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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: 2016

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.

Jan 13, 2016

U.S. public pension plans and large mutual funds are sheltering more of their holdings in cash than they have in years, a sign of growing stress in financial markets.

A Wall Street Journal Report by Timothy Martin and Sarah Krouse says the increasingly defensive stance reflects investors’ skittishness about global economic growth and uncertain prospects for further gains in assets. Pension funds have the added need to cut more checks as Americans retire in greater numbers, while mutual funds want cash to cover the risk that investors spooked by volatile markets will pull out more of their money.

It’s not unlike the challenges that retirees face with their own portfolios after they retire. The mathematics of making a nest egg last for thirty or forty years is totally different from the job of accumulating a pile of investments over 30 years.
Steady contributions to a 401k can build a investment pile, and there is a huge benefit to contributing during down markets. However, steady withdrawals from a pile can be trouble, especially when withdrawing as markets decline.

Steve and Sinclair review the Journal's statistics and quotes from top pension fund managers. U.S. pension funds now manage over $16 trillion in assets, and have legal obligations to pay income to participants. It pays to know what they are doing with their money for clues about what to do with yours.

In the Q & A segment CFP and Certified Investment Management Analyst Murray Titterington with IQ Wealth joins the A-Team to review the differences between ETFs and ETNs--exchange traded notes.

Steve points out several ETFs that could be positioned well in 2016.

Jan 12, 2016

The Wall Street Journal says: "The debt world is haunted by a specter—that of a destabilizing run on markets. But not just stock markets, high yield bond markets.
Goldman Sachs, for one, put out a warning that Franklin Resources “is most at risk” given the large high-yield holdings of its funds, poor performance, and accelerated outflows.

Now, the high yield bonds of Sprint, one of the most popular junk bonds on the Street, have lost over 25% of principal.
The Journal points out that two years ago, the wireless carrier’s executives were celebrating the sale of $6.5 billion dolalrs in junk-rated bonds—a record offering that underscored investors’ demand for riskier debt as the Federal Reserve kept interest rates low. Brokers and many advisors were pushing junk bonds—mostly referring to them as high yield—to try to offset poor yields from quality bonds.

Those original Sprint bonds sold at par—100 cents on the dollar—but are now trading near 75. Steve and Sinclair review what's happening and why in the bond market, and why so many big name mutual funds are at risk, including Double Line and some Vanguard funds.

In the Q & A segment, real estate attorney Stephanie Wilson, partner in the law firm of Stoops, Denious, Wilson, and Murray, joins the A-Team to dig into leasing clauses that can blow up for both tenants and investor/landlords.

Jan 11, 2016

Many investors find managed futures in their portfolios and see that they have been big money losers over the past few years.

Fees can be extremely high and many of the funds lost 20% to 30% in 2015 with only a few winners.
The Wall Street Journal reports that these funds are suddenly closing down at a rapid pace. You may want to check your portfolio to see if you own some of these pricey dogs.

In all, 31 liquid-alternative funds shut their doors in 2015. These funds attempt to go long and short "as needed" in an attempt to trim losses and take advantage of gains.

They have failed miserably. Steve and Sinclair dig into the subject with some key statistics.

In the Q & A, CFP® and Certified Investment Management Specialist® Murray Titterington with IQ Wealth joins the A-Team to report on the alarming trend of overleveraging by U.S. companies. Many are borrowing money to pay their dividends. Can it end well? Hear the facts. Steve gives some important advice to conservative and moderate retirement investors in segments 3 and 4.

Jan 8, 2016

Regulators have long worried that the nature of leveraged ETFs—which are meant to be traded intraday, not even held overnight—was too confusing for many investors, who would hold them too long, not aware of the lethal time decay of the assets being acquired.
ProShare Advisors and Direxion Shares, the two competing leveraged ETF providers, say that these funds aren’t intended to be held without close monitoring. In straight up or straight down markets, the leveraged ETF strategy can work very well. But in any up and down volatile market, leveraged ETFs can be a disaster. The Securities and Exchange Commission has long contended that investors in leveraged ETFs are “confused about the performance objectives.” They are unaware of the derivative positions that either work or don't work on a daily basis, which can result in permanent losses and internal decay of the fund. Steve and Sinclair review how these tricky ETFs work and why the SEC is taking some action. In the Q & A segment, Steve reviews some key points on annuity misconceptions. Parts of this show were heard on Tuesday January 5.

Jan 7, 2016

Amazon is in a fierce battle to become a major player in India—with some local competition in its way that isn’t exactly chopped liver.

Jeffery Bezos, CEO of Amazon, has his foot to the floorboard in a race to capture the trust of the Indian buying public, entering the scene some five to nine years later than Flipkart and Snapdeal, which have become billion dollar companies while the rest of the world was sleeping. Fortune.com reports that much of the infrastructure for doing business in India is having to be built from scratch by Amazon, tossing out practices it has taken for granted for decades.

In India, Amazon is an upstart, and is in a knife fight with two privately owned and much more established Indian competitors—Flipkart Internet Pvt. and Snapdeal, owned by Jasper Infotech Pvt.—as well as a clutch of smaller Indian startups that are nipping at all of their heels.

Steve and Sinclair review the challenge and the opportunity that Amazon India is taking on. In the Q & A segment, estate planning attorney Richard Dwornik, part of the IQ Wealth team, joins the A-team to discuss the finer points of general durable powers of attorney.

Jan 6, 2016

Hedged mutual funds built around managed futures have been appearing in many investors retirement accounts in recent years, but are they panning out?
Fees can be extremely high and many of the funds have lost 20% to 30% with only a few winners.
The Wall Street Journal reports that these funds are suddenly closing down at a rapid pace. You may want to check your portfolio to see if you own some of these pricey dogs.

Managed futures accounts, smart beta, and hedge fund clones had a rough time of it in 2015.More “liquid alternative” mutual funds closed in 2015 than in any year on record according to Morningstar Inc. Inflows dwindled and performance weakened.

The results show that enthusiasm is fading for what had emerged in recent years as one of the hottest products in asset management—funds that combine hedge-fund strategies like shorting stock with the daily liquidity of mutual funds.

In all, 31 liquid-alternative funds shut their doors in 2015. Steve and Sinclair dig into the subject with some key statistics.

In the Q & A, CFP® and Certified Investment Management Specialist® Murray Titterington with IQ Wealth joins the A-Team to report on the alarming trend of overleveraging by U.S. companies. Many are borrowing money to pay their dividends. Can it end well? Hear the facts. Steve gives some important advice to conservative and moderate retirement investors in segments 3 and 4.

Jan 5, 2016

Leveraged exchange-traded funds—the "hot rods" of the trading world—have long drawn the ire of regulators keen on investor protection. Chris Dieterich, writing for Barrons recently, pointed out that newly proposed rules to curtail the use of derivatives in funds could eradicate the racier products in this $27 billion ETF industry.

Regulators have long worried that the nature of leveraged ETFs—which are meant to be traded intraday, not even held overnight—was too confusing for many investors, who would hold them too long, not aware of the lethal time decay of the assets being acquired.
ProShare Advisors and Direxion Shares, the two competing leveraged ETF providers, say that these funds aren’t intended to be held without close monitoring. The Securities and Exchange Commission has long contended that investors in leveraged ETFs are “confused about the performance objectives.”

Professional trader Aaron Levitt, writing on ETFdb.com, pointed out that structured, leveraged ETFs provide an amplified return for a single day. Just one. If you have a string of great days with no major switchbacks (volatility) they work. Then they reset and provide that same amplified return for the next day. Levitt says that’s the biggest misconception ma

Many investors have about leverage ETFs. They assume that if the index is up 8% for the year, then their 2x leveraged ETF will be up 16%. That simply is not how they work--Steve and Sinclair review leverage ETFs, how they really work, and WHEN they really work.

In the Q & A segment, Steve points out two key reasons why retiring professionals are changing their approach to IRA rollovers. He then takes a look at professional trader Jared Woodard's analysis of the coming year. Important points.

Jan 4, 2016

Happy New Year!
Steve and Sinclair review the news on a day where the markets opened with a downward bang.
Nick Grovich stops in to talk about the precious metals outlook.
Steve reviews the difference a hundred years can make:
The average life expectancy for men was 49.6 years and for women 54.3 years. Today, at birth its 81.2 years females ; for males, it's 76.4 years, among the fastest growing age groups are the 80s and 90s
In 1916, fuel for cars was sold in drug stores only. Only 14 percent of the homes had a bathtub. Only 8 percent of the homes had a telephone, yet
eighteen percent of households had at least one full-time servant or domestic help.

Most women only washed their hair once a month and used Borax or egg yolks for shampoo.
Canada passed a law that prohibited poor people from entering into their country for any reason.

The population of Las Vegas, Nevada was 30.

A competent accountant could expect to earn $2000 per year.
A dentist made $2,500 per year. They charged $1.00 per filling.
A veterinarian made between $1,500 and $4,000 per year.
And, a mechanical engineer about $5,000 per year, twice the dentist

Which assets have never lost money in those 100 years?

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