Your financial success depends on knowledge. Calculate your net worth and write down specific goals to move forward in your financial plans. There are many ways to grow your net worth: you can pay down debt, save more or earn more, but before you embark on any of these steps, we need good information about your portfolio. Before we get too far into 2013, we encourage you to take the time to look at your assets, debts, investments and accounts.
You also need to be prepared for higher taxes, higher health insurance costs and medical expenses this year. Remember that even though taxes and costs are going up, the national deficit is not being affected. This means that politicians will be back for more tax revenue and we need to be prepared for that as we enter this new year.
This is a recap of our recent (Tuesday, January 15, 2013) teleconference titled: Opportunities and Risks for Investors in 2013. If you missed the presentation, we encourage you to listen to the audio recording and download the handout, as well as read this blog for more information.
The purpose of this teleseminar is to help you with a thoughtful investment process. This is for general information and education, not personal investment advice.
Investor psychology – setting up for success in 2013
Don’t let news and fear dictate your investments. When opportunities come, be prepared to act, don’t wait. Many people are worried about their money, and they delay investment decisions because of this. There are trillions of dollars sitting on the sideline because of this. Worry is a negative emotion – nothing positive comes from it. Worry can cause bad decisions.
These are our four themes for 2013 (and the charts for them, below):
S&P 500
China
Global economy (agricultural commodities will be important because of an increasingly global economy and rising international middle class)
Precious metals. Money printing by central banks is a reason to own gold. Gold doesn’t need inflation to move higher, and will present opportunities.
(Click on any chart to enlarge)
Opportunities for growth
Download our ETF report here. See all of our available ETFs, categorized by type and themes. We think that ETFs are the easiest way to invest in these sectors.
Asia: China and Japan have both been under performing for many years, but may be emerging into a new bull market soon. Japan has significantly lowered their currency value via their central bank, which is good for their exports and equities. We believe that Asia will present some very nice opportunities in the year to come. Ticker symbols to watch: FXI, HAO, FCA, EWJ, SJC
Agriculture: If you were looking for a country that has the best, most productive agriculture abilities, you would look at the U.S. The U.S. has abundant farmland, water, and technology. Businesses are way ahead of commodities, so commodities are a better short-term opportunity, but businesses could be a great opportunity later in the year as well. Ticker symbols to watch: DBA, RJA, CORN, SOYB, CANE, WHET, MOO, PAGG, CROP
Precious Metals: We know that there is strong support for gold, because every time it gets down to $1500, people buy it. It can certainly fall below that, but it wouldn’t surprise us if it did test that support by falling briefly below $1500, then shooting straight up. Central bank and money printing make gold attractive for many people. Ticker symbols to watch: GLD, IAU, SLV, GDX, GDXJ, SIL
Energy: There are huge natural gas reserves here in the U.S., which is a good thing. Energy companies and master limited partnerships are not currently at a good price point, but this is a great sector to be watching for corrections and opportunities. Ticker symbols to watch: AMLP, IEZ, XOP, FRAK
Dividend Equities: Companies that are paying dividends are on very solid footing, have been around a long time, which makes them a good investment. Dividends are still taxed at a favorable rate for most Americans. We think it needs a sharp correction to really be a good value for investors, but keep an eye on it. Ticker symbols to watch: DDY, SPLV, XLU, IYR, DEM
(Click on any chart to enlarge)
Opportunities for income
We think that there are still a lot of reasons to own bonds around the world. We think that bonds are still a good investment and we are not concerned about a bond bubble right now.
Star Bond Fund Managers: Such as Vanguard, PIMCO, Double Line Funds, Really like using these top fund managers. They know what they’re doing and are performing very well for investors. Ticker symbols to watch: DLTNX, BOND
Short Term Bonds: Don’t have huge yields, but can be a good solution. These are easy to use and great for high-cash or income portfolios. Great for holding money short-term while you wait for opportunities.
Municipal Bonds: Cuts or shutdowns with debt ceiling could give buying opportunity for municipal bonds. If you have a lot of income right now and want good tax-free income, this is especially good to keep on your watch list.
Emerging Markets: Bonds of emerging market countries and companies are great opportunities for this next year. Remember that this is not necessarily an option today, because we’d like to see correction before buying, but a great sector to watch.
Dividend Equities: Telecommunications, utilities, etc. Nice yields right now, and might present us with opportunities as the year continues, but again, not today. Good to watch and on your buy list when you see weakness in the market.
Risks for investors in 2013
Today, we purposefully decided to talk about risks after we discussed opportunities. You need to stay positive and think opportunity first, so that you are ready for it. Manage risk, but don’t be a slave to it. Don’t obsess about politics and their outcomes, we aren’t in charge and we’re just going to have to watch and see what happens. Remember that the following risks are not predictions, just possibilities.
Political risk
Inflation
Deflation
U.S. – higher taxes, slowing economy, recession
European sovereign debt crisis
Strategies to manage risk:
Asset allocation – know where your investments are and how much risk you have
Sell discipline – have a goal and a designated sell point
Entry point – buy wisely and watch for opportunities, not worry
Put volatility to work for you!
Vigilance in monitoring – know what you have and why, and have a watch list
Finally, let’s make an action plan:
Have a written goal for your investments – income or growth – whatever you decide on is valid, but you have to write it down and create a plan to make it happen
Invest based on what you and your family needs
Take inventory of your allocations and overall portfolio – decide what to do about risk and how to plan for this year.
Reallocate – look at some starter positions and some new ideas – maybe some of the ideas we discussed today.
Prepare for corrections, opportunities and sell points
As a thank you for participating in our seminar we would like to offer you a free consultation to discuss your portfolio and strategies to achieve your financial goals. This includes an in-depth analysis of all the holdings in your portfolio. We will share with you the unique strategies we are using for our clients right now and how active portfolio management can be of benefit to you.
This offer is available for goal-oriented investors with more than $250,000 in their investment portfolios. Contact us for a brief introduction and to schedule an appointment to review your accounts.
To schedule your free Portfolio Assessment, call us at 800-391-1118.
We have a lot to be grateful for this week, and we wish you the happiest of Thanksgivings!
Note: if you haven’t already, please take some time this week to check out our recent teleseminar for in-depth information on post-election investing and our outlook on the markets.
Over 1,000 people have registered so far for our teleconference, and we are looking forward to sharing with all of you today at 1 p.m. Pacfic Time. If you still haven’t done so, please register here, or stay tuned on the blog, as we’ll be posting a recap and a recording of the entire teleseminar later this week. As always, we welcome your thoughts and questions, so if you have a question before or during the conference call today, please email askdoug(at)dougfabian(dot)com.
The big news is that the market is in correction mode right now. Many people were assuming that the stock market dip after the U.S. Presidential election meant that the market didn’t like the political results. That’s probably part of this correction, but we also have to note that there was a lot of negative economic news out of Europe and Japan which investors are reacting to.
Remember that small corrections are not too concerning unless we start to see trends that last a week or more. Stay aware, but don’t panic the first time your portfolio goes through a slight correction. Corrections also mean that opportunities for smart investment are just around the corner. Here are a few of the places where we see potential opportunities to come:
China
Emerging markets
Utilities
Precious metals and other commodities
(This is a podcast summary. For more complete details, listen to our full podcast here, and don’t forget to pass this blog on to other friends and investors who might benefit from our perspective.)
(This is a summary of our exclusive live teleseminar with Doug Fabian on July 17th, 2012. If you’d like to hear the audio recording of the teleseminar, please click here.)
The Macro-Economic Big Picture
U.S. economy, facts: The U.S. economy is growing at less than 2%, and recent economic indicators are showing that the economy is slowing. Equities remain quite strong, and for many investors around the world, the U.S. is seen as a safe haven in stocks and bonds. One reason why the economy is OK is because of the amount of deficit spending our government is currently engaged in. Bond prices are at new highs, bond yields are at record lows and the U.S. dollar is strong, having not gone to a new low in over four years.
U.S. economy, opinions: Many investors think that the Federal Reserve will correct the market, but we disagree. We think it’s a mistake to not be concerned with downside action in the markets. The U.S. bond market is in bull market territory, and that tells us that the global market is in recession. Inflation is not a concern right now, despite many investors fears – however, the so-called fiscal cliff, debt ceiling and overwhelming entitlement spending are all still unresolved. It’s important to be aware of the political moves and their economic impact, but not paralyzed by them.
Europe, facts: Unfortunately, the banking and sovereign debt crisis is still unresolved in Europe. Southern Europe is in recession (Spain, Greece, Portugal, Ireland), the banking system is on life support and even though Europe is not in the news as much, it is still an economic mess.
Europe, opinion: We believe that a “European crescendo” is still coming. The negative economic picture continues to get worse and it seems that there are no strategies to spur economic growth, which should be a big concern.
China, facts: GDP growth is at 7% (compared to the usual 10%). It is obvious that growth is slowing. China is also dealing with a property bubble and a slipping manufacturing sector.
China, opinion: We believe that the slowing economy in China will have a global ripple effect and will effect commodities prices around the world. It is clear to us that economies are contracting around the world.
Looking back at the first half of 2012 – Looking ahead to the second half
We believe that the rally in the stock market is suspect but the bond bull market continues, at least for the short-term. The U.S. market had a brief correction this year, and it is greatly dependent on the global economy between now and the election. We are still of the opinion that stocks are overpriced for the risky market territory we’re currently in.
Trend Charts
Best ETF Opportunities (for short and intermediate-term basis)
These are our “watch recommendations”:
EMB – emerging market bond ETF
IYLD – multi-asset income fund. New ETF, very unique
BOND – actively managed PIMCO total return ETF
RLY – another multi-asset income fund
VWO – emerging markets are an opportunity for growth investors
XOP – energy (buy in a panic)
IEZ – energy (buy in a panic)
GDX – gold (buy in a panic)
GDXJ – gold (buy in a panic)
A note about the greed/fear cycle: we are all susceptible to the warring emotions of greed and fear. Everyone has stories of how they’ve been caught up in either of these emotions and it’s hurt their investments – to combat that, we want to take charge of this greed/fear cycle. We want our investors to take advantage of it, not be victims of it.
How do we propose taking charge instead of giving into panic or greed? When you see panics in the market, we see those as opportunities, and when everyone feels fat and happy, we want to be cautious and not lulled to sleep. We want to be mentally prepared for opportunities – don’t see panics as the end-of-the-world, but as a chance to buy quality on sale. Finally, what’s your Asset Allocation? What are your investment objectives? What does your family need?
You have to mentally prepared for your next big move in your portfolio. It’s important to recognize and work toward your objectives. For instance, growth and income investors have very different ways of investing and seeing the markets. I believe you should have cash on hand and a list of what you want to buy when opportunities present themselves, and don’t be swept away on the waves of emotion.
Also, we think it’s important to not let your political opinions dictate your investment decisions. Some people will insist that only Mitt Romney, or only Barack Obama will be good for the stock market. Neither of those opinions are necessarily true and there are a lot of moving parts to pay attention to, besides just the President. So we suggest that you keep an open mind, and stay cool and collected no matter what happens in this election – we can’t control all of these pieces, but we can control how we take advantage of opportunities.
Questions and Answers from our listeners (if you have a question, please email us at askdoug(at)dougfabian(dot)com)
Q: I think we are falling back into recession – do you agree and do you think it will be long? A: We are not in a recession now, and we think with good political decisions we can avoid it. It seems like an oxymoron, but it is possible. Investing does not work with fear: there will be volatility, but there will also be opportunities. Focus on what is in your control, not what is beyond it.
Q: How do you invest for income and growth in a taxable account vs. a tax-deferred account? A: We don’t make a big distinction between the two – we sometimes own municipal bond allocations in fixed-income for taxable accounts, and more government and corporate for tax-deferred accounts.
Q: Are Emerging Market utility ETFs a good investment? A: We think they can be, but remember that emerging markets are volatile, so buy those kinds of investments on sale. Also, don’t try to find the very best, but find the one that is best for your specific needs and portfolio.
As always, here at Fabian Wealth Strategies we are available to discuss your portfolio and help you make these decisions in the best way possible. Call us at 800-391-1118 for your free portfolio review.
Note: The information expressed in this seminar is for educational purposes only and should not be construed as a recommendation to buy, sell, or hold any investment security. Doug Fabian is a registered investment advisor representative. The opinions expressed in the seminar are not considered personal investment advice. Consider the risks, fees, and expenses before making any change to your investment portfolio.
We’ve been talking about the European debt crisis for several months now, but we’ve recently coined the phrase “European Blind Side”. You might wonder why we’re so concerned about investors being caught off-guard by developments in Europe, so we thought we’d use an analogy from out here in California.
We see it all the time – it’s a sunny day on the beach, and people have driven in from all over to come to the ocean. Tourists and locals alike are stretched out on blankets in the sand with coolers and umbrellas, ready for a great day. However, it inevitably happens that those who aren’t as familiar with the water, or who just don’t pay attention, will place all of their beach-day accessories too close to the shoreline at low tide. When the tide starts to move in or a big set of waves appears – and they don’t even have time to react – their towels are soaked, their cell phone has gone for a swim and their beach day could very well be ruined.
We think that this is what will happen to many investors who aren’t watching Europe closely. They feel lulled to sleep by the “sunshine” of relative security and up markets here in the U.S., and may very well have their holiday ruined by a big, ugly wave from Europe. Investors who aren’t paying attention to Europe are going to be hit hard and not know what happened or why.
The moral of this little analogy is simple: pay attention and stay educated and aware. Listen to our recent teleseminar for more in-depth analysis of what’s happened in Europe and what is soon to come, and make sure that you are prepared to preserve your capital and keep your towel dry, so to speak.
This is a podcast summary. For more complete details, please listen to the full podcast here.
This week on the podcast, Doug Fabian read several emails on the air and addressed listener concerns. If you’d like an opportunity to hear Doug’s take on your questions or opinions, please send an email to askdoug(at)dougfabian(dot)com
Also, if you want to see and hear our perspective in person, hear some other great speakers and enjoy a getaway in Las Vegas, sign up for the Money Show, May 14-17 2012. Doug will have six different opportunities to present and it’s always a great event, so please check out moneyshow.com to register.
Another great way to stay in touch is our free e-newsletter, the Making Money Alert, and also our special report for advice on how to invest wisely in 2012. As always, if you have questions about your personal portfolio, please call us at 888-300-3684 and one of our advisors will be glad to help.
Join me Saturday, July 10, at 12:00 p.m. (noon) Pacific Standard Time, for a FREE discussion of the rapidly changing 2010 financial markets. In this teleseminar, “Mid-Year Review and Market Outlook,” I will be speaking about how you should position your portfolio for what promises to be a tumultuous second half of 2010.
As you’ve likely noticed, things are not going well with the stock market. We saw stocks fall below their long-term moving average in May, an event that hasn’t happened since January 2008. The major indices now are firmly in negative territory for the year, and many investors are looking for new safety-first strategies to protect their wealth.
During this one-hour teleseminar, I will share with you these key points:
A recap of the financial markets in the first half of 2010. What’s worked, and what hasn’t.
How to read the price trends in the markets, and what they’re telling us.
What investment themes I believe represent the best opportunities in the second half of 2010.
A glimpse of my ETF watch list for the rest of the year.
Most importantly – how to evaluate your current investment positions so that you don’t get hurt again.
All teleseminar registered participants will receive a valuable handout ahead of time outlining the key topics. To join me for this timely discussion on Saturday, July 10, please register today and make sure you reserve your place. This FREE, one-hour teleseminar will be limited to the first 800 registrants. Judging by our last three record-setting teleseminars, we will reach capacity quickly. Take advantage of this opportunity and reserve your spot today!
Sincerely,
Doug Fabian, President
Fabian Wealth Strategies
————————————–
Fabian Wealth Strategies, Inc. is a registered investment advisor with the U.S. Securities and Exchange Commission. Doug Fabian is a registered investment advisor representative. The information expressed in this seminar is for educational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security. Consider the risks, fees, and expenses before making any change to your investment portfolio.
Join me on Saturday, May 15, at 12:00 p.m. (noon) Pacific Standard Time, for a FREE discussion of the rapidly change financial markets in 2010. In this teleseminar, Sound Fixed-Income Strategies in an Uncertain World, I will be speaking about conservative fixed-income strategies that I am implementing during this time of unprecedented financial challenges.
No doubt you’ve been following the news of late in Europe. The continent is facing a crisis in terms of its debt, currency and financial stability. The Euro has fallen over 10% so far this year, while short-term interest rates in some countries have risen to over 20%. Countries such as Spain, Greece, and Portugal have all had their credit ratings cut and face debt ridden economies.
Trepidation rising: While watching the reports from the media, many investors are thinking…
How does this affect my investment portfolio?
What does this mean for the US economy?
What about our debt problems and lack of confidence in our own government?
I’ve been forecasting for months that the problems in Europe would spill over into U.S. investor portfolios and that is what’s happening right now.
Five key points you’ll learn in this seminar are:
How does the crisis in Europe affect your stocks and mutual funds and what should you do now?
What will be the next big move in interest rates and our economy?
What fixed-income investments should be avoided right now?
What are the right fixed-income strategies for the current market environment?
My outlook for the U.S. stock market and equity markets around the world.
All conference call registered participants will receive a valuable handout ahead of time that outlines these key topics. To join me for this timely discussion on May 15th, please register today to reserve your place. This FREE, one-hour teleconference will be limited to the first 800 registered. Judging by our last two record-setting teleconferences, we will reach capacity quickly. Take advantage of this opportunity and reserve your spot today.
Join me on Saturday, March 6, at 12:00 p.m. (noon) Pacific Standard Time, for a FREE update on the financial markets in 2010. In this teleseminar, titled “Return of the Bear Market,” I will be offering my opinion on how you should be managing your assets as we navigate these choppy market waters.
Let’s face it, the last two years have been a wild ride for both stock and bond investors. What I call Phase One began in 2008 with the biggest decline in stocks since the Great Depression. Phase Two saw a recovery of more than 50% for the S&P 500 Index. Most investors now have been pacified by Wall Street and Washington, and many think the worst is behind us.
I believe that we are close to entering Phase Three of this investment cycle, and that could mean another devastating wave of wealth destruction. The good news, however, is that there is time to prepare, as well as clear signals on the road ahead that will give us time to adjust before any real damage is done.
Four key points you’ll learn in this seminar are:
Why stocks and bonds have the potential to enter a new bear market
What are the warning signs to look for in the markets
Where investors can seek safety during the next 12 months
How you can profit from the crisis
This FREE, one-hour teleconference will be held exclusively for the first 800 registrants, and judging by the participation in our last teleconference, we will reach capacity quickly. We urge you to take advantage of this opportunity and reserve your spot today.
