Money Update July 27, 2013

Marc's notes:

Well another ho hum market. Gold is making a comeback although I think one more rout is due to make a double bottom. It is not required but usually is typical in these sell offs. Add any positions over time of course. Oil is finally backing down a bit. Good, I hope it continues down. High Gas prices are coming due to the recent spike in crude. Prepare.

Also prepare for an Israeli strike on Iran soon. It will be ugly.

Ben Bernanke has successfully eaten his words on ending QE so now the market runs again. Look for a quick fall to wash out the weak soon but it was fun watching Ben have to back peddle on his QE ending thing. We warned you he could NEVER end QE. Just the mention of it caused a major wreck in stocks last month. Proof the markets are addicted to his free money.

Look at this! The adjustable rate mortgage is back. (ARM) 16 % of new loans are ARMS. And HOUSE BIDDING WARS are back! Lordy Lordy, we never learn. Now you tell me, if we do the same thing, what do we eventually get?

By the way, land lots are CHEAP, CHEAP, CHEAP but watch out for high metals content in your soils! I am learning about this and may do an article on this soon! Test your SOIL (not your water) and prepare to be shocked (possibly) as there is more to this then you have been told.

A new Market Safe CD is coming! Keep tuned. Also SWISS ANNUITIES are closing as of AUGUST 15th, 2013! Email me immediatly to get your money OUT OF HERE asap or miss the window!

Here is a link to great rates from our friends at Everbank. I don't like all thier products but do like these.

 Everbank promises high rate savings and money market funds. Click here to read all about it and get the best rate I know about.

 You can use the below links to open the right accounts:

 Checking: http://adfarm.mediaplex.com/ad/ck/13305-85986-43235-1?referid=13286

 Money Market: http://adfarm.mediaplex.com/ad/ck/13305-85986-43235-0?referid=13286

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I found a great article on one of my favorite topics from Real Wealth, take read. I didn't pen this but is falls along what I agree with:

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The financial industry is adept at keeping its customers in the dark about what they are spending.

There are plenty of regulations in place that are supposed to make such costs transparent, but most of the disclosures are in small print and peppered with legal terms.

I'm not suggesting that all fees and charges are unfair. In fact, decades of consumer advocacy have reduced the number and types of tricks brokers, financial advisors, and money managers use to fleece their clients.

But there are still things to watch out for…

Some money managers and financial advisors provide a range of financial services, including asset allocation, stock and bond recommendations, reporting, and so on.

Most of them will charge you a fee for financial advice. Some will also collect commissions on any transactions.

One of the biggest problems with money managers and financial advisors is that they have a predisposition for mutual funds. They like mutual funds because they are easy. But as you know, mutual funds are very expensive.

And that's not all… With a money manager, you are likely paying other fees, too. My colleague Tim Attested, the editor in chief at The Palm Beach Letter, has a good friend with a UBS-managed account. Tim studied the fine print and this is what he found:

The fine print showed other fees that were impossible to decipher:

So Tim's friend is paying 2.44% in disclosed fees – and he may be paying even more if you consider the hidden or hard-to-decipher fees.

There is an argument to be made that fee-only financial advisors and/or money managers are better because you don't have to pay transactions costs. This is not necessarily true. Your account could be billed for certain transaction costs separately. The money manager doesn't receive this fee, but you pay it.

The only way to know what you are paying a financial advisor and/or money manager is to write them a letter asking them to disclose all costs clearly and fully.

If you use a money manager or financial advisor, you should expect him to be completely forthcoming and transparent about what you are paying. If you aren't sure, the first step is to ask him in writing, "Please send me a clear and comprehensive account of all charges, fees, commissions, and other costs I am paying for your service."

And ask him to copy his manager on that message.

If you are ever told, "There is no commission on a purchase," you are speaking to a liar. It may be true that no actual commissions (as defined by the industry) are being charged, but you can be sure that there are other charges, either embedded in the transaction or put through to you as "management fees."

As with stockbrokers, there are some situations in which you may be happy to pay the fees they are charging. And there are certainly financial advisors and money managers who are smart and caring and do a good job.

But you need to know exactly what the costs are – immediately and over time.

Then, and only then, can you decide if these sorts of services are good for you.

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Well said!

Any way, another Money Show is on this Thursday so tune in! Also see me at the fair the first Wednesday at 10:00 am to 2:00 pm at the KVMR booth.

Now enjoy this next article!

What happened to the promise of progress?

The promise of progress was never kept.

Assembly line manufacturing, incredible progress in technology and computing, better chemicals for food production and advances in everything from information gathering to energy exploration was all supposed to improve our lives, enable us to work less and spend more time at the beach or with our children.

We got all those improvements in technology and we have surpassed even our wildest expectations on how to get things done yet the instead of working less and having more leisure time, we now have to work more, work longer and the quality of life has deteriorated for more Americans then ever before. “Real income” (what you can buy with your dollars) has actually decreased over the decades where now the average working man is making less then he was 40 years ago.

The advancements were made and we now make things cheaper and in more quantities then ever before yet the average Joe has less.

What happened? Where are the rewards we were promised for such progress?

The promise was stolen plain and simple. Stolen by an economic reality repeatedly foretold and reiterated in almost every economic text book in existence.

The reality is called monetary inflation and it is brought about solely by any and all institutions that control the money supply of a population.

Put simply, create more currency (in our case US dollars) and the prices of everything within the borders of that currency rise (inflation).

Most people know what inflation is but don’t understand the reality of how it works and the reality is this:

Inflation affects everything priced in the currency so prices of everything rise. The caveat is WAGES never increase as fast or in proportion to the increase in all the other prices around it. In other words, as prices rise around you (including your wages) you perceive you are keeping up, but in reality wages never increase at the rate everything else does. It’s like running a race with a car. The longer you run the race, the further behind you get.

Because most people don’t understand this fact, they have no idea that every day there is inflation (and there is every single day) you fall further behind. Those creating the currency don’t want this simple truth exposed for it would put a halt to the policy.

A reality that made Henry Ford utter these words: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”.

This article expresses the opinions of Marc Cuniberti. Mr. Cuniberti hosts “Money Matters” on KVMR FM 89.5 and 105.1 FM on Thursdays at noon. He has been featured on NBC and ABC television and on a host of made for TV documentaries for his economic insights. His website is www.moneymanagementradio.com