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Written by Dani, June 13th, 2013
There are a lot of scandals in Washington D.C. right now: Benghazi, AP, IRS and NSA. The environment when we look at Washington right now is pretty ugly, but President Obama still has a 48% approval rating. There is a definite correlation between stock market trends and the President’s approval rating, and that will be interesting to watch in the months ahead.
When we look at Washington, we are looking at the President’s approval rating, Treasury bonds, commodity prices, economic conditions and the U.S. dollar. So far there’s nothing here that is a red flag for investors. These scandals are troubling, but they are not spilling into the bond, stock, currency markets or economy at this time.
In the months to come, we believe that we will see significant drags on the economy from higher taxes and higher health insurance rates because of Obamacare. This is something significant to watch, although we don’t see it as a serious problem today.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, May 22nd, 2013
We keep hearing about bubbles in the stock market, and we want to address some of those concerns today. Three items we learned recently from Jeffrey Gundlach:
- Quantitative easing not ending without negative consequences that force it to do so
- Countries are debasing their currencies around the world
- Global growth is slowing
Now, three items we got from Bill Gross recently:
- Money is chasing risk
- Bond bull market is coming to an end
- Bubbles in stocks, bonds and real estate
Are there bubbles and risk out there, thanks to central bank action? Absolutely, but we think that our investors are well-prepared for the changing tides of the markets. For more information on how to become a Fabian Wealth Strategies investment client, please call our offices at 800-391-1118.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, March 28th, 2013
There have been a couple of articles asking whether the 4% rule of retirement investing still works (meaning that, if retirees withdrew 4% of their nest egg in the first year, and then increased the dollar amount by the inflation rate every year, their savings would easily last their retirement). We encourage you to read them:
In these articles, the writer is asking a question that is common right now – will I have enough money to last my retirement, using the tried and true rules of investing?
We think that the answer is yes. If investors employ some simple risk management, and the 4% rule is alive and well. It’s what we do here at Fabian Wealth Strategies, and we think that this is a positive investing strategy that gives you the 4% you’ve planned on. Even though passive investing is popular right now, we believe that a little planning and preparedness will be powerful tools for your portfolio. As we’ve said many times, the markets are high risk and there’s a lot of market manipulation going on, so we need to be diligent to protect our investments.
If you have questions about how to make your retirement last, or how the 4% rule and some risk management can work for you, please call our offices at 800-391-1118. Also, stay informed as you invest. One great way to stay up on the markets is our free weekly e-letter, the Making Money Alert, which comes out every Wednesday, or our video update, which we record every Tuesday.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, March 13th, 2013
Amazingly, the highs in the Dow are seen as the big story around the world. These new highs come at a price, however, and that’s what we need to talk about today.
Most investors believe inflation will be a big problem because of the Federal Reserve’s tampering in the market through Quantitative Easing. They are worried about the value of US dollar, commodities, healthcare, higher taxes, etc.
On the other hand, we could see deflation, which, frankly, we are more concerned about. If all of this money printing doesnt result in economic growth, than the economy will contract. Stocks usually advance ahead of economic growth so everyone is hopeful, but you need to be prepared for both inflation and deflation at the same time in your portfolio. Both could harm investors, and we don’t know, at this point, which way the economy is going to go.
Deflationary consequences:
- Job losses
- Assets deflate
- Debt defaults
Inflationary consequences:
- Devaluing of US dollar
- Expensive gas, commodities, food, healthcare etc.
Sovreign debt defaults are going to come at some point and restarting economic growth is going to be very difficult if that happens, particularly in Europe. Our advice is this: prepare for an uncertain global economy, and ready your portfolio for both inflationary and deflationary action.
If you’d like more information or guidance on how to do that in your personal portfolio, please email us at askdoug(at)dougfabian(dot)com.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, March 12th, 2013
All the financial markets around the world are positive as of now, which continues the euphoric excitement on Wall Street about our recent stock market highs.
Here’s the good news: unemployment rate declined, U.S. dollar high, jobless claims fell, U.S. stock market high.
But, as always, there’s a flip side. Here’s the bad news: productivity falling in U.S., factory outputs declining in U.S., Europe’s economy is not doing well and we see recession in 60% of the world.
Even though, as our title indicates, many people are partying and feeling good about the stock market, we believe that the fundamentals are weak and that risk is still very high in the markets. Exercise extreme caution, and remember that equities are in an uptrend because of central bank interference in the markets. Better opportunities are still to come, so hang on for the ride and don’t get swept up into the “party”.
If you’d like to find out more about how we can help you and your money face upcoming challenges, act now by listening to the Monday Morning Market Outlook podcast, and then by giving us a call at 800-391-1118.
As always, email any investment questions or concerns to askdoug(at)dougfabian(dot)com. We want to help you make the best possible decision for your portfolio. This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, March 07th, 2013
We’d like to direct your attention to a very important article in the Los Angeles Times from this weekend:
“Has the bull market in stocks become ‘too big to fail’? The Federal Reserve’s efforts to keep the U.S. economy growing may not work unless the stock market keeps moving higher.”
“Officially, the Federal Reserve isn’t supposed to worry about keeping stock prices flying high.
But when Fed Chairman Ben S. Bernanke was asked about the market’s outlook last week on Capitol Hill, he sounded like a lot of bullish Wall Street investment strategists.”
We encourage you to read the whole article here, and remain alert and informed in the markets right now.
This is a podcast summary. For more information on this topic, please listen to our full broadcast.
Written by Dani, March 05th, 2013
Here’s some important news for you to be aware of this week:
We are still flashing the “yellow caution light” for our clients and listeners, despite the latest stock market run here in the U.S. There’s a lot of uncertain news in the world, and we think that the stock market is high risk right now. Better opportunities are coming, so be patient!
If you’d like to find out more about how we can help you and your money face upcoming challenges, act now by listening to the Monday Morning Market Outlook podcast, and then by giving us a call at 800-391-1118.
As always, email any investment questions or concerns to askdoug(at)dougfabian(dot)com. We want to help you make the best possible decision for your portfolio. This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, February 28th, 2013
Every week, we have lots of conversations with investors. One of the things we’ve really noticed lately is that most people are sitting on cash, because of fear of volatility. If that is your strategy, we want to encourage you to look at your options – for example: the bond market is stable right now. One thing that can disrupt a strong bond market is a weak currency, but right now the dollar is strong, so that’s not a risk at this time.
For our clients who invest in bonds, their income streams are steady. There are plenty of places to invest in the bond market that can give you income, capital appreciation and liquidity while we wait for market corrections and other opportunities. Our portfolios are conservatively positioned, awaiting other opportunities – but not necessarily all in cash.
We’ve also talked to several clients who have a highly appreciated assets, particularly in real estate. We are advising them to exit those assets in this “recovery phase” of the real estate market in order to get out of illiquid investments and be in a better position from a legacy standpoint. It’s important, if you have highly appreciated assets, to make a plan to manage those, taking taxes, legacy, philanthropy and other goals and considerations into account.
If you’d like to find out more about how we can help you and your money face upcoming challenges, act now by listening to the Monday Morning Market Outlook podcast, and then by giving us a call at 800-391-1118.
As always, email any investment questions or concerns to askdoug(at)dougfabian(dot)com. We want to help you make the best possible decision for your portfolio. This is a podcast summary. For more information, please listen to the entire broadcast here.
Written by Dani, February 26th, 2013
In the news lately, we are seeing a lot of concerns about the the Federal Reserve’s Quantitative Easing strategy. The markets are responding to these concerns and the unprecedented involvement of central banks in the financial markets. Because this is an important topic, here are a few articles for you to peruse and be aware of what is going on out there:
We are seeing the effects of the tug-of-war between inflation and deflation, and even a third option, known as disinflation. Disinflation is the balance point between inflation and deflation, where those forces are at work but not creating drastic change yet.
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Update on the Fabian Five:
- Gold – down
- U.S. dollar – up
- Commodities – down
- Global stocks – up
- Bonds – stable
Our opinion is still that U.S. stocks are overvalued and high-risk. We believe that a correction is coming in the markets and that investors should be ready to invest when options go “on sale” not necessarily when everyone is feeling bullish.
(This is a podcast summary. For more complete details, listen to the full broadcast here.)
Written by Dani, February 22nd, 2013
We recently read this cover story in Barron’s magazine, and we want to pass it on to you, our readers, as well:
“In his State of the Union speech last Tuesday, President Obama concluded that “the State of our Union is stronger.” The big question is: stronger than what?
Federal debt is a record $12.2 trillion, or 76% of the nation’s annual output of goods and services. While that’s still well below Greece’s 153%, we’re headed steadily in the wrong direction.
According to estimates by the Congressional Budget Office, adjusted by Barron’s to account for recent tax increases and other factors, if the U.S. doesn’t raise taxes further and cut spending dramatically, the national debt could easily reach 153% of economic output by 2035.
These are not just numbers. If the U.S. national debt continues ballooning, we can be sure of a deep, long-lasting recession — very likely a depression — sometime in the next two to three decades. The unemployment rate could easily surge to 20%.”
Read more at Barron’s online.
If you’d like to find out more about how we can help you and your money face upcoming challenges, act now by listening to the Monday Morning Market Outlook podcast, and then by giving us a call at 800-391-1118.
