Money Matters update for August 2014. Market news, solar, financial advisors and predictions. Money Matters live at the fair!

Marc’s Notes:
Well summer is almost over and I got a chance to cruise to Alaska with my family and my 89 year old father! What a treat! As I returned the markets slipped hard and are still feeling aftershocks moving from a high of Dow 17,150 something to where it sits today at 16,429. A correction for sure but keeping in line with my predictions of minor corrections are possible but a major one is off the table. The Feds just will not let it happen. I am sure your portfolio is down but a lesson I have been trying to teach you is ALL STOCKS just follow the market and I am sure yours did too. So for that matter I include my article on paying advisors and firms to manage your money.

 

Here it is again:

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?

A few decades ago we called them stock brokers but a whole new breed of “brokers” now called financial advisors or financial consultants is upon us in numbers that resemble

the saturation point of the group called real estate professionals during the housing boom.

With plenty of money floating around due to the stock market boom, financial “professionals” run amok.

But you don’t need one of these so called “planners” with their fancy charts to manage your own money and you can probably do as well or better than they could by realizing how the markets function.

The truth is 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 and fire your money manager. You will probably make more money and do so without all the stress.

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 that the so-called experts charge you.

You also can nix those 6 months visits to his or her 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 they’re doing something to warrant their fees. Adding insult to injury, they 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 by that “nice guy” that handles your money. .

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, you’ve just been wasting your money by paying that “nice guy” with that nice office that, incidentally your paid for.

You would probably have done a lot better (maybe about 140 % better) by simply opening up a discount broker account, paying the ten bucks or so to buy the indexes and instead 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.

Incidentally, financial groups don’t like me very much because I expose the truth, but my main thrust is to protect and save you money, and I just did.

Now I am sure there are many financial guys and gals who take this newsletter and those of you who I know personally don’t take this offensively. But you and I know, although we have to make a buck to support our family, people REALLY don’t need us now do they?

Cmon, tell the truth.

For all those out there however who doubt this, here is a wager for you. I will pay any advisor or firm who manages money for a living the sum of $1,000.00 that a combination of buying the S & P, the Nasdaq and the Russell 2000 indexes (33% each) will beat your portfolio in a 12 month period starting anytime in the future you choose including fees and commissions. (Net after fees and commissions). If you beat theses 3 indexes after a 12 month period and verified by statements and a start/ finish date that you email me I will pay you that sum. If you don’t beat these indexes you pay me. I await any takers.

So now I ask you, did your portfolio go down in the last week or 2? Of course it did, just like the rest of the market. Now reread the above article again.

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Now to the markets:
Stocks: Expect more minor rock and roll but no major crash- Stick and keep adding dividend payers on my list.

Gamblers and such: Follow me daily on Twitter for all my daily action. I post everything.

Gold and silver: I still think $1,000 gold, and $15.00 silver is possible before it lifts off to unbelievable heights. Keep adding all thru here. There is a chance the lows may be close however.

Currencies: See my Dream Portfolio for holdings. HOLD all per the portfolio.

Real Estate: Buy bare lots. That is what I am buying but not any lot, only one of kind lots.

Home prices meanwhile will go nowhere now. Very little upside is left with a downside now becoming more likely.

Interest rates: Low and staying there until the end. The nasty end but we are not there yet.

Business in your neighborhood: Flat as usual.

Fed action: Continuing to taper but either will not complete or restart in 2014 or 2015.

War cycle: Expect more conflict.

Inflation: Yes and yes. Making the evening news soon.

Bailouts: Coming next in various assets and all going to the banks of course.

Euro problems: Now rising again as predicted. More trouble across the pond awaits.

 

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What to do: Buy the report below and start making some money. Also get the Dividend List and you high net worth individuals, get the Dream Portfolio as well. Also set an appt. with me asap!

And now here is another way I found I want to share with you to save you money.

Marc goes solar in a money smart way and you can too!

If you’re like most people, you’ve considered solar powering your home at one time or another yet balk at the price of such a system.

I too looked at solar power systems more than once over the last 10 years and each time a solar company came out to my house, the result was a potential cost of tens of thousands of dollars. In my case, systems started at $20,000 for very small array to a more adequate size for my needs exceeding $50,000 or more. After doing the math, sizing up the chances of maintenance and/or breakdowns, the opportunity cost of the money I would spend and how much I would save, the payback of such a system just didn’t make sense.

By the time I paid the system back and started saving, the efficiency may have dropped off, my panels or controllers could require servicing, and knowing my luck, I would have to fix the darn thing for some reason or another and end up not saving much of anything.

That was until I read about a no-cost program from Solar City, the brain child of entrepreneur Elon Musk (touted as the next Steve Jobs) who also started Tesla, the electric car phenomenon and Space X, the private rocket company that now takes up the worlds satellites and services space stations for entire countries and has signed an agreement with no other than NASA.

Their program is a simple one as you would expect from the likes of Musk. The company installs the system at their cost and I mean everything from the equipment to the permits and all costs in between. The company insures the panels and system against damage and promises to fix it if it ever breaks: every bolt, nut, wire and computer chip. The company monitors the system 24/7 from a wireless modem in your house for potential problems and checks efficiency daily. You pay nothing nor touch nothing. For a tech-neanderthal like me that suits me just fine.

The company then bills you a flat rate of 16 cents per kWh. For a residence like mine, where I constantly am paying for electricity in the upper tiers as high as 34 cents or more that’s a bargain as my highest payment to PG&E is in the upper tiers. In my case, I’m looking at a cost savings of over $1000 annually at current rates. With the anticipated increase in rates in PG&E over the life of the system, I look to save even more. Solar City will increase my rates a maximum of 2.9 % a year but compared to potential PG&E increases, that’s a great deal and if rates rise even more, I do even better. To protect their investment I agree to keep their array for 20 years but have no problem what so ever in saving money for at least that long!

If I move residences Solar City will either transfer the contract to the new buyer (who by the way will probably be thrilled to get solar on his new house) or move the system for a small fixed cost. The same applies to a roof repair. They will remove the panels for a small fee.

Although I won’t save as much as a system I might own, I also didn’t pay a dime for my system nor have to maintain or repair it if it breaks. I might add the company has been a pleasure to deal with. Every company employee I have spoken with from the consultant to the people on the phone to the installers were as pleasant as can be. My contractor friends who have visited me have all viewed the installation and all have said it’s a quality installation on all counts.

As a money guy, I couldn’t think of a better way for me to go green without spending any of my hard earned money and the money I save will go instead to supporting my family and our community. And how good is that.

If you would like to contact the Solar City representative who did my system, you can call Andrew Mckibben at (916) 628 5774

 

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Are you new to Money Matters? Download your free show now!

Go to the left menu under “FREE SHOW” and see why we are the fastest growing alternative money show on the radio!

That’s all for now.

The next Money Matters Show airs Tomorrow 8/21/2014 at noon PST. 

Yesterday's show was LIVE AT THE NEVADA COUNTY FAIR Thursday at noon PST (at the KVMR booth) at the NC FAIR and worldwide on www.kvmr.org. Sorry this newsletter was late in getting to you before the show yesterday. Our webmaster had some issues with the site. 

Do you wish to go over your portfolio with me?

Email me, I have some time this month and September!

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 doesn’t work harder than 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