The popularity of income streams at the recent Las Vegas Money show was unbelievable. Most people are interested in income strategies, and there are a lot of questions about how to achieve income through investments.
We’d like to let you know about a new investment idea to think about – these are floating rate senior loan ETFs. They are paying about 5-6% in yield, and we think they could be a good tool for your portfolio. The ticker symbols to watch are:
SNLN
BKLN
SRLN
These ETFs invest in credit from the banking industry and are tied to variable rates, so they’re not tied to the interest rate cycle. The income is paid monthly. However, remember that higher yield investments need to be watched on a daily basis, because risk is higher in these kinds of investment vehicles. Income is important, but so is protecting your portfolio.
We use a combination of mutual funds and ETFs for many of our income clients – there are so many great innovative ideas out there and it’s an exciting place to be investing right now. We love ETFs, but there’s nothing wrong with mutual funds; we like ETFs because they are lower in cost and very transparent, but sometimes mutual funds are the best way to move your portfolio forward. If you have any questions, are concerned about the risk in your portfolio or just want a second opinion on your investing strategy, please don’t hesitate to call us at 800-391-1118.
People tend to think that the most recent past will continue into the future, but we want to caution investors against rushing in with peer pressure. New bull markets are emerging, such as Japan, clean energy and natural gas, and we think that it’s really wise to look at the new trends rather than old news.
As always, education is very important to us, and we encourage you to send any questions or concerns to askdoug(at)dougfabian(dot)com and we’ll do our best to answer them on the podcast or here on the video update.
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.
At the Vegas Money Show, we thought that attendance was probably 30% higher than in the past. The event was packed! It was a great time and wonderful education opportunities for investors. If you didn’t make it out to Vegas, we’ll also be at the Money Show in San Fransisco later this year, so we look forward to seeing you there.
Let’s look at the news this week: the U.S. stock market has gone straight up for the last four weeks. On average, the stock market grows 10% per year, so far in the last few months we’ve seen 15% growth. We believe that the market is euphoric and dangerously ahead of itself. For 18 Tuesdays in a row the stock market has been up, and consumer confidence is surging. There is a wealth effect going on out there, even though the economy is not truly changing for the better.
Domestically, the Obama Administration’s recent scandals: Benghazi, AP wiretapping and the IRS targeting conservative groups, have been labeled the worst week in President Obama’s five years in office. Whatever your political opinions are on these matters, it’s good practice to see how these news items affect the stock markets. So far, President Obama’s approval rating is untouched, but it’s important to keep track of these kinds of trends and news stories.
In other economic news, Wal-Mart is having a disappointing year for sales, producer prices are going down and manufacturing looks rather dim right now in the U.S. However, with the Federal Reserve’s involvement in the markets, bad news is good news, and good news is good news, so it seems as though the stock market will just keep climbing for the foreseeable future. That said, risk is high, although we do have some investment ideas for you that we’ll talking about in the days to come.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Doug is presenting live this week at the Money Show in Las Vegas. To get tickets or watch a live webcast, check out moneyshow.com
During his presentation, he’ll address the following concepts:
New (bull market) opportunities, such as:
Natural gas (FRAK and FCG are both good ETFs to watch)
Clean energy (BPW is a good ETF to watch)
Japan
He’ll also be talking about managing risk, hedging strategies and watching for new bull markets. It’s going to be a great presentation and a good Money Show, so we look forward to meeting you there!
We saw a positive week overall in the U.S. markets, although not internationally. We are seeing some volatility and we see elevated risk levels in the world right now. This market is being driven by factors that are outside the normal realm of the markets.
It seems to us that investors are nervous right now because of all the unusual market activity. The most important thing to remember is that entry point is everything, so it’s wise to be cautious and watch for the right time to enter the markets. Markets correct and reset regularly, and when they do it’s wise to be prepared and on the lookout for opportunities.
As always, if you have questions about the state of the markets, email your concerns to askdoug(at)dougfabian(dot)com and we’ll do our best to answer them either individually or on the podcast.
This is a podcast summary. For more information, please listen to the entire broadcast here.
See Doug live this week and next, in Santa Barbara and Las Vegas, respectively. Please get more information here.
We heard a new acronym this week: TINA, which stands for “There Is No Alternative” (to equities). CNBC and other media outlets are touting the wisdom of TINA, and refusing to see any bad news for equities.
It’s interesting to note that, for the first time in 17 years, the market has not had a 5% correction from January to May. This is an incredible grind higher, but we have not seen any real opportunities to enter this market, and the fundamental instability concerns us.
The economy is not doing all that well, but, as we just mentioned, the media and the markets see negative news as a positive these days, because it means that the Federal Reserve will continue its Quantitative Easing policies. There’s a tremendous amount of faith in the central banks out there, and we all know that this is going to end in an ugly way.
Risk is very high right now. We are seeing unprecedented heights, particularly with the fundamental economic weakening around the world. Remember, fads (tech stocks and real estate, to jog your memory) do not always serve individual investors well, so be very cautious with your investments and know where your risk is.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Strategies are very important to us and we think that every investor should have one – particularly when it comes to the issue of legacy.
How do you want to be remembered, and what’s most important to you? Most people want to make sure that their loved ones, favorite causes and estates are taken care of. It’s very important to have a living trust, in order to avoid a long, painful and expensive experience for your family in probate court.
You want to pass on your assets to your children and grandchildren, and you want to avoid NIGO – a financial insider’s acronym for “Not In Good Order”. If something is messed up – a signature missing, a plan out of alignment, a trust written in order to keep your legacy intact and in good standing for your heirs and loved ones.
If you’ve built up a sizable portfolio, you owe it to yourself, your loved ones and your values to have clarity about your legacy and your expected tax burdens and concerns for the future. Call us today to discuss your needs, legacy, charitable wishes and hopes for your future, at 1-800-391-1118.
This is a podcast summary. For more information, please listen to the entire broadcast here.
Three unusual things happened last week in the markets, which illustrate this point:
Twitter flashcrash: The Associated Press Twitter account was hacked, and a false tweet was sent out, describing an explosion at the White House. It took three minutes for the AP to retract this false story, but in that time, the stock market crashed about 1%. Twitter is a new medium for instant action and this kind of technology creates volatility.
The Charles Schwab brokerage site was down for about 24 hours – blocking access to brokers. Again, this was just a glitch, but it proves that technology is a factor in our financial lives.
The Chicago board options exchange went down for about three hours as well. Another example of the havoc wreaked by even minor disturbances in service.
Mark Cuban, the owner of the Dallas Mavericks and a well-known technology mogul, had a great quote about the fallout from the AP Twitter event last week (read his full comments here): “What’s going to happen when there’s a real event? Do you really thing that there’s going to be any bids at all?” he said. “All we have are circuit-breakers that we hope will work. And then after the circuit breakers, what happens?”
We agree, and believe that it’s important that you have diversification and safety in your portfolios. In this day and age, we are dependent on technology. This dependence adds volatility to an already unstable market, and it’s important for investors to be aware. Our advice is this: plan for these events ahead of time, realize that changes are inevitable and preparation is invaluable.
This is a podcast summary. For more information, please listen to the entire broadcast here.
A lot of people (and the media) think that lower oil, food, basic materials, gold, silver and other commodity prices is good news – after all, it makes our goods and services cheaper. It’s common to think that this means investors are no longer worried about global instability.
We’d take issue with that – we think investors still have a lot to worry about, there are a lot of volatile forces at work in the market right now. This commodity sell-off also means that there’s a slowdown in the global economy, and the supply is more than demand, so this is deflationary action.
Where do we go from here, and what does this market action tell us? A few things:
Speculation unwinding (therefore pushing prices down) is a good thing, and creates real opportunity
Global slowdown is for real, and the U.S. is an oasis of growth right now
Emerging markets and commodity-based countries are getting crushed by this development
We need to watch Federal Reserve action (since their goal was inflation, and we are seeing deflationary action)
Risk assets will be very volatile in the weeks ahead
Volatility can create opportunity for savvy investors
This is a podcast summary. For more information, please listen to the entire broadcast here.
