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Mastering Money

Mastering Money is hosted by Certified Income Specialist™ Steve Jurich. Steve's comments have been seen on MarketWatch, CNBC.com, Bloomberg, and TheStreet.com. Steve is joined on most days by Money Radio favorite Sinclair Noe as well as experts and authors from the world of Wall Street and real estate. New episodes published every weekday at 9am PST. Listen every weekday to get a handle on emerging market trends, asset allocation strategies, social security, medicare, RMD planning, tax strategies, estate planning, annuities, life insurance and more!
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Now displaying: January, 2016

Jan 29, 2016

With markets volatile to start the year, institutional and individual investors are making a run to dividend paying stocks. Ben Levisohn of Barron's points out that you must be more careful than ever.

Companies are paying out over 41 percent of their earnings while earnings decline. It can't continue indefinitely. Steve and Sinclair review. Very timely

Jan 28, 2016

Oil and stock markets have moved in lockstep this year. The unusually strong link between the two markets partly reflects a common driver: fears that a slowing Chinese economy could tip the global economy into recession.
Oil had been an oversupply story but with China slowing down, it is becoming a demand story as well. Steve and Sinclair review a strong Wall Street Journal piece on how stocks and oil are moving together more than they have in 26 years

“Oil and stocks are being correlated by a single issue, which is fear of slipping global growth,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, overseeing $128 billion in assets.

Until last summer, most stock markets climbed even as oil slumped. The prevailing view was crude’s decline mainly reflected a glut in its supply, as producers from Texas to Saudi Arabia flooded the market. But weak Chinese economic data around August shifted focus to demand. The world’s No. 2 economy consumes about 12% of the world’s oil, second only to the U.S. Key points for all investors in today's market.

In the Q & A segment, Matt Griffin of Payson Petroleum joins the A-Team to report on what's happening in the trenches in Texas. Payson currently operates 26 rigs with rights to 5,000 acres.

 

Jan 27, 2016

Even with nearly $20 trillion in debt and climbing, the U.S. dollar is strengthening against virtually all currencies, especially the Chinese Yuan. The Fed has a problem with that.

China continues to fight battles with currency speculators, and is dependent on ever larger inputs of local bank credit to keep sputtering growth from declining further.

The slowdown in China is expected: “zombie” factories, empty apartment blocks, ghost town suburbs, mothballed power stations, and expensive infrastructure that nobody needs are everywhere. Steve and Sinclair review a Wall Street Journal report on how China is affecting the global economy and how it is altering the Fed's vision for interest rates. Get the intel.

In the Q & A Segment, CFP Murray Titterington with IQ Wealth joins the A-Team to explore the "Value Trap" when selecting stocks for your portfolio.

Jan 26, 2016

Nobody wants to be described as “easy prey,” but too many new real estate investors are, says investor Justin Pierce in The Washington Post. Unfortunately, he’s right: bad deals and advice abound, carefully calculated to part novices and veterans from their money.

Investors of all stripes must be alert to red flags on each and every investment opportunity. It’s all too easy to be snared by opaque metrics, shady dealings and not-as-advertised properties. Steve and Sinclair review the pros and cons of Crowdfunding real estate projects---the good, the bad, the ugly.

In the Q & A segment, commercial real estate attorney Christopher McNichol of Gust Rosenfeld joins the A Team to discuss the finer points of what happens when a seller suddenly decides to sell to someone else.

Jan 25, 2016

Steve reviews a new Blackrock survey of several thousand investors who say they are holding more cash than even THEY think they should.

Gold expert Nick Grovich sits down with Sinclair to talk about which gold investments are better poised for growth as markets get shaky.

Jan 25, 2016

Steve reviews a new Blackrock survey of several thousand investors who say they are holding more cash than even THEY think they should.

Gold expert Nick Grovich sits down with Sinclair to talk about which gold investments are better poised for growth as markets get shaky.

Jan 21, 2016

The computer systems that run our world—the ones that secure our financial information, protect our privacy and even keep our power grid running—all have a critical, unpatchable weakness, says Christopher Mims writing for the Wall Street Journal. It’s the humans who use them.

As the toll of data breaches and hacks mounts, and the specter of a “cyber Pearl Harbor” looms, it’s worth asking: how do we defend against a breach not of our computers, but of the minds sitting next to them?
Facebook, for example, is a huge trove of everything from our contacts to our whereabouts, and tons of information about us that we don’t even know we are revealing can be gleaned from it by clever algorithms, from our tastes to our politics.Friending strangers on Facebook through fake accounts— and then leveraging mutual connections to gain access to the network of a mark—is a common tactic of the “social engineering” style of hacking that is proliferating among today's bad guys.

You might ask who would be naive enough to be taken in. The answer is plenty. In one study of 150,000 test emails sent to two of its security partners, researchers at Verizon Enterprise Solutions found that 23% of recipients opened the email, and 11% clicked on the attachment, which under normal circumstances would have carried a payload of malware. Or, as Verizon’s 2015 data breach report so colorfully put it, “a campaign of just 10 emails yields a greater than 90% chance that at least one person will become the criminal’s prey, and from there, it’s bag it, tag it, and sell it to the butcher.”

But how can you keep human error out of the equation, for example,if you’re a J.P. Morgan Chase & Co.—which recently suffered a breach of data about 76 million households—and you have more than 250,000 employees?

Steve and Sinclair review a fascinating Wall Street Journal piece. In the Q & A segment, estate planning attorney Richard Dwornik joins the A-Team to discuss real world situations where a general durable power of attorney in combination with a trust could have worked but didn't, and why. In Segment 4, Steve reviews a real world Sting that you may have thought was just a story for a movie.

Jan 20, 2016

Jason Zweig, author of the Intelligent Investor and columnist for the Wall Street Journal, has studied a strategy gaining traction with higher net worth clients. He reports on a form of bucketing strategy being used by investment thinker Ashvin Chhabra--a former Chief Investment Officer with Merrill Lynch. Chhabra has developed a bucketing system to match his clients’ stage in life. Alongside a market portfolio of stocks and bonds, he says, you should hold a “safety” bucket of stable assets with at least 40% of your assets, plus an “aspirational” bucket of even riskier investments with about 5%.

In research papers and in his book titled “The Aspirational Investor,” Mr. Chhabra argues that instead of organizing your portfolio around the markets, you should organize it around your own goals.

He says a portfolio should achieve three goals: insure your standard of living against severe short-term loss, maintain your standard of living over time, and even improve your standard of living if possible . You want a mix of assets that can fund each of those goals no matter what the stock and bond markets do.

As Zweig says, the larger your safety bucket, the more risk you can withstand elsewhere. Steve and Sinclair dig into the fine points of the strategy reported on in the Journal.

In the Q & A segment, CFP®, CIMA ® Murray Titterington with IQ Wealth reviews his screening process for high value dividend paying stocks for Bucket 3 of the IQ Wealth.

Jan 19, 2016

Study after study shows that missing the best days of the market can cost you.

Why? It turns out that almost all big stock market gains and drops are concentrated in just a few trading days each year. 

Missing only a few days can have a dramatic impact on returns. For example, an investor who hypothetically remained invested in the S&P 500 Index throughout the 20-year period from 1994 to 2013 (5,037 trading days) would have earned a sizable 9.22% annualized return, growing a $10,000 investment to $58,352. More than a five-fold gain.

When the five best-performing days in that time period were missed, the annualized return shrank to 7.00%, with $10,000 growing to $38,710, and if an investor missed the 20 days with the largest gains, the returns were cut down to just 3.02%. If the 40 best-performing days were missed, an investment in the S&P 500 turned negative, with $10,000 eroding in value to just $8,149, a loss of $1,851.

Market timers believe they will miss the worst-performing days by going to cash. They of course end up missing the best days also. Steve and Sinclair review two important statistical studies on missing the 10, 20, and 30 best days and comparing to the missing the 10, 20, and 30 worst days with input from Morningstar.
 
In segment 3, Steve and Sinclair discuss strategies for missing the worst days of the market while growing income at 6% to 7%. Steve answers the question "Are annuities right for IRA rollovers?"
Jan 14, 2016

When the stock market tumbled in 2008, pleasant sounding “target date” funds for people near retirement sustained heavy losses. Since then, sponsors of these funds, which specify a likely retirement year in their monikers and are widely offered in 401(k) retirement plans, have generally lightened up on stock exposure, but have beefed up on low paying bonds.

Anne Tergesen writing for the Wall Street Journal points out the Catch 22 that is built in to so-called Target Date funds whose business model works well with interest rates on bonds somewhere in the five to seven percent range, but are gasping for air with bond rates in the two’s and three’s—making these funds potentially obsolete in the current environment.

With fund managers now raising allocations to bonds, these portfolios have grown more exposed to the negative impact on bond prices of rising interest rates—especially since the Federal Reserve has embarked on what is expected to be a series of U.S. interest-rate increases. Steve and Sinclair review and examine the risks and basics of target date funds, and how it applies to mutual funds and ETFs in general in this riskier market.

In the Q & A session, nationally renowned dividend expert Chuck Carnivale, the originator of F.A.S.T. Graphs, and FastGraphs.com joins the A-Team to discuss his approach to dividend investing. He explores two approaches--one that is very time consuming and another that is more in the "set-and-forget" mode. Both have their places. Mr. Carnivale is a long term blogger for Seeking Alpha and Guru Focus. Very interesting and timely discussion.

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