a blog about investing
This week’s historic Supreme Court ruling could be a wind-fall for gays married and living in at least 13 states and the District of Columbia. That accounts for about two thirds of gay marriages in this country. For the rest, things are not so clear. read more…
So far this market is performing as predicted. The sell-off began at the end of May and June is shaping up to be just as disappointing. July should be no great shakes either but all this means is the markets are setting up for a great fall and winter. read more…
You would think the world was coming to an end, given the global investment community’s reaction to Fed Chairman Ben Bernanke’s press conference on Wednesday. Evidently, we are so addicted to the Fed’s multi-year stimulus program that even a hint that the party may be coming to an end is a major cause of concern. read more…
Here we are in the middle of June, in the third year of a Presidential Cycle, and no one is talking of its historical bullish implications. Despite all the present gloom and doom about the economy and the stock market, here’s something to remember. There has never been a negative return in the stock market during the third year of any president’s four year term since 1939.
Sometimes you just need to throw in the towel, take your losses and walk away. This is not one of those times.
Last week’s uninspiring gain in employment disappointed Wall Street and sent the markets into the doldrums. As July approaches and the start of most state and local government’s new fiscal year begins, expect a lot of pink slips in the mail.
The May non-farm payroll jobs report was a disappointment. So much so that investors dumped stocks, convinced that because the country only added 54,000 jobs, the economy is kaput and we all headed for economic Armageddon. Now, doesn’t that sound silly?
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.
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.
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?
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 hope that helps.
Readers should know by now that I’m a contrarian. The worse things seem to get, the more interested I become. Take Japan for example.