Newsletters - Past Issues

GUARANTEED PRINCIPAL - MARKET UPSIDE THE BEST OF BOTH WORLDS READ UPDATE 2/18/2023

With the latest rally in stocks, investors must be wondering if this recent bout of green is just another in a long series of bear market rallies which will end in another gut wrenching sell off. We have seen this movie before in the year 2022. Stocks crash, teeth gnash and hands wring, then the markets rallies, and hope springs eternal that the portfolio bloodletting is finally over. A then a few days or weeks pass, and another crash takes place, seemingly worse than the one before it.

Repeatedly beaten down in discouragement, investors can find themselves not knowing what to do. Calls to their advisor yield little other than a recording saying “stay the course”.

Although you’ve been told the markets always recover, no one really knows how far it will go, how long it will last, and indeed, if it ever comes back at all. I mean, it IS possible.

There can be solutions for less tolerant investors. As covered previously here in Money Matters, Inflation Protected Bonds, called I-Bonds, from the U.S. government, are currently paying 9.6% APR and are 100% guaranteed. The interest rate does adjust every 6 months so the yield may increase or decrease over time.

(You can read about I-BONDS here: https://moneymanagementradio.com/home).

Rates at your local bank or credit union are better than they have been in years. Cd’s, high yield savings accounts and short term Treasuries rates (U.S. government debt) are nothing to sneeze at  and might be worth a look.

Another not so well known option is what I call a “Triggered annuity”.

An annuity is a contract between you and an insurance company. In the simplest form, you give the insurer a lump sum, and they promise to pay you a certain amount in the future, either in a lump sum or payments stretched out over time.

Although there are many variations on annuities, the triggered annuity has some unique features. The specific annuity in this example measures a stock index on the day your annuity takes force. This particular annuity measures the Standard and Poor’s 500 Index (S&P500), one of the largest stock indexes in the U.S. stock market. One year later, the index is measured again. If the index is exactly at the same value or up by any amount, the annuity company credits your account 8%. That means even if the index rises by only one millionth of a percent, you still get 8%.

Every year the process repeats. If the S&P increases again by the next anniversary date, you get another 8%. Once credited, the gains can never be taken back, which means it can only stair step up and can never go down. The company caps your gain at that 8% a year so if the index goes up by more than 8%, you still only get the 8%. On the optimistic side of things, if the index goes up by even only one iota every year as measured on your anniversary date, at 8% a year, you would double your money 9.1 years. If the index drops in any one year, you don’t gain anything but you also don’t lose any money. If the index drops every year for 7 years (the term of this annuity), they will pay you a minimum guarantee of 1% compounded over the life of the annuity which comes out to about 7.2%.

You will either get the 7.2% return or the gains in the market, whichever is greater. You can also withdraw 10% a year after the first 12 months if funds are needed. Withdrawing more will incur early withdrawal penalties and other terms apply but an annuity such as the triggered annuity may be a way for investors to participate in up markets yet have their principal guaranteed against loss.
 

In prolonged market crashes such as the one we are now experiencing which is now almost a year in duration, a triggered annuity may go a long way in calming investor nerves. After all, who knows how much longer this current market correction will occur and how low it will go.

“Watching the markets so you don’t have to”

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(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Annuities are not FDIC insured and are insured and guaranteed by the underlying insurance company only. Early withdrawal penalties may apply. Annuities may or may not be suitable for all investors. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, SDSU, and California Insurance License #0L34249. His website is moneymanagementradio.com, and was recently voted Best Financial Advisor in Nevada County. 530-559-1214.

Disclaimer: This is not a recommendation to buy or sell any securities. May include forward looking statements. Past performance is not a guarantee of future results. No one can predict market movements at any time. Investing involves risk. You can lose money, including total loss of principal. Consult your tax advisor for all income tax related questions. Stop-loss strategies utilize stop orders which turn into market orders, so they may not limit losses. Dividends are not guaranteed and may be cut or eliminated at any time and may not prevent losses. Annuities are not FDIC insured and are insured and guaranteed by the underlying insurance company only. Early withdrawal penalties may apply. Management fees are not allowed once funds are moved to an annuity. Annuities may or may not be suitable for all investors. Indexed funds attempt to track the underlying index but are only a proxy for that index and may or may not track the index exactly.

 


 

More on Bitcoin Feb 11 2023

 

With the advent of cyber currency, first with bitcoin then followed by a host of others, it was only a matter of time until Uncle Sam threw its hat into the ring.

Crypto currency as it is called comes in many forms. Bitcoin being the most notable, there are many others that go by names like Ethereum, Ripple, Stellar Loomis, EOS and Lightcoin to name a few. With currently over 5000 cyber currencies, it certainly seems like everyone is issuing their version of internet cash.

The idea behind crypto is its anywhere and everywhere there is internet access. Not controlled by any one government, crypto is “mined” by using mathematical formulas called block chain technology. Wikipedia describes it as: “A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets”.

As a currency, its qualification meets some of the characteristics a medium of exchange must possess. A currency must be hard to replicate, be divisible, recognizable, have uniformity, be portable, have acceptability and maintain a store of value. On the first six characteristics, crypto could be argued fits the bill nicely. My objection is having issue with the last characteristic, maintaining a store of value.

Its goes without saying that at times, the price of cyrptos can vary tremendously. Stories of skyrocketing prices and subsequent roller coaster like plunges are common. Although a rising price may convince some investors (and I use that word loosely) to believe crypto makes a great currency to own, the very fact it rock and rolls violates the store of value characteristic in spades.

Store of value means both the buyer and seller of the currency must have faith in its stability. Stability meaning it doesn’t go up or down much. Certainly the buyer of crypto relishes the meteoric rise when it occurs, but like all things money, there is always someone else on the other side of the trade. If an owner (buyer) of crypto makes an overnight fortune on a crypto blast off, the seller of that crypto lost an equal amount. For to buy crypto one must have exchanged something else for it. Usually it’s another currency that is exchanged and the person who sold the crypto now holds a currency that has fallen in value by an equal amount.

Stability, the very definition of maintaining a store of value, is almost nonexistent at this time in the cyber coin market.

Another attraction of crypto is the fact no one or no one government can shut it down. Again from Wikepedia: “It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries”.

By the nature of how its created and it ownership maintained, each coins “DNA” (the mathematical formula that created it) is stored on each and every computer that possesses it. Since the internet is worldwide and basically unstoppable, the thought is it can’t be confiscated by meddling governments and therefore safe to own.

Although the concept of non-interference is maintained in its purest sense, central governments can and have shut down its exchanges. This means if your country of residence decides it doesn’t want you trading crypto, it can shut down all the ways you can trade it by shutting the exchange websites. Internet workarounds are certainly possible but for the average Joe, those backdoors may be difficult to access.

Governments maintain strict controls over their respective currencies. They are the lifeblood of an economy and also the bank accounts for governments. History has proven time and time again a government will insure its currency is valid and not usurped by another other if it deems it necessary.

Currency controls are common as are restrictions against exchanging a countries currency for another as citizens as governments try to protect themselves from a currency crisis.  A currency crisis is the absence of confidence in that currency. Think Mexican peso.

That said, to say central governments aren’t fully aware of the threat crypto present to their currencies and their economies would to be more than naïve.

Governments worldwide are looking closely into the rise of crypto currencies.

Case in point, the U.S. government is looking into issuing its own version of the cyber coin said Federal Reserve Governor Lail Brainard last year in a conference at Stanford University. The U.S. is not alone. Brainard confirmed the issue is being discussed with central banks worldwide by adding: “we are collaborating with other central banks as we advance our understanding of central bank digital currencies”.

It’s only a matter of time before governments bring down a harder hammer on cyber coins.“Watching the markets so you don’t have to”

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(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. His website is moneymanagementradio.com, and was recently voted Best Financial Advisor in Nevada County. 530-559-1214.


 

To advise or not to advise NEWS UPDATE ON FINANCIAL STUFF Feb 5 2023

Now that many investor portfolios have been cut to ribbons, the phones are ringing with investors asking familiar questions like should they sell their stocks, buy more stocks or do nothing and just sit there.

My first question to anyone who calls is to ask the investor if they had protective stops in place (predetermined sell points) and sold some positions as the market fell, or did they instead follow the “buy and hold for the long term” crowd which possibly led them down the rat hole of devastating losses.

I am of the opinion that most people practice sound money management when playing a slot machine. Simply put, at a certain point they pick up their chips and walk away.

In my opinion, investors should practice a similar strategy with their investments. After all, your lifetime’s savings are much more important than the few hundred dollars you might forfeit at a one armed bandit.

I am always surprised at the number of advisors and investors who do not practice nor even consider having predetermined sell points to protect against severe market crashes.

Most professional traders I know who use their own money or manage large funds use stop loss strategies to protect against devastating losses. Just tune into CNBC sometime. You’ll eventually hear many of the big traders discuss principal protection as being tantamount to successful trading.

Why many professional advisors may not use stop loss strategies is a mystery to me. They stick to the old adage “hold for the long term” and just ride a market down to wherever it might end up and where it ends up might not be a very nice warm and fuzzy place.

Instead, it could be a place where one loses sleep, his sanity, his or her spouse as financial pressures mount along with a good portion of their lifesavings.

I can hear the familiar chant of “the markets always comes back” from the peanut gallery right about now and I doubt that this time around those words are providing much comfort to those that have lost a good portion of their retirement accounts in the 2022 sell off.

Although prolonged market crashes of this magnitude are rare, they do happen, and when they do, the ongoing damage to portfolios can take years to recover.

Consider this:  if buying and holding forever and a day is your long term strategy, why not consider sitting on one of the myriad of index funds available on the public market and fire your advisor?

Not that I recommend against using a financial advisor. After all, I am in the financial industry.

My point is if you know a little bit about the markets and trading stocks yourself but you’re strategy is to never sell, then why use an advisor?

For the most part, that may be pretty much their plan as well, so why pay someone to do what you can do yourself?

If you do decide to go it alone and hold for the long term no matter what, then the question becomes what index funds does one buy to wade through the thick and thin of the market’s boom or bust cycles?

I can’t answer that here for obvious reasons but there are plenty of resources out there to guide you through the selection process.

In my opinion, one of the best reasons to use an advisor is for providing some sort of principal protection. That means they should have a plan for exiting or at least reducing market exposure in downturns.

Although in recent decades investors and many younger advisors thought they had seen the pattern that markets always come back, this time around the crash of 2022, which may be continuing into 2023, has taught them a valuable lesson: Markets always come back until they don’t. And if they do always come back, the damage from a prolonged market hammering can be costly.

As in very costly.

Keep in mind, had an investor sold at least some stocks on the way down, there would be lots of cash to pick up some stocks as better prices materialized.

In conclusion, this article is probably not going make me a lot of new advisor friends.

But realizing that all financial advisors are supposed to be fiduciaries (have the investor’s best interest at heart over their own) I just had to at least put it out there right?

To find out if your advisor has a loss prevention strategy, just ask the question: “At what point will you sell me out or at least lighten up on my stocks in a market crash”?

In my opinion, their answer should be immediate, concise and definitive.

“Watching the markets so you don’t have to”

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(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. His website is moneymanagementradio.com. , and was recently voted Best Financial Advisor in Nevada County. 530-559-1214.

 


 

Small Investor play book READ JAN 20 2023

 

New or small investor playbook !

Keep reading....

 


 

I often get approached by investors who have $10,000, 20,000 or 30,000 in total and ask if they should invest in stocks. 

 

Since the majority of Americans don’t have hundreds of thousands of dollars at their disposal, the question becomes a reoccurring one.  Each recommendation depends on the specifics of the individual such as their age, the income level, dependents, and expectations to name but a few.

 

Generally speaking, if the investor is young, they might consider investing a certain amount on a regular basis in order to establish a sound and long term retirement plan.  It doesn’t have to be a lot. Indeed, adopting a crippling commitment amount that one cannot continue for whatever the reason is a sure way to derail an otherwise intelligent endeavor.

 

It is better to start with smaller amounts that is doable no matter what may lay ahead.

Since the young “investor” is new to the world of money, I first issue warnings covering beginning investing mistakes which are so common with new or young investors. I won’t cover them here but there are many (email me for previous article).

 

Since the young investor has plenty of time to build wealth, I am of the opinion they don’t need an investment advisor (nor their fees) and instead open up a discount brokerage account and buy a well-known and low cost index fund and then add to it on a monthly or quarterly basis. The Vanguard family of funds comes to mind but there are many other fine funds. Generally speaking, the larger the funds envelope of asset allocation or geographical localities, the less volatile it might be.

 

The reoccurring deposit into the account establishes not only a good habit one takes into adulthood, the compounding of even a small reoccurring amount can grow to a significant amount given enough time.

 

For older investors that might not have an extremely large nest egg, I remind them what they have is ALL they have, and it’s that amount that keeps them from the line at the local food bank. That means not losing it.

 

And that may mean placing their nest egg in a principal guaranteed investment.  Today that   could include a savings account, CD’s or a portfolio of U.S. Treasuries, all of which are 100% principal protected by the U.S. government.

 

Although for the past few decades they offered only a paltry return, these products are now paying a comparatively healthy return. Today, a properly constructed US treasury portfolio might offer an investor annual yields north of 4%.

 

A triggered annuity might also be another option. Although annuities are not FDIC insured, they can be 100% principal protected by the underlying insurance company. Triggered annuities may offer guaranteed interest rates and possible participation in market rallies yet may avoid any downside.

 

Even though someone may have a modest investment amount, they may still wish to take some risk in the hopes of growing their nest egg.

 

If that’s the case, consider more well-known and widely popular growth stocks that have a proven track record and real profits instead of investing in wild startups with lots of promises yet no profits. Going for the gusto might work out in their beer selection but rarely pans out for the inexperienced investor when it comes to stock selection.

 

On the flip side, I see the most damage done by investing in what I call “privates”. These offerings are not available through a broker but brought to the investor by an advertisement, relative or friend of a friend. Some are story lines about this or that idea or invention that sounds great pushed by some enthusiastic entrepreneur or glitzy advertisement. Other clickbait investments might be seeking money for some property, businesses or startups.

 

They are great stories for sure but from my experience, instead of big opportunities, they turn out to be big holes where money disappears along with the person that’s at the bottom of the hole with their mouth open.  

 

Great visual, I know.

 

Summing this up is to say don’t buy anything that’s not listed in the Wall Street Journal, which is to say whose existence is not widely known and not publically listed.

 

There are worthwhile and profitable investment opportunities privately available for sure, but I see too many dismal failures that swallow up people’s money to recommend a private to the average investor.

 

Avoiding some of the common pitfalls suffered by investing newbies and then considering some of the suggestions made here might go a long way in helping you reach your investment goals no matter what your nest egg.

“Watching the markets so you don’t have to”

(end)

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. His website is moneymanagementradio.com, and was recently voted Best Financial Advisor in Nevada County. 530-559-1214.

 

 


 

Please vote for me ! Jan 10 2023

 

I need your vote!

 

Hello, It is time for the BEST OF NEVADA COUNTY and I have my name in for Best Financial Advisor and Best Radio Personality. Both are listed under Best Professional Services. For the radio personality they only have a write in. You also must vote for at least five categories. Here is the link and if you could take a second and vote that would be great! Its easy and both are a vote for Money Matters! Here is the link!
 
Take a minute and show your support for the #1 Alternative Radio Financial Show for the people and TRUTH ~
 
 
 

 
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