Interest rates start to rise, Apple stock a mess, stocks rally, Money classes and more. Update January 27, 2013

Marc’s notes,

Well first lets get to business:

All Money Matters shows are posted on the website Moneymanagementradio.com for your download!  Check it out. Newscasts are there to and changed weekly or more.

The Woman’s only discounted See Jane Do class was a great success. We are now asking those who attended to email us if interested in Class 2 which takes up where Class 1 left off.

Email me quick so we can get a date. Cost not announced yet but it will be affordable.

Those who attended or anyone who has ever attended one of my classes get more than half off a personal sit down with me where I look at YOUR particular situation. I also buy the meal. Email me now for an appt of if you have questions.

Never attended a class but thinking about it? Learn about stocks, bonds, gold, real estate, rental properties, lots, inheritance and more. Or do you wish to meet with me one on one? Email for that too. I have time this month in the mornings so get crackin’.

Markets:

Euro news is still in the news but slowly being shuffled under the rug. Keep in mind all central bank programs are BAILOUTS that are paid from either taxes or through inflation. ALL PROGRAMS.

So the news media knows some of us realize this and aim to keep bank press OUT of the news and instead distract you with stimulus talk, fiscal this or that banter and stock market babble.

Meanwhile in the back rooms they talk debt ceiling increases that include meaningless deals in spending and then trumpet some “deal” that allows for more borrowing but addresses nothing in substance to get the US financial situation under control. With trillions in debt and more planned every day, no amount of new taxes will correct a compounding problem that gets worse by the day. About 4 billion worse every day is what we overspend. Yikes! That’s insanity with many zeros on it.

So the Dow plows slowly higher but wait, a new crack in the financial system is appearing and that is that INTEREST RATES are creeping up.  Although the FEDS are attempting to keep them near zero, we are seeing rates rise and quite quickly. This happened numerous times before in the last few years only to return back down. This time could be for real but only time will tell.

I have been reading some serious sources warning of a bond crash being imminent but again, no one really knows. I do have a position betting on a JUNK BOND fall through SJB. You gamblers out there could consider this. For the buy and hold investor, you too can wager a small amount on this fund to hedge against a rise in interest rates which is also better recognized as INFLATION.

On the subject of inflation, realize it comes with an economic recovery and this is the rock and hard place we are in. If we see a real recovery, rates will rise and that would make mortgages more expensive and all forms of debt. That in turn would have the tendency to squash the recovery.

A conundrum for sure given all the debt the world now has.

Higher rates would mean it would cost more to service all debt including government debt. Needless to say higher rates would crush the real estate market back down.

On the subject of inflation, the cost of everything is continuing to rise and even the FEDS are becoming worried. They are discussing a halt to the money printing programs in their latest releases. I doubt they are serious but being not too bright, they may not realize their halting programs will bring about a crash in almost all things financial. The FEDS are the only reason things are rising in price such as stocks, bonds and housing.

If they are dumb enough to try and slow down their money programs, they will witness a halt to the rise in the markets and that along with housing and the all markets will start falling again. At that point they will capitulate and print again.

Holdings:
Gold is still going nowhere and may even fall with rising rates. In the long run, gold will outshine all other investments. Always have a core holding in physical gold and silver.

Also consider some gold funds and stocks to help juice profits when gold rises. Just realize you could see nasty corrections along the way to scare you out of your positions.

Stocks should rise with inflation but will correct should the FEDS stop printing only to rise again when the resume. You should hold some stocks to protect you and I prefer dividend payers. (See my Super Dividend Payers List for my holdings).

Bank accounts are still a part of my portfolio. Simple savings will do with maybe a few short term cds (up to 2 years only). I-bonds are also a good diversification and can be obtained at Treasurydirect.gov.

Swiss Annuities are doing great and still semi private. Ask me for a free booklet which I will then mail to you.

Have high net worth? Click on the BFI banner on my site. (right side). This company offers many offshore havens (legal in every sense). High net worth individuals should consider keeping funds out of US borders for obvious reasons.

No Market Safe Cd’s from EVERBANK yet but stay tuned. They do have great checking savings/ Money market programs with the best rates I have seen. Here are the links to the accounts I like:

Money Market:

https://www.everbank.com/personal/high-yield-money-market.aspx?referid=13286

Checking:

https://www.everbank.com/personal/interest-checking.aspx?referid=13286

Bonds meanwhile are in my mind way too risky. (Except government bonds of major countries except Europe which  I hate). I have some funds which pay nice dividends and invest in bonds from financially stable and growing countries on my Super Dividend list and here is the link:

https://moneymanagementradio.com/cart/super_dividend

It is low cost and contains lots of what I own personally.

If you do own bonds, perhaps you should read this:

http://dinarvets.com/forums/index.php?/topic/139648-bank-of-america-issu...

This warning is from no other but Bank of America. Many others are issuing similar warnings. Ignore them at your peril. Again, you can consider SJB to offset bonds you may hold.

Our foreign currency funds are doing fine with the Australian funds paying and paying every month. (See Dream Portfolio). The Swiss Franc is locked in a range of 102-106 but I suspect sooner or later the Swiss Bank will have to let it rise revisiting the highs it reached a few years back. It may take a while but the Swiss National Bank cannot stem the tide for ever. The Canadian fund I hold is also meandering but a solid hold. The Merk Hard Currency fund is slowly rising as well and we recommended you look at this a few years back as well. It is still a solid hold for a portion of your funds.

Our gamblers play shorting the Yen is also up big time since our Twitter tweet a month or so back. We also tweeted to place a stop to protect profits. Don’t add here but wait for a pullback. If you do add, nibble only, it could correct again anytime.  (Follow my on Twitter under Marc Cuniberti for daily market reco’s and information).

Apple is acting broken and my article on Apple’s fall from grace made shortly after Steve Jobs died suggesting that without Jobs, Apple could become just another average stock. I did not expect it to fall from grace so soon but the idea was that it could and its recent rout has certainly made that article appear accurate. I do hold a small bit of Apple at higher prices and would not hesitate to add it now as it is now possibly a nice dividend payer as well as a growth possibility. For a long term value holding, with its 137 billion in cash and loyal following, I like it although the blood bath may not be over. Gamblers who know how to do it can sell the covered calls for quick rich profits. Be aware of the risks however.

As for now, enjoy the stock rally and watch to see the debt ceiling debate and resulting “deal” which will do nothing as far as really addressing what needs to be done and we need to do something to have a chance at avoiding a severe situation in the future. An unbelievable catastrophe awaits us unless they stop the debt accumulation and I mean unbelievable. Only time will tell.

Stay tuned and stay protected,

All for now,

Marc

"All Hail The Prince of the Press"

(Fed Chief Ben Bernanke swearing to print until the cows come home to save his banking masters)