Tag Archives: Refinance if you can

POCKETBOOK:Week ending Aug.27,2016


•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.


-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.”