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Money News Update June 30, 2014
Marc’s notes:
Markets continue their assault on the 17000 Dow level making all us money people look good. But how many called it? A few did, the rest just go along with the age old idiocy of “buy and hold” for the long term. You get lucky with that droning when markets go up but what about when markets go down?
I have a saying; “there is a time to own an asset and a time not to”.
Right now we own solid dividend paying stocks. I am starting to think about adding some solid dividend paying gold stocks and funds shortly but not yet. Stay tuned to Money Matters for when to pull the trigger. You should continue to add physical gold and silver coins until you get up to 10% of your net worth. I have some ounces from a source RIGHT now if interested and the price is a deal at $40.00 over spot at the time of the transaction. Email me if interested. He has about 5 ounces to sell.
marc@moneymanagementradio.com is my address for this gold.
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There is not much new in the markets as summer is doldrums time. No worries, we wait and collect the checks. By the way, if you want to earn BIG MONEY, get the report below called “Stocks On Sale”. This is a great strategy that I use every day to make 100-% or more on my portfolio annually. Follow my trades every day on Twitter and see for yourself! Then get the report and take the class and you could be well on your way yourself.
Economic stats are so-so, and GDP (all goods and services in the US) was DOWN by over 2 % last quarter. Incidentally a “recession’ is 2 quarters in a row of negative GDP. There is one! You can bet the government will massage the stats to NOT SHOW a negative quarter coming up. They will NEVER admit to a recession in the face of QE.
My guess is an anemic but positive GDP number next quarter with a 25 % change of a BLOW OUT to the upside to wow us into LA-LA land again. I put a 10 % chance on another negative GDP number if that. They just won’t allow that to happen. (show a recession).
Stay tuned and now read this great article below. No offense to my advisor friends but people don’t REALLY need us as you and I know. Index investing does just as well. If you don’t believe that keep reading. I love my advisor and realtor friends so don’t get upset! This article does not refer to you folks!
Like I said, you astute advisors should know the majority of stocks and funds just follow the markets and buying an index fund is as good as you can do with all your selected funds.
I know we have to make a buck but let’s be honest here. Read the article and tell me if you made 140 % net to your clients since 2009 because if you didn’t, you’re just taking their money needlessly. Money should not trump truth. Level with your clients and make them aware of ALL your loaded funds and fees, all your commissions and mark ups in plain language. Sit them down and say “I am taking $xx amount of your money from you as my fee and also charge you $xxamount in commissions and fees”.
Reiterate that so they completely understand. Then show them a chart of the Russell, the S&P or Dow against your selections. If they want to stay with you after that comparison, then ok but if you don’t tell them the truth, all of it, then you are being dishonest. Try the above exercise and come clean to your clients and you will be a better man (or woman) for it. You might find even though you may not have come close to the 140% the index grew, many of your clients will probably still stay with you anyway but they deserve the TRUTH!
Anyway, read on dear listener, read on…………………
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Do you have a professional money manager or financial consultant manage your money, buying you stocks and mutual funds because you think you don’t know enough to do it yourself?
You are not alone in that thought but just because a lot of people might jump off a bridge, does that mean you should?
The point here being that managing your money in my opinion is a fairly simple task and almost anyone can do it once you realize how the stock markets function.
The truth in most cases is it doesn’t matter what funds or stocks you own as most just move in lockstep with the major indexes. That being said, if you own the major indexes, you will probably do as well or better than a managed group of stocks.
Let me clarify this statement with a simple example you can verify yourself in a few minutes with a computer and a copy of portfolio and its historical performance.
Reviewing your portfolio performance, has your financial advisor given you a 140 % increase in your portfolio since 2009?
If not, my recommendation for years to just buy an index fund and save those huge fees by doing it yourself rings true. In other words, buy one of the big index funds like the Dow 30, S&P 500 or Russell 2000, (better yet buy all three) then sit back relax. You will save on all those fees and that means more money goes to you and your family.
How do I know this?
It’s simple: the “I shares Russell 2000” index has posted a 140 % gain since 2009.
If you had owned this one index (costing you about 10 bucks to own) you would have posted this 140 % increase in your money AND saved all those fees and commissions.
You also can nix those 6 months visits to that fancy office to “review” your portfolio, a fancy name for garnering even more commissions by buying and selling stocks and funds to “reallocate” your holdings. These semi-annual checkups give the appearance the advisor is doing something to warrant their fees. Adding insult to injury, they may then charge you more commissions on the “reallocation”.
Topping that off, the Russell 2000 index doesn’t have those high management fees like some of those mutual funds you own and doesn’t have a sales or “load” fee like many funds may have that you are sold. Worse yet, many investors don’t even know they paid a load fee, another shortcoming of a host of advisors.
Of course, show your advisor this article and he or she will likely point to the performance of the portfolio or scare you into thinking you need them in time of crisis.
Then ask yourself, during the last “crisis” (2009) what happened to your stocks, funds and your balance during that time?
My bet is you got slaughtered like the majority of other investors.
Want to check it out for yourself?
Google up the “I shares Russell 2000” index chart, then compare it to your statement since 2009.
If you’re not up 140 % like the Russell 2000 is, it may be time to seek another route.
You may have done a lot better (maybe about 140 % better) by simply opening up a discount brokerage account, paying the ten bucks or so to buy the indexes and pocketing the thousands of dollars those “experts” take from you each and every year in fees and commissions.
With the access of the modern internet, you can verify this statement in a few minutes and see who is talking smack and who is speaking the truth.
Numbers don’t lie dear reader so grab your portfolio history and check it out for yourself.
Keep in mind, the truth can stand up to scrutiny. It is high time to scrutinize your holdings against the common indexes mentioned above and then ask some serious questions.
After all, it’s your money.
In conclusion, I’ve always said if you know a money manager or advisor that works 8 hours a day in a fancy office (that you paid for) he is probably not very good, for if he was, he wouldn’t need to take your money to survive. He would spend an hour a day trading his own account and spend the rest of the day in the gym and with his family (like I do).
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Want to learn more about how to easily manage your own account in less than 4 hours a year?
Email me at marc@moneymanagementradio.com.
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That’s all for now,The next Money Matters Show airs July 3rd Thursday at noon PST. on KVMR FM and worldwide on www.kvmr.org.
Do you wish to go over your portfolio with me? Email me, I have some time in early July.
And I still need someone to service my water softner.
And do you have gardening, clean up or other dirty jobs? My 14 year old ALL-STAR baseball player/son is finishing up baseball and needs to work to save for his car and college. Rate is on $10.00.hour and if he doesnt work harder then anyone I personally will finish the job! Call me on my cell at 530 559 1214 to help this hard working kid earn some money or email me at marc@moneymanagementradio.com.
marc
