the year, and you listened and purchased a mutual fund investing in precious metals, you’d be loving her as the average Precious Metals Equity Fund has moved up nearly 100% so far this year (99.23% to be exact.)

Then again, if you’d been holding a fund under that heading for the last five years, beginning in  2011, you wouldn’t be smiling as the average Precious Metals Equity Fund is down 13 percent over that 5-year time period.

And therein lies  the trouble with investing in precious metals: They are a hugely volatile asset class. Be mindful of that. Timing is key. Bragging rights limited. So are holding periods.

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.

  • Happy Independence Day!

There’s nothing quite like America. If you don’t believe me, travel the world and see for yourself.

Hope your 4th brings with it a celebration of oh-so many things.

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Fireworks laws tougher than gun laws

 

fw3

This morning I got to thinking about buying fireworks for a 4th of July celebration. That’s when it dawned on me that there are only certain times of the year, or places, where the bang-bangs can be purchased. Then I remembered that not all states in America allow the sale of fireworks. And that’s when one of the sparklers in my brain lite up and I realized that people can purchase say a semi-automatic weapon, such as an AK47, a Glock or any variety of other guns  along with their required ammunition, a whole lot easier than they can say, firecrackers.

To be sure, I needed to do some research so I started calling friends in far off places like South Dakota and learned that yes, fireworks can be sold there—but only in certain places and for a limited amount of time. People from neighboring states apparently flock to this state with the new branding message of “We’re better than Mars” to buy them.

Hard to believe that slogan got sold to them but whatever.

In addition to needing money to pay for them, all buyers of fireworks in South Dakota are required to show their driver’s license before any purchase is possible.

While most states in our nation allow the sale of fireworks to one degree or another, a few of them–Delaware, Massachusetts, New Jersey and New York—actually ban the sale of consumer fireworks, according to the American Pyrotechnics Association website.

In other states,  such as Illinois, Iowa, Ohio and Vermont, only wire or wood stick sparklers and a few other novelty items are allowed to be sold.

Right here in the “stand your ground” Gunshine State of Florida the list of “specifically prohibited” fireworks sales items include firecrackers, torpedoes, skyrockets, roman candles, daygo bombs, and any fireworks containing explosive or flammable compounds.

As for ID requirements, they  vary from state to state.

Also  hard to believe is that lawmakers have placed more restrictions on the sale of fireworks than they do on the sale of firearms given that you can buy guns pretty much  24/7 somewhere all year long. But, it kinda sorta looks as if that’s the case.

To find out where your state’s stands on fireworks visit: http://www.americanpyro.com/state-law-directory.