As a professional San Diego money manager I am often asked the question, “How do you think the market will do in the next few months?” (Insert days, weeks, or whatever other short-term time frame you want). While this certainly is an interesting question, and one many financial pundits attempt to answer daily for their enamored audience, I would argue that it is the wrong way to learn about smart investments. The following questions may not be as exciting as those concerning the latest dire headlines or the meaning of hundred point swings in the Dow – but they do highlight issues that merit a good portion of your investing-related time.
Stock prices go up, stock prices go down. Lately it seems like daily 100-point swings in the Dow are the norm. Traders call it volatility, and the average investor is scared to death of it. But should they be? Is stock market volatility truly something to be feared? Or should it instead be embraced, taken advantage of — or at worst ignored?
In today’s economy, many investors may be wondering how to earn more income through investments – and no wonder. With ten year Treasuries yielding a paltry 1.9% and bank savings rates hovering close to 0%, where is an investor to turn to generate significant income in this historically low interest rate environment?
Think back to the spring of 2009, when the stock market was making headlines – and not in a good way. Market swings and dramatic swoons had even the heartiest among us sick from all the turbulence. Buying stocks was pretty much the last thing on investors’ minds; and for many, selling felt like the best investment strategy.
With the college basketball tourney in full swing – and millions of devoted fans pouring over bracket picks – it’s a prime time to discuss the topic of stock selection criteria.
There’s an old wives tale about a student who gets an exam with the question, “What is Risk?” In response, he scribbles, “This Is,” turns in the test, and exits the room. No one knows if he gets an A or an F – but the story is a good one.
According to survey results covered in a recent edition of Bloomberg Businessweek and conducted by the Institute for Private Investors, high net worth investors are planning to reduce cash holdings in the coming year in favor of allocations to commodities and private companies. In today’s market, such a move makes it possible for investors to reap the benefits of commodities investments without incurring significant costs; and as executive director of IPI Mindy Rosenthal explains, it also marks the renewed popularity of owning physical assets. In Rosenthal’s words, investors are “going back to the old school way of making money” – and with the help of an expert financial advisor, affluent individuals can enjoy the best of both the old and new worlds by putting a smart, contemporary spin on the traditional commodities market.
Of the countless Americans struggling to make ends meet this holiday season, the nation’s millionaires, one might assume, should number among the happy few for whom the upcoming New Year shines relatively bright. But according to the Wall Street Journal, a recent study from PNC Wealth Management shows that only one out of every ten U.S. millionaires is optimistic about the nation’s economic prospects – with three quarters of those polled expressing even darker projections for the economy’s performance over the next six months. Since the inception of the survey back in 2006, such pessimism amongst the nation’s most affluent and successful investors has never been so pronounced – not even during the height of the economic crisis between 2008-2009. And yet amidst such dramatic discontent, there is one area in which American millionaires remain confident: their investment picks to kick-off 2012.
Among the most popular and widespread rallying cries accompanying the Occupy Wall Street movement is a resounding demand for justice from the so-called “99%” – the majority of Americans suffering hardship and financial struggle at the hands of a wealthy minority. But in the persistent face of these demands and accusations, what are the 1% saying in response? According to a recent Daily Finance profile, at least one representative of the group – a 63-year-old multimillionaire named Al Checchi – is just as fed up with Wall Street as anyone else. Granted, Checchi isn’t claiming financial hardship alongside Occupy protestors on the streets; but he is decrying the institutions with whom he trusted his millions for honest money management – only to be “appalled” by the fraudulent marketing, client deprioritization and other transgressions for which major American financial institutions have become notorious over the past several years.
Over the last few months, economic calamity and popular uprisings across the globe have inspired uncertainty and fear in the hearts of millions. However, according to recent coverage on NPR, the unemployed and underpaid aren’t the only ones on the defensive in the face of an increasingly unstable economy. Up against risky stakes and surrounded by crumbling markets, the world’s wealthiest individuals and families are now seeking to secure their assets in what have come to be known as “catastrophe portfolios” – three-part aggregations consisting of “gold; blue-chip international companies; and bonds issued by developed nations.”