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.
If you’d like to find out about the opportunities, and perhaps more importantly, the risks you are likely to confront in the year ahead, then we invite you to join us today, January 15, at 1:00 p.m. Pacific Standard Time, for our first live teleconference of 2013.
This teleconference, aptly titled, “Opportunities and Risks for Investors in 2013,” will give you our latest outlook on the equity markets as we embark on another year of uncertainty and unknowns. Register here.
If you can’t listen live to the teleconference today, we will have a link available on the site this week for the audio recording of it, as well as a complete written recap here on the blog. In the meantime, are you worried or concerned about an area of the market, or looking for specific opportunities or challenges? Please send us an email at askdoug(at)dougfabian(dot)com.
Also, if you have concerns and you’d like us to take an in-depth look at your specific situation, free portfolio reviews are going on now in our offices, and we encourage you to embrace a personal game plan for your investments. If you’re interested in our advice on your portfolio and goals for 2013, please call us at 888-300-3684.
Because of the uncertain climate (the election, now the fiscal cliff) many investors suffer from paralysis when it comes to moving investments around or making changes.
There is a lot of risk in the world, but go back to your goals and objectives and make sure that you are working toward those goals. Sitting on your money and simply avoiding risk is not a strategy for success.
What’s preventing you from implementing your plan? Many investors are motivated by fear, and you need to give yourself time to slowly make healthy changes in your portfolio. Gain knowledge about the various investment strategies (our telecconference is a great place to start), and give yourself freedom to see what happens with a small portion (say 2%) of your portfolio.
Take baby steps and remember your goals. We want you to look forward to a total return on your portfolio, not just avoiding risk.
As always, here at Fabian Wealth Strategies we are available to discuss your portfolio and help you update your portfolio in the best way possible. Call us at 800-391-1118 for your free portfolio review.
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. Plus, 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.
Our recent teleseminar, The Election, Your Money, Your Future, is the most listened-to teleconference we’ve ever done – more than 6,000 people so far either listened to the live conference call or have downloaded the recording. If you are not one of those individuals, we encourage you to read our recap and listen to the recording here.
As a refresher course and a reminder to everyone, however, we want to highlight a few of the investment opportunities that we discussed in the teleconference, and that we encourage investors to watch closely over the next few months.
Bonds: there’s a lot of paranoia out there about bonds, but there’s no evidence that they are faltering right now, and we do not see a reason to panic. The bond market is still strong and low-risk.
Dividend equities: specifically, utility and telecom stocks – there are opportunities to come in both of these areas, and we are looking for chances to buy these stocks at a discount. Owning a low-risk utility stock is a great strategy for your portfolio, especially as the U.S. is not currently in recession.
Emerging markets: investors will get a better, higher yield for emerging market bonds, because of the added risk. Emerging markets have a good growth story right now, and in the seminar, we highlighted China as a specific example of market correction and opportunity.
Cash: with unpredictable political climates (fiscal cliff, taxes, etc.) having some cash on hand for opportunities is very wise. No one knows what the future holds, but we can be prepared for the risks and opportunities in the market, and make good use of our capital.
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.
Note: this week is a holiday week and markets will be closed on Thursday for Thanksgiving. Fabian Wealth Strategies will be closed Thursday, but will reopen for a few hours on (Black) Friday (11/23/12). We hope that you enjoy your Thanksgiving with family and loved ones!
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.
Last week we issued a Fabian Plan Sell signal, which was the second FPS we’ve issued in 12 months. We believe that the market is high risk right now, and we issue these sell signals to our paid clients based on our indicators.
Historically, the Thanksgiving holiday tends to give markets a bounce. We advise all of our readers and listeners to watch your portfolios and manage your risk. Right now, the market is in basic correction mode. International markets have also been generally weak, and we are watching closely for opportunities and indicators. Bonds are higher when stocks are weak, so they continue to be a safe haven.
As always, here at Fabian Wealth Strategies we are available to discuss your portfolio and help you navigate these unusual circumstances in the best way possible. Call us at 800-391-1118 for your free portfolio review.
(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.)
We all know by now that President Obama was re-elected and Congress remains virtually unchanged. With these election results there won’t be much of a difference in the direction we are going as a nation. There was a sharp sell-off in the stock market last week, but this was largely because of what has been going on in Europe rather than the election. Europe continues to decline into further depression, which is affecting the global markets.
The fiscal cliff is coming up – if no decisions are made then automatic tax hikes and spending cuts will go into affect in the United States at the start of the year. The current economic situation demands that revenues be raised or expenses cut or both, but the automatic tax hikes would almost guarantee the United States would go into recession. There are too many variables to allow for any assumptions on what the outcome will be. However, we can say that a tax hike will affect the stock market, and the increase in tax rates on capital gains and dividends will likely alter how people invest. It will be interesting to see what happens and we will keep you updated on the situation. As for the current stock market we are in a mid-cycle correction and with the uncertainty of the fiscal cliff, we consider short-term risk to be high.
As we mentioned last week we hosted a teleconference where we discussed the election, your money and your future. It is now available on our website, here. We highly recommend you take a listen (or read about it on the blog) if you are currently investing or planning to invest, so you can make the best decisions.
This is a recap of our recent teleconference (Tuesday, November 13, 2012) titled: The Election, Your Money, Your Future. 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.
Here are the main points we want investors to think about in this season:
The elections are over, and it’s time to remove politics from your investment thinking.
Think before you act. Make good investment decisions, follow good strategies.
Avoid speculation. No one can predict, guess or bet on what will happen next. There’s a lot of noise out there, so be wary of fear-mongers.
Think about solid investment ideas to build upon.
First, let’s discuss the things that we are certain of, that will absolutely affect our money and our decisions:
Obama re-election, Congress remains the same.
Obamacare implementation, taxes, and regulation.
Higher taxes
Recession in Europe is worsening
Recession in Japan
New leadership in China
Next, examine those things which we are less sure of. These are not news items we should be speculating about or making decisions based on, because we simply do not know their outcome. Be aware of these items but not panicky about them:
Fiscal cliff outcome
Greece to exit the euro and deal with current cash needs
Spain also has severe cash needs
New policies from China
Potential global recession
Again, we are not making investment decisions based on things we don’t know. We need to be prepared for worst-case scenario, but not investing our of fear or an end of the world scenario. For your continued education and information, we will be having another teleseminar on Tuesday January 15, 2013 in order to update these uncertainties and continue moving forward, so mark your calendar!
Fixed-Income Review and Outlook
Bond market uptrend still in place, which makes bonds a good place for your money right now. There are a lot of people predicting bond market collapse, but we think this is inappropriate speculation, and we want our clients to know that we believe the bond bull market to be still intact.
(Click on chart to enlarge – Key to charts: AGG = Aggregate tripleA rated bonds, LQD = Large corporate bonds, TFI = National municipal bonds, EMB = Emerging market bonds)
Speculation continues that interest rates will rise in the next year, but for right now, these price trends are clearly in place. Obama being elected is an affirmation of Ben Bernanke and the Federal Reserve’s monetary strategy, which is keeping interest rates low. We want to dispel the myth that worries about the strength of the U.S. dollar right now. We believe that the dollar is doing just fine, currently in a short-term uptrend, and is stable. We are monitoring it and global faith in our currency, but we are not seeing anything to worry about in that area right now.
U.S. Indices Review and Outlook
(Click on chart to enlarge – Key to charts: DIA = Dow Jones Industrial Average, QQQ = Nasdaq 100, SPY = S&P 500, IWM = Small-cap stocks)
The longer we stay below the 200-day moving average, more probability of a longer and more serious correction in the markets. We believe that there is still a great deal of short-term risk in the market, but that this will present good opportunities for smart investors. We are defensive with our portfolios but looking for opportunities, and hoping to be buyers in this climate.
International Review and Outlook
(Click on chart to enlarge – Key to charts: EFA = 800 stocks of large international companies (no U.S. exposure), IEV = Europe, EEM = Emerging markets, FXI = 25 largest companies in China)
Opportunities for Income and Growth Investors
Income:
Mortgage backed security strategies
Emerging market bonds
Invest in securities that create a monthly income stream
Dividend equities (could be a good opportunity for purchase in a panic)
Growth
Equities that pay income stream (we like utility stocks and real estate investment trusts right now)
China
Precious metals, mining.
We want to remind our listeners and readers that position size is very important when making investment decisions. We are in defensive positions right now, but alert to buying opportunities. We are not speculating or panicky, but wise and ready for our next investment move.
Personal Finance Post-Election Strategies
Taxes
With President Obama, tax issues are coming in 2013. California taxpayers, Prop 30 is retroactive, so there will be a large tax bill coming to California taxpayers that you need to be aware of and prepared for. Obamacare taxes will begin, as will fiscal cliff negotiations, and this all means that you should look closely at your taxes and meet with your CPA so that you can be prepared for the impact of this political and fiscal climate.
Income
This is the investment area where most people make big mistakes. Before you do anything, declare the kind of investor you are, and make a plan for that investment goal. The mistake that income investors most often make is chasing yield. We encourage you, do not chase speculative or volatile investments in order to get higher yields. It’s not worth it. Your entry point is critical, and it’s important to pay attention and put your money to work at the right price and right time.
Growth
We’re in a secular long-term bear market. Have a shock absorber for volatility. Look for equities that pay income and avoid risk.
Legacy
Everyone is going to die at some point, and how do you plan to take care of your spouse, family, heirs and other causes when that happens? Do you have a relationship with a competent investment adviser? You need professional help in order to insure that your goals and dreams are realized, both for you and your loved ones.
To close, we have some essential takeaways for all investors:
Know that short-term risk is high.
Revisit investment objectives.
Revisit asset allocation.
Prepare for buying opportunities.
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.
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.)
