Central banks around the world are selling U.S. government bonds at the fastest pace on record, the most dramatic shift in the $12.8 trillion Treasury market since the financial crisis. Sales by China, Russia, Brazil and Taiwan are the latest sign of an emerging-markets slowdown that is threatening to spill over into the U.S. economy. Previously, all four were large purchasers of U.S. debt.Steve and Sinclair review an incisive article on global debt buying and selling by the Wall Street Journal. In the Q & A segment, investment manager Gary Kaltbaum joins the A-Team to give us a preview of the earnings seasons and what to make of stocks like Amazon and Catepillar.
In the past 12 months, companies in the Standard & Poor’s 500 have doled out nearly $1 trillion to shareholders in the form of both dividends and stock buybacks, the highest level since 2007. For years, hedge fund managers have been big proponents of share buybacks, even actively advocating for it. Now, though, they are viewing them with a more critical eye, says Sarah Max writing for Barrons. Worse yet, a handful of well known companies have borrowed over a trillion dollars in the first nine months of 2015--more than the U.S. deficit--and used the money to buy back shares in an attempt to boost their share price or make their slide look less discouraging. QualComm was one of them.Steve and Sinclair review a timely article by Sarah Max of Barrons on the subject. In the Q & A, Steve answers some hard questions on annuities and income planning.
Over a hundred years ago inventor, Nikola Tesla, had built the Wardclyffe Tower and said he was onto technology that would eventually create “an inexpensive instrument, not bigger than a watch, [which] will enable its bearer to hear anywhere, on sea or land, music or song however distant.”Need we mention the Apple watch?
The Yugoslavian born Mr. Tesla foresaw the transmission of electricity directly through thin air, particularly radio waves. Steve and Sinclair review an article by Christopher Mims in the Wall Street Journal on this technology's rapid progress using chips that re the size of a peel and stick price tag and will eventually charge your phone when you simply walk into the room. In the Q & A segment, real estate Attorney Christopher McNichol joins the A Team to discuss risks and opportunities in the purchase of tax liens as an investment.
Investors love stock splits—at least investors who pay attention to them and study them. Since October 2000, when the Hulbert Financial Digest began monitoring one particular stock split strategy’s performance, it has doubled the Wilshire 5000 index’s annualized return, 10.5% to 5.3%. This 15-year market-beating return matches up with studies conducted by David Ikenberry, Dean of the University of Colorado’s Leeds School of Business. He and two co-researchers found that the average stock that underwent a stock split between 1975 and 1990 outperformed the market by 7.9% over the year following the split’s announcement, and by 12.2% over the three years following that announcement (equivalent to 3.9% per year on an annualized basis).
Stock splits are maneuvers where a company increases the number of shares outstanding – as a way to lower the per-share stock price. Steve and Sinclair review and explore a number of stocks that have split and their performance after the split. In the Q & A session stock split strategist Neil MacNeale joins the A-Team to review principles he has used to outperform the S & P significantly over time.
Federal laws prohibit Individual Retirement Accounts—IRAs-- from continuing on indefinitely after the original owner’s death, which is why the IRS created RMDs, aka Required Minimum Distributions. Some owners of IRAs want to stretch out the payment to beneficiariesafter they pass, to extend the legacy or perhaps their beneficiaries are not equipped to handle the lump sum payout.
To "stretch" an IRA, investors have two viable options: 1) They can create a specialized trust that can be treated as the beneficiary or 2) they can use an annuity for their IRA funding vehicle and have the insurance company create the stretch.
If a trust is used, there are strict requirements. In Segment 2, Steve and Sinclair review the restrictions, issues, and benefits. Then in Segment 3, estate planning attorney Richard Dwornik joins the A-Team to expand on the details. Certified Financial Planner® Murray Titterington with IQ Wealtlh also joins the discussion.
Many security and privacy researchers expect a cyber-breach event in America that will make the hack of infidelity site Ashley Madison look like a footnote by comparison says Christopher Mims writing for the Wall Street Journal. The breach could affect not just people seeking extramarital affairs as with the Ashley Madison case, but everyone in America.
Even more scary, it could be under way already, and we don’t even know it, say computer security experts. Steve and Sinclair review the fast pace at which you are being tracked, traced, and monitored by data brokers. In the Q & A, segment 3, real estate Attorney Stephanie Wilson reviews cases and issues with Home Owners Associations and how a buy and flip investor got burned.
The recent Volkswagen debacle is a downer for Volkswagen stock, but caused a rally in Palladium--which jumped 9% in a matter of days. In segments two and three, gold expert Nick Grovich goes into detail about why it happened and how it happened. ( Platinum is used in diesel engines, Palladium in gas burning engines.) Learn the truth about how to protect your portfolio with metals, without overpaying. Steve reviews market dynamics and why it is important to use the August 24 flash crash as a gauge for designing your current portfolio--and how to avoid over $100,000 in fees.
Janet Yellen is now talking about an imminent raise in rates before the end of the year, citing inflation factors are rising enough to warrant it. Meanwhile, the Social Security Trustees aren't seeing any signs of inflation--in fact they're seeing enough de-flation to eliminate a Cost of Living Adjustment for 2016.In segment 2 today, Steve and Sinclair review five Fed meetings in history that had a major impact on the economy and markets, from Fed chairman Marriner Eccles in the 1930s, to Paul Volker in the late 70s, to Greenspan and Bernanke. In segment 3, CFP® Murray Titterington with IQ Wealth reviews his planning process, including the three types of planning software employed.
Social Security Trustees are projecting a "0.0%" Cost of Living Adjustment for 2016, while Part B premiums will rise by 50% for the top 30% of income earners. Steve and Sinclair review the reasons why and the calculations being made according to Jason J. Fichtner, a Senior Research Fellow at the Mercatus Center at George Mason University. In the Q & A segment Professor Wade Pfau, PhD, joins the A Team to review is vast work in the area of retirement income planning. He is well known in the financial planning industry for his work in the areas of safe withdrawal rates, sequence of returns risk, longevity risk, and how to plan retirement outcomes.
Read more at http://masteringmoney.moneyradionetwork.com/#5PmMtTMmLdXjePvg.99
When oil prices collapsed late last year, the $83 billion dollar FranklinTempleton Income Fund suffered mightily, losing more than $2 billion dollars on its energy-company investments according to the Wall Street Journal. Portfolio manager Ed Perks responded as portfolio managers at Franklin Templeton often do: He doubled down, purchasing $2 billion dollars more of energy-sector junk bonds. So far, the trade is a bust. Stock and bond prices declined further this summer as oil dropped. In August, fund investors pulled out about $1.47 billion dollars worth--the biggest departure in the fund’s 67-year history except for October 2008.
But Franklin Templeton isn't the only major bond fund holding junk. Vanguard, Loomis Sayles, Blackrock, and Lord Abbott all have added junk to their portfolios to bump up the stated yield. Here's the problem according to the Wall Street Journal--when rates rise and mass redemptions come in, these funds are forced to sell their most liquid high quality assets first, in order to raise cash. You may be thinking long term but the other investors are thinking "exit door" leaving you with a lower quality holding. In segments 2 and 3 today, Steve and Sinclair review insights from leading analysts and draw conclusions.