Are you still bullish?

Dear Bill, The last time we spoke was in March and I had just gotten back into the market after a six month stint on the sidelines. At that time, you were looking for S&P to hit 1450 level into the summer.In the first week of April I had a little over a 9% gain.Since then I have given back most of my gains and as I write this am up about 3%.I follow your column weekly and see you are still bullish.Do you still see the S&P reaching your target?I am starting to get just a bit nervous. Dear Kevin, Yes, I’m still bullish. As a regular reader, you know that I have expected this latest pullback to bottom in the 1,300-1,325 range on the S&P 500 Index. Today we are at 1,315, so we may have a bit more to go. We could also overshoot that number by 20-30 points (i.e. 1,275-1,280). I wish I could be more accurate but unfortunately forecasting market levels is an art not a science. Fundamentally, I am not a member of the doom and gloom club.  By the way, I do commiserate with your feelings of nervousness. No one, including myself, is immune from feeling that way when markets decline. I guess that is the price of being invested in the stock market....

Should I buy an annuity?

Bill, I read your article from last year on annuities and wondered if anything has changed. A broker I have a small IRA with (as well as a broker working with a local bank) is touting immdiate annuities as a beneficial income stream as I get close to retirement (I am 62). My wife and I have cash in the bank making next to nothing and looking for a low to moderate risk for return. We are also looking at this as a way to roll over an old whole life policy with good cash value but if we take the cash we pay tax on the earnigs. The cash portion earned under 4% last year. What might be better alternatives as CDs are not paying much either? Dear John, DO NOT buy an annuity. At your age you will be trapped into holding a low paying, extremely expensive security that will not help your retirement one bit. I suggest you look at GNMA Funds. Every fund family offers at least one of them. The fund managers invest in only GNMA bonds that are guaranteed by the U.S. government, which are yielding about 4.5% right now. The price will fluctuate along with short term interest rates but not nearly as much as a longer term bond fund or a stock fund. You could also consider a municipal bond fund if you are worried about taxes. There are hundreds to choose from or you can simply buy a national muni exchange traded fund (MUB) which will invest in a spectrum of funds around the country. MUB is presently yielding 3.66%. I...
Q & A with Bill : Riddle me this…

Q & A with Bill : Riddle me this…

Riddle me this… Are there questions about finance, economics, or the markets that you are just dying to ask? This is the forum for you. Each week I will take those questions that I believe will have the most interest to our readers and expound upon them.  Everything you write will be completely confidential. I never use last names nor will your information be used in any other way. Some readers may ask for specific recommendations or portfolio allocations. Since I am a money manager, by securities law I am prevented  from making specific recommendations in a public forum  but I can make specific recommendations to individuals so be sure to include your e-mail and, if possible, your telephone number.  And remember, there are no stupid questions only stupid answers so no matter what your level of financial expertise this forum is for you. Just type in your questions below in the comment section and I promise to do my best to answer all of them and feature at least one a week for our readers. Who knows maybe this week it will be your...