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What’s up at Pimco?

There are a lot of people in the financial world who would like to see bad news in the world of ETFs, because ETFs are growing so rapidly that it’s taking money from mutual funds and other large money managers. One recent story in particular is making waves in the financial world, and that is the SEC looking into ticker symbol BOND, and Bill Gross’ resignation at Pimco.

For more details on this story, see these news articles:

WSJ: Pimco ETF Draws Probe by SEC

CNN Money: Bill Gross exit could cost Pimco $400 billion

LA Times: How Bill Gross and Pimco got too big for each other

Bloomberg: Gross’s Last Defiance Stuns Allianz, Pimco in Janus Move

For Doug’s complete thoughts on this recent news story, please listen to the full podcast here. As always, please call our offices if you have any concerns about your specific portfolio and what this news means for you: 800-391-1118.

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Retirement Planning Lessons

A quick announcement: the Monday Morning Financial Market Review broadcast will be moving to Fridays on October 3rd! Next week you’ll get two broadcasts – one on Monday and one on Friday, so be sure to tune in – the week after, the first week of October, we will move our broadcast to Fridays every week.

In the last two months, Doug and his team have reviewed 40 retirement plans, and he has some feedback and things for investors to think about as you consider retirement, based on his recent observations. Here are his retirement pointers:

  • Do not have significant amounts of money at a local bank or credit union – it’s not secure enough and you don’t get enough return on your savings
  • Cash is not an investment strategy, so consider your long-term goals
  • Be aware of assumptions about Social Security, Medicare and pensions – prepare for the unexpected
  • Stay on top of your expenses, especially health care
  • Know what your investment returns and income will be
  • Manage your risk, especially in the equity markets
  • Manage and monitor your taxes (they will be going up!)
  • It’s best to have no mortgage or, if you must, downsize in order to make that possible in retirement

Be sure to tune in to next week’s broadcast and stay abreast of the news and our perspective on the coming volatility in the markets. If you want to speak to Doug about your portfolio and get his perspective on your unique situation, please call our office at 800-391-1118 for a complimentary retirement review.

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Video Update: Global Growth is Slowing

In our opinion, we’re starting to see a different kind of price movement in the international financial markets. Commodity prices (oil, agriculture, precious metals) have all been going down lately, and that’s a sign that the global growth is not as strong as many people have previously thought.

There’s also been a sharp correction in the emerging markets, so please watch the full video here for price charts and details. If you have questions about the content of this video or would like a personalized investment portfolio evaluation, please call our offices at 800-391-1118.

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President Obama’s Legacy, Part 4

For the last few weeks, we’ve been talking about President Obama’s legacy and what that means for investors. The news stories we’re seeing, that informs our perspective, are about all-time-high tax receipts, 46 million Americans on food stamps and growing and 90 million Americans are no longer working.

The big takeaway is the word: complacency. There’s a high degree of complacency in the investing world, just like those public employees who know that, by and large, they can’t get fired. These kinds of jobs and situations breed complacency in our culture, and that has crept into the investing mindset as well.

There’s been quite a bit of time passed since the last financial crisis, and we are no longer licking our wounds from that. “Buy and Hold” thinking is back, and the stock market seems to be recovered and doing well – which can cause major complacency. It’s been three years since we’ve had a major stock market correction, and most people seem to think that it’s going to keep climbing. This is abnormal for the financial markets, and we think that this is something to really watch out for. Complacency can be your worst enemy when it comes to your investment portfolio, and we believe that you must watch out for this, as President Obama and his cohorts in Washington are sowing the seeds for the next financial crisis. Be prepared to take risk off the table and be prepared for the upset that will surely come from the policies of President Obama over the last few years.

If you have questions about this topic and how it relates to your investment portfolio, please call our offices at 800-391-1118 or email askdoug(at)dougfabian(dot)com.

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Video Update: Four ETFs to Watch

Using four ETF ticker symbols, let’s take a trip around the world. Watch the video for price charts and analysis on these specific funds. Here are the ETFs that you should be watching right now, and they’ll give you a great overview of the financial markets if you watch them closely:

  • SPY
  • EFA
  • EEM
  • FXI

It’s important to pay attention to market trends – not because we want you to follow the crowd, but because education and awareness is very important for investing. Remember to be aware of complacency, and if you’re looking for more detailed help in your portfolio, please call our offices at 800-391-1118.

For more details on this topic and more, click here to watch Doug’s full video update.

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Investing in Natural Gas

We’ve chosen to focus on natural gas today for two reasons:

  • Watching ticker symbols: UNG and FCG. Natural gas ETFs have been correcting quite a bit lately, and we are watching them for our client portfolios
  • We have 100-year supply of natural gas in the U.S. and we like the story long term.

Japan and Europe are both importing most of their natural gas, and this is a resource that we can export to the world, eventually. Right now, we are not shipping natural gas in bulk for technical reasons, but we believe that will come in about a year or so, and we’d like to be prepared for that.

Natural gas is becoming the energy of choice for many utilities and manufacturing outlets here in the U.S.. We think that natural gas is a great investing idea for you and we are encouraging listeners to watch those ticker symbols and keep an eye on price action for your buying opportunities.

If you have questions about natural gas and what it can mean for your portfolio, please call our offices at 800-391-1118 or email askdoug(at)dougfabian(dot)com.

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Seasonal Weakness

We tend to see weaker markets in September and October, and this year is no exception. We’re also noticing some worries in the market because of the independence referendum in Scotland and the United Kingdom, the upcoming Federal Reserve meetings, and the global weakness and lower commodities pricing. However, the U.S. dollar is strong at this point and that is good news for us.

REITs, Energy, Commodities, Gold, Silver, Oil and International markets were all starting to correct last week. We are watching for some buying opportunities coming up in these areas, and particularly in the emerging markets, which you all know that we’ve been watching closely recently. There are global slowdown worries out there and we think that the Federal Reserve meetings and the Scottish referendum vote will both have big impacts on the market this week.

If you have questions about what’s going on in the world today and how it affects your portfolio, please call our offices at 800-391-1118 and we’d be happy to set up a complimentary consultation with you to discuss your investing plan.

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Video Update: Managing Risk in ETFs

We advise you to know and be very familiar with what you own in your portfolio. You need to know these products well and be prepared to move when the next financial crisis appears. If you don’t intimately understand your positions, it’s difficult to make wise decisions in risky environments.

Basically, complacency is a serious investing problem and risk must be managed. If you aren’t sure how to do so or what the financial landscape is shaping up to do in the months to come, please call our offices at 800-391-1118.

For more information on this topic and others, please watch Doug’s full video update here.

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President Obama’s Legacy, Part 3

The key pieces that we see of President Obama’s legacy are higher taxes, the next financial crisis and entitlement cuts.

Right now we want to talk about the next financial crisis. Everybody has seen a lot of e-mails and other fear-based marketing about the upcoming financial crisis. Right now, the global financial markets are being held together by confidence in government. Stock markets and bond markets are rising and causing asset inflation – which everyone loves. There will come a time, however, when confidence is lost. There’s no way to know when that will happen, but we can prepare our portfolios for the risk that is coming in the markets.

There are a lot of potential crises that can happen in the markets, but we think that monitoring the markets and the economy is critical at this time. President Obama’s legacy consists of unsustainable debt and financial obligations, and we have to stay aware of what the consequences of that legacy will look like. So far there’s no problem in the U.S. or international equity markets, but we are watching carefully. We’re also watching interest rates, currency and commodities (specifically oil and gold). If we can’t know when the financial crisis will hit or where it will come from, the best we can do is monitor and act on price movement.

We really believe that there will be some problems down the road, but we commit to you that we will be here every step of the way, helping you to manage risk and prepare your portfolio for the storms to come.

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The Next Opportunities for Income Investors

Here are three investing ideas that we are monitoring for our fixed-income investors. We think that these are setting up for some great buying opportunities soon, and we want you to be watching these ideas as well for your portfolio.

  • Multi-asset funds (ticker symbols GYLD, IYLD and others)
  • International dividend equities (ticker symbols EDIV, DEM, DWX)
  • Alternative energy (MLPs, Closed-end funds and BDCs)

These ideas will provide opportunity for income investors in the weeks ahead. If we get more volatility, we should see some excellent opportunities to put money to work in your portfolio. If you aren’t sure how to implement these ideas, please call us at 800-391-1118 or email askdoug(at)dougfabian(dot)com.

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