HONEYBEE'S MARKET REPORTS AND BRINKER'S LATEST ADVICE:
STOCKS THIS WEEK: The S&P 500 Index ended with a gain of 2.41% from last Friday and 0.17% gain from yesterday. It is down 1.18% YTD and is 5.05% below its all-time-high record close.
STAY FULLY INVESTED.... On Moneytalk Brinker recommended dollar-cost-averaging for new money - with one exception. Brinker said: "Assuming the market outlook is favorable - obviously we don't know years ahead - yes, I would prefer certainly when you ate in retirement and moving toward retirement to get to that 50-50 goal.....Let me give you a scenario that we don't know will happen. Let's make an assumption that over the next couple of years the market outlook remains favorable. Now we don't know that right now, we have to wait and see, but on that assumption, I would move toward 50 to 60% equity ratio to prepare for an asset allocation that makes sense to me in retirement."
INTEREST RATES/TREASURIES: Closing yield on the 10-year Treasury note is at 2.97%.
BRINKER'S BOND FUND ADVICE.... Brinker said: "I'm comfortable with investing in the 50% of that portfolio that is in the bond market, which is in short duration bonds with an average duration of less than one year...... "
INFLATION: The Consumer Price Index released yesterday puts the year-over-year inflation rate at 2.46%. It is substantially below the 3.76% average since the end of WWII and above its 10-year moving average of 1.64%.....
RECESSION PREDICTIONS:
From Advisor Perspectives (dshort): "The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely......The bond market agrees with the macro data. The yield curve has 'inverted' (10 year yields less than 2-year yields) ahead of every recession in the past 40 years...."
From Bob Brinker's May Marketimer: "....we do not see indications that a recession is on the horizon."
770KKOB;
http://710knus.com/;
TALKSTREAMLIVE
68 comments:
“I am shocked, shocked that there is gambling going on in this establishment” (or that Bob is not on live)!
I heard that the M* people have all new Bob Brinker shows. Do they have a special frequency?
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FoxMolder..... LOL! Ask them if they have tried calling the show. LOL!
Here's the phone number: 1-800-934-2221
Brinker might be watching golf on TV today. There's a rather important tournament going on and Tiger Woods is making a late charge. Looks like Brinker will get two Sundays off this month since Memorial Day weekend is still yet to come.
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BTW: The Brinker-sycophants are calling names and telling me to get lost from the Morningstar site. I will probably oblige them. These bots and/or Brinker's who post lies about Brinker on the internet are totally predictable.
Here's the Morningstar link for anyone who is interested. There are 3 pages now.
Honeybee thank you for your comments. I gave up on BB when I lost $ on his call on QQQQ. He never apologized to people and never allowed caller, who were burned by his predictions to get on the air. I don't listen to his kindergarten advice and monologues about young sprouts. He started well but probably as he got a lot of $$$, he become laizy.
Can anyone recommend a brick & mortar discount broker that will make trades and not be pushy generating comission or high fee activity.
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Note to all posters:
I have taken a look through the comments posted last week, and most of them were posted with Google accounts.
Due to the fact that one or more detractors are harassing me almost constantly in spite of the changes I made, I am on the verge of allowing only those with accounts to send comments.
If I do that, they will be totally cut off from calling me names like "c...t" or "b...ch" or sending me political garbage.
I believe that the detractors think that if I do that, it will affect the number of hits this blog gets. They are 100% WRONG.
If anyone without an account really wants to reach me, my email address is available.
BTW: The Brinker-sycophants are calling names and telling me to get lost from the Morningstar site. I will probably oblige them. These bots and/or Brinker's who post lies about Brinker on the internet are totally predictable.
I am kind of curious about that. you would have to be frickin' mentally retarded to think Brinker is anything other than a total shyster if you examined his actual track record.
So given that, is the supposition that these are paid trolls? Brinker is well known to post to manipulate forums so I suspect he simply has hired it out.
What a scam.
If I do that, they will be totally cut off from calling me names like "c...t" or "b...ch"
Dearest Hottiebee...
You must know by now what the real issue is...males are eating too much soy these days. I bet a lot of these effeminate gender bender types sending you hate mail are simply insecure about their stunted manhood. Face it, there is nothing that diminishes the ego of femmy-boys than a red hot all American woman such as yourself; you rapidly make them keenly aware of what they lack in the male department.
Heck we have already established you are single handily responsible for the proliferation in interest of MILF sites on the Internet...you simply spark the interest of the male of the species.
Unfortunately these sensitive Alan Alda fem types know they could never have a real woman like you so they lash out with their hatred. Note the type of words they use, citing that which they both desire, fear, and know they can never have.
Heck I bet half of Binkey's income from his witless rag goes directly to Women in Lace dot com or whatever.
Sometimes the truth just needs to be spoken.
Love,
tfb
rasputin here - Hey Honey!
Wasn't part of the show a repeat? That woman and her son who wanted to buy the million dollar California house as a starter home to rent out and she was thinking of co-signing the loan?
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Rasputin...Hi! Nice to hear from you. Yes, the whole program was rerun monologues and spliced together old calls.
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Note to Rasputin and TFB and others who want to post comments, but don't want to get a Google account:
Send them to me via email. The email is just above the window that you write in.
test
To Hillary,
That is also when I bought qqqq on brinker's advice. I think I lost ALL the money I had put in QQQQ. Did they go bankrupt?
That scared me so much that I NEVER got into the stock market or stock market funds again until this year.
natasha here
To all,
Even though I suppose it was a recorded question, I would like to hear your opinions on BB telling a lady that if she is in retirement,and has plenty of money to last her through her life, then the money that she expects to go to her children upon her death she could put in Portfolio 1 or 2.
I had never thought of that philosophy.
For those of you who might expect money will be left to you as an inheritance, what do you think of that?
For those of you who might expect to leave money to your children upon your death what do you think of that?
Honeybee: Here's my first attempt using my google account. I don't post often, so it's not a big deal to me to have to login.
Call me paranoid, but I generally don't like submitting credentials for another site if I can avoid it. But I'll make an exception for your site as it looks legit.
Herb: You didn't say what you are looking for in a brick & mortar discount broker. Since you didn't specify your location, I don't know if this will help.
I have accounts at Charles Schwab and E*TRADE. Both are discount brokers and both have offices located in several cities around the US. I don't think they provide stock recommendations or managed accounts if that's what you are looking for.
I've been to the Schwab office in Bellevue, WA a couple times in the last decade. I have an assigned Account Rep, but do all my trading online. He sends me e-mails occasionally to invite me to presentations or with links to articles in response to events in the markets. He doesn't pressure me to make any trades. I assume he would refer me to someone if I wanted more help managing my accounts or to learn how to trade more actively. He must get alerts when I call the 800 number because he calls me to see how I'm doing shortly after I call the 800 number with questions.
I've never gone to the eTrade office in Seattle. I used to get calls and emails a couple times a year from my Account Rep to touch base and see if I needed anything, but nothing I would call pressure.
I don't think the account reps are brokers, so I don't think they get commissions and don't need to sell me anything.
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Les...I appreciate that you set up the Google account.
I have had one many years - required to have the blog - and I have never had an issue of any kind.
Matter of fact, I am using my Google email almost as much as I do my "private" email these days because it is so reliable.
If this change goes well, I may even be able to safely let all blog comments post directly and not have to come through me.
I seriously doubt that the "detractors" would chance using an actual Google account to send some of the libelous and even threatening things that they send.
IF I decide to do that, it will make it much nicer for all of us.
You really are ignorant.
I've been watching all this Honey, and good luck with it!
Natasha lulu said:
"I would like to hear your opinions on BB telling a lady that if she is in retirement,and has plenty of money to last her through her life, then the money that she expects to go to her children upon her death she could put in Portfolio 1 or 2.
For those of you who might expect money will be left to you as an inheritance, what do you think of that? WOULD BE OK WITH ME.
For those of you who might expect to leave money to your children upon your death what do you think of that?" ALSO OK WITH ME.
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Note to all:
The post by Kilgore Trout (just above Bluce's) is the reason that I cannot open up comments to post without moderation.
I will leave that post to show the extent "they" will go in order to get out their mentally-sick hatred.
Anyone wonder why they go completely insane and we have mass killings?
That is the last one of Kilgore Trout's slimy posts that you will see here.
HB, sorry that there are so many trolls who are abusing you.
Just know that you are loved and followed by many. I, for one, really value the perspective and the historical background that you give on the Brinker show.
Don't let the boo-birds get you down!
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Hi Stinky...Thanks for the encouragement.
I deal with the "boo-birds" the same way I always have - I cut them off at the knees (figuratively speaking).
Requiring a Google account will make doing that job much easier for me, even though it isn't fool-proof against obsessed sickos - as "Kilgore trout" proved.
But no worries. He can continue to spend his life letting me live rent-free in his head - but he'll never post here again.
Stinky: Good post, I agree.
Are you going to continue "setting the record straight" on M*?
Thanks, Bluce.
I definitely will continue to set the record straight over on Morningstar. (And defending the honorable Honeybee's honor, which has been challenged several times.) The conversation has gone a lot longer than I thought it ever, and it reached 50 messages earlier today. We'll never convince the "true believers" about the real Brinker, but maybe somebody who casually stumbles onto the M* thread will read it and be better informed.
Others are welcome to join in the conversation on M*.
There was a great suggestion earlier today that Brinker could be replaced by an AI system. Call it the "Brinker-bot". It would be capable of live-hosting the broadcast. And, per the post, it would likely be more interesting, informative, and get better results for callers and the audience than the current host.
Something Strange is Happening With the US Economy
America's budget deficit and unemployment rate are heading in opposite directions — something that's never happened during post-World War II peacetime and could cause a significant jump in interest rates.
Goldman Sachs projects, for instance, that the 10-year Treasury note could be yielding 3.6 percent next year.
The deficit increase is coming due to the recent barrage of fiscal stimulus from Congress, including a $1.5 trillion tax cut approved in December 2017 and a $1.3 trillion spending bill aimed at keeping the government operating through the end of the fiscal year.
Normally such moves would come in the early stages of an economic recovery. The U.S. economy, though, is in the eighth year of its post-financial crisis expansion, middling as it has been.
The unemployment rate is now at 3.9 percent and falling, while the budget deficit was at $668 billion in 2017 and is expected, according to the Congressional Budget Office, to top $1 trillion by 2020. That's a dual phenomenon that is highly uncommon in the U.S., according to Goldman economists….
The only times since World War II that the deficit has risen while unemployment has fallen occurred during the Korean and Vietnam wars. An expanding economy normally would help drive down the deficit, but that hasn't been the case as government borrowing continues to grow.
While Fed officials profess to focusing on full employment and price stability, they've also been public with their fears about the deteriorating fiscal situation.
Goldman estimates that the fiscal stimulus will boost the level of debt to GDP from 4 percent currently to 5.5 percent by fiscal 2021….
However, the deficit otherwise has been growing and is up to $382 billion in fiscal 2018, a 10.7 percent year-over-year gain.
"The unusual increase in the deficit is even more surprising because it comes at a time when the federal debt-to-GDP ratio is already approaching historical highs," the economists wrote. "The resulting increase in Treasury issuance will require the public to absorb considerably more government debt in coming years."
The rising deficits likely will be responsible for 30 of the 60 basis point rise that Goldman is predicting.
In Fed terms, that's the equivalent of more than one quarter-point hike, at a time when the central bank is projecting a total of three increases both in 2018 and 2019.
Cleveland Fed President Loretta Mester, in an interview with CNBC's Joumanna Bercetche, said the U.S. needs to pay attention to its growing debt load — at $21 trillion and counting — before it gets "out of hand."
Source: CNBC
Deficit spending is systemic problem within the deep state. We may be close to Constitutional crisis if D.C. betrays the historical future of country. Our ancestors could not have imagined our political state being so corrupt and selfish as to put the country in long term danger for their easy political life of the few. This is a nonpartisan problem as both sides are guilty. Yes, the politics are that vicious within our modern era. Currently, concerns over country is beneath concern of political power. We have politicians that knowingly hurt our war effort, spending disease, and obstruct every positive development within good governance just to "win" party popularity. Note, this is not just a difference in parlance, but actively damaging counties future as to blame the other side of aisle. Sad. We do have good representatives that work hard but we need to out the bad players and stop the nonsense of protecting the bad ones just because they carry the political flag.
Lowering tax revenue is not the problem. Untethered spending is and growth of fed power. We need to cut GNP spending within federal government. Federal expenditures are always low efficiency and includes high waste and poor value to citizen's enjoyment of life. Use federal wealth sparingly and judiciously. Figure out better ways that empower private sector to meet society needs. The private sector allows citizens to vote with their hard earned money. Solutions (if allowed) will improve cost, quality, and choice over time.
What exactly is a constitutional crisis? Is it worse than a financial crisis? Would gold shoot up? Is human nature capable of denying themselves luxury in the present to secure a better future?
To J Wales: A "Constitutional Crisis" is like pornography: Impossible to describe but you know it when you see it.
Is human nature capable of denying themselves luxury in the present to secure a better future? J, of course they are! Jeepers... you're commenting on a blog dedicated to saving and building wealth for the future!
Is human nature capable of denying themselves luxury in the present...? Jeepers wales, this is a blog dedicated to saving and investing so we can build wealth for future use!
Its all connected isnt it? Behavioral science is used to explain market activity money oriented decision making. Did I jump the shark?
Source: MIT Technology Review
By-line by Paul Solman
If You’re Rich, You’re More Lucky Than Smart
A study that claims the predominance of luck over talent in the distribution of wealth has been mathematically confirmed. Two Italian physicists — Alessandro Pluchino and Andrea Rapisarda — and one economist — A. E. Biondo —make the case, and they’ve got a computer model to back it up.
The economic inequality data are so familiar by now that they’ve lost the ability to surprise: the world’s richest 1 percent control almost half the world’s wealth; the richest eight men have wealth equal to something like 3+ billion of the world’s poorest.
The most common explanation is that the wealthy have earned it, whether by IQ or intelligence or talent, virtuous hard work (Horatio Alger) or sheer rapacity (The Wolf of Wall St.) Or all of the above, though it’s kind of tough to be both virtuous and rapacious.
“The largely dominant meritocratic paradigm of highly competitive Western cultures,” write the authors, “is rooted on the belief that success is due mainly, if not exclusively, to personal qualities such as talent, intelligence, skills, smartness, efforts, willfulness, hard work or risk taking.”
“Sometimes,” the authors concede, “we are willing to admit that a certain degree of luck could also play a role in achieving significant material success.” But — and here’s their bottom line — “as a matter of fact, it is rather common to underestimate the importance of external forces in individual successful stories.”
Look, they write, we take it for granted that intelligence, talent, personal qualities, are all “normally distributed.” That is, there are roughly as many super smart people as super slow ones (with most of us in the middle); roughly as many great athletes as stone klutzes (with most of us in the middle); as many Mother Teresas as Jack the Rippers (with most of us in the middle); as many midgets as giants; and so on.
Yes, it’s the good old “bell curve”: the “normal distribution.” Most human traits are arrayed along it. But wealth, the authors write, follows something called a power law, also sometimes called the “80/20 rule,” with a vast majority of poor people and a very small number of billionaires. The richest eight men having wealth equal to something like 3+ billion of the world’s poorest would be an extreme but telling example.
But think about it, the authors suggest. If smarts and talents and even effort are so normally distributed and wealth is so abnormally distributed, what’s missing to explain the disparity?
“We suggest that such an ingredient is just randomness,” write the authors. “In particular, we show that, if it is true that some degree of talent is necessary to be successful in life, almost never the most talented people reach the highest peaks of success, being overtaken by mediocre but sensibly luckier individuals.”
The practical implication is pretty clear: “It underlines the risks of distributing excessive honors or resources to people who, at the end of the day, could have been simply luckier than others.”
The source links are provided for those who want to “get into the weeds” of the analysis.
Looking at "wealth" a different way:
A more accurate measure of wealth is the value of assets owned compared to one's earnings over recent decades, or a lifetime.
Someone who averaged, say, $40k per year in wages for the last 20 years but has a net worth of $1M might be considered wealthy compared to:
Someone who averaged $250k over the last 20 years but has a net worth of $2M.
Bluce: your point re: “wealth” is understood. The frugal individual has more to show at the end of his/her investment horizon, per dollar earned, than the individual who had an income more than 6 times greater, yet only had twice as much to show at the end of his/her investment horizon.
Perhaps a suitable sub-title for the article would have been:
"Life is like a box of chocolates. You never know what you're gonna get." -- Forrest Gump
The article focused on the randomness of good fortune vs. bad fortune in achieving success. To repeat, “In particular, we show that, if it is true that some degree of talent is necessary to be successful in life, almost never the most talented people reach the highest peaks of success, being overtaken by mediocre but sensibly luckier individuals.”
The source article goes into greater detail on this matter, but consider just a few examples of original randomness of dumb luck that has opened opportunities for more than a few fortunate folks.
1.Born into a great zip code (superior schools and teachers, low crime)
2.Born male (think most CEO’s)
3.Born Caucasian (think White privilege)
4.Born with a prestigious surname (ivy league or military academy entitled?)
5.Born with genes that would cause one to grow taller and more handsome and healthier than most (pick your favorite statesman, or business leader or actor)
The above are just a few out-of-the-gate advantages that come to mind over the competition – that one can’t predetermine – at least at this time! Sure, one could squander all the original random good fortune and wind up living on the street.
So to sum up: ” But — and here’s their bottom line — “as a matter of fact, it is rather common to underestimate the importance of external forces in individual successful stories.”
Wow & I thought I was off the beaten path. Allot of factors go into financial well being. Its pretty complicated. Living beneath your means is pretty important. But anyone can get wiped out by circumstances beyond their control. The stock market is acting differently mostly due to fed intervention. I don't see how BB or anyone else could give much useful advice regarding stock prices. Uncharted waters are where we find ourselves. Reserve your seat on the lifeboat.
Testing HB. Haven't posted in a long time.
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Hi Bob....Looks A-Okay. :)
I have a question about Vanguard Wellington fund maybe someone can help me with. I know in the past people have recommended it. It's 32% bonds with an average duration of 6.3 years. Is this fund a poor choice going forward considering the rising interest rates? Also, it dropped in value quite a bit the day after dividends were paid in Dec 2017, and I think I recall previous years also. Is there a reason for this?
Thanks. Novice investor here with a large portion of my investment in this fund.
Is that "Bob," "not THAT Bob," or the real "Bob"?
natasha here
re: wellington. Bob brinker says at this time only have fixed income with a duration of 1 year or less.
I am stuck with cd's earning 2% for 4 years and great big early withdrawal fees.
But I certainly know nothing.
Alan,
That Wellington fund appears to be down slightly YTD because of those bonds. I'm sure Bob Brinker would not recommend that fund at this time. It's not unusual for the share price to drop when dividends are paid because some funds are designed to make the dividend payments off the share price.
Go stinky and JC!!
The ignorance, or the inability of some to accept facts that are at odds with one's beliefs, are astounding. And it isn't even about politics.
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Yes Bluce! Go Stinky, JC and now Paul! :)
Alan: I just looked at its duration and Morningstar says 6.6. My guess is the duration will act as a headwind against the share price while we're in the rising interest rate stage. That said, this fund has a very good long term record. The best place for it is a tax sheltered account because it pays out dividends and capital gains which can be unpredictable from year to year.
Yes, the Wellington Fund's bond holdings will suffer some decline of current market value in a rising interest rate environment, especially with that 6-year duration number.
But don't worry. During the projected recession in 2020 those ugly-duration bond funds might reap some market value as the stock market retards into a bail-out scenario.
It always happens. The big-money managers rush headlong into Treasuries to save their total-return reputation for the quarterly reports, and their resulting demand creates a seller's market in bonds. "Pay the price or walk." So they pay it and get much less yield versus the coupon rate, which pushes up the market value of the bonds in your Wellington Fund.
That fund has been around as long as the Wright Brothers. Currently using it for my g-daughter's education savings. However, the term "long" is relative. Check this.
Back in 2003, the 100-year anniversary of the Wright Bros. first flight was celebrated. Saw an interview with Chuck Yeager, who broke the sound barrier in 1947. Chuck said, "Yes, I met Wilbur Wright at an Air Show."
Well, Wilbur passed away in 1948, however Chuck Yeager is still alive and walking among us. He's 95 years old, but the point is a guy who met one of the Wright Brothers is still kicking.
Just shows how young aviation really is. Amazing progress in the 20th Century.
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Stan... Thank you for sharing that fascinating aviation history.
It really brings into perspective how the world has changed in just a little over 100 years.
It's unimaginable that from the time the Wright Brothers were making their first flights that we have gone so far into space.
Thank you Bluce and HoneyBee. That initial question about Brinker on Morningstar has now generated 71 responses. Amazing how many folks seem to be willfully blind to Brinker's deception - and some have been pretty ugly to HoneyBee.
I'm about through with the M* thread for now. But I may resurrect it when Brinker is not live without proper announcement.
Those who tell the truth won't convince the died-in-the-wool Brinker-bots about his deception - in fact, just giving them facts seems to drive them crazy. But any newbie searching M* about Brinker will be able to learn the truth, and make an informed decision.
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Stinky...You hit the nail on the head. The Brinker Bots and the Brinker's, do not want the factual truth posted - no matter how delicately it is told.
They always attack me, and the truth is, their insults are mild compared to what I have gotten over the years.
They want to drive us off so that anything they say, no matter how misleading - or downright untrue - can stand as fact.
Notice how they totally ignore that Brinker never announces when Moneytalk is reruns. If they addressed that and called it honest, they would look foolish.
Natasha here
hi all,
what do you do for investment advice? Do you listen to a particular person on Bloomberg television or what? Any ideas for someone who likes to "LISTEN" better than reading? If you can tell me, I would love to try them.
Thank you. Thank you honeybee.
Natasha: JMO, but most radio investment people are really trying to sell something. Not that there isn't a lot to be learned from some of them, but there is much more to be learned by reading.
Even if you don't like to read, if you could only choke your way through 2-3-4 of the timeless, classic investment books you would learn just about all you needed to learn, and wouldn't have to read anything else after that.
US 2-year Treasury Yield Climbs to Highest Level Since August 2008
The yield on the benchmark 10-year Treasury note and the yield on the benchmark 30-year Treasury bond rose to new multiyear highs early Thursday as a streak of solid economic data continued.
Short-term rates also topped multiyear highs: the yield on the two-year Treasury note reached 2.598 percent, its highest since August 2008, and the yield on the five-year Treasury note hit 2.957 percent, its highest since June 2009.
The yield on the benchmark 10-year Treasury note climbed to 3.122 percent Thursday, its highest mark since July 8, 2011, while the yield on the 30-year Treasury bond hit 3.248 percent, its highest level since July 13, 2015.
The 10-year Treasury rate is especially important given its role in helping set rates for a whole range of business and consumer loans, including home mortgages.
The Federal Reserve, which seeks to balance goals of maximum employment and stable prices, has forecast an unemployment rate of 3.8 percent by the end of the year.
Rising inflation, which threatens Treasury prices because it erodes the purchasing power of their fixed payments, puts upward pressure on rates.
"For the bond investor, it is proper to use the word 'ugly' when describing inflation because that's the real Achilles Heel for the bond market," wrote Kevin Giddis, head of fixed income capital markets at Raymond James. "For a number of years, even after the U.S. economy recovered, jobs were created, and stimulus came to an end, inflation was the one variable that economists and the Fed couldn't put their finger on."
"Well, I think we have arrived at that point," he added. "There is little to stand in the way of a test of 3.25 percent on the 10-year note."
Earlier inflation expectations led to a rise in interest rates in February, sparking a widespread equity sell-off as stock traders grew nervous over whether the economy was strong enough to withstand increased borrowing costs.
Investors are betting the Federal Reserve will keep its aggressive stance even if it unnerves financial markets a bit. Traders for the first time Monday assigned a 51 percent chance of a fourth interest rate hike this year by the Fed, according to the CME Group.
Source: CNBC
Natasha: Check out "Animal Spirits" podcast by Ben Carlson. Someone here on HBBBB posted this back some. He is a Millennial with good lifetime experience. He has an excellent view of the financial industry. What's important and what's dishonest. His information has gradually moved my thinking. The financial industry is fraught with hype, miss information, and cost. He doesn't offer personal advice, but does have investing firm for a fee. Seems the biggest challenge to investors is to overt the typical newbie mistakes. His last episode had a quote from an old financial expert that went something like this. You can get rich by working harder than anyone else. This is physically exhausting. You can be smarter than most, but this is mentally exhausting. You can stay in stock market longer, but this is emotionally exhausting. Of the three it is easier to get rich by staying in the market longer.
Ben, said this was Buffets magic for wealth. He never sold. Buffet once said to invest in the S&P 500. That's it. Stay, stay and stay. No bonds, no rebalancing, no derivatives/hedges, gold, EM, small cap or lazy portfolios. The VTI BB suggests is mainly this. My self education to date on the topic of finance; I see this approach may be superior with least risk. I can't see envision a better simpler plan to making a good return.
The podcast had commented on article of a secretary that was worth $9.9 million after death. She enjoyed a typical lifestyle and no one knew she was rich. She had invested for 64 years. Upon review of what it would take to make $9.9 million during her lifespan. It was $600/yr starting out and keeping that inflation adjusted average investment.
Bluce said...
.....but there is much more to be learned by reading.
Even if you don't like to read, if you could only choke your way through 2-3-4 of the timeless, classic investment books you would learn just about all you needed to learn, and wouldn't have to read anything else after that.
May 17, 2018 at 7:00 PM
++++++++++++++++++++++++++++
Bluce,
What are the 2, 3 or 4 best ones to read, in your opinion?
thanks
Robert
Robert: Ha, well the gauntlet has been thrown down! I had to dig through my extensive unorganized library, in which the majority of books are not about investing.
The single best one, IMO, is "The Four Pillars of Investing," by William Bernstein. I can't find it, then I remembered I loaned it to my buddy's kid who I've been trying to help out. I gave him that book and another one almost a year and half ago, and he's done nothing. It's the second time I've tried with him, and I'll have to ask for the books back. But anyway, that book's on the top of my list, and that's why I gave it to him.
Next, in no specific order, "Winning the Loser's Game," by Charles Ellis; "A Random Walk Down Wall Street," by Burton G. Malkiel; "Die Broke," by Stephen Pollan; "The Bogleheads' Guide to Retirement Planning," by Larimore/Lindauer/Ferri/Dogu.
I have a couple of Bogle's books, but as I recall, I didn't care for them because they had way too many charts in them.
At any rate, what I have gleaned from all those and others, and what I read online (Larry Swedroe, Jason Zweig, etc.) is to construct your portfolio with an asset allocation you are comfortable with. There are numerous guides and ideas for this. If one is young, then you should be nearly all in stocks. Maybe ten years from retirement, cut back to maybe 75-65% stocks, the rest bonds or other fixed, and on it goes.
Also, very important: Don't jump in and out of the stock OR bond markets attempting to time them. Don't get wrapped up in which is in favor now? -- value vs. growth, small vs. large cap, sectors, etc. Just buy a total stock market fund and let 'er run, buffering the volatility with bonds, cash, or CDs as you get older.
AND DON'T LISTEN TO ANY OF THOSE CLOWNS ON TV. As somebody tagged it, it is nothing but "investment porn." LOL
tfb, call me mentally retarded if you like. I don't think Brinker is a TOTAL shyster as I believe he does offer a lot of sound investment advice. But, yes, he does have a shyster streak in him as evidenced by pretending he can time the market and not informing his radio audience on days he broadcasts reruns.
I second the motion.
MK writes:
I don't think Brinker is a TOTAL shyster as I believe he does offer a lot of sound investment advice
The only problem with your rater truthful observation is you need a great deal of knowledge to know what of his advice is sound or B.S.
For example, are you aware Da Brink es to recommend funds that had rather hefty expense ratios? Two spring to mind of the top of my head were the Rydex QQQ with over a1% ER and Baron Small cap, with over a 1% ER. Da Brink is a rather new convert to low cost index funds.
His reflexive, lousy advice to roll over 401K plans to self directed IRAs which is simply irresponsible.
Or how about his advice to commit tax fraud (Beky the baby sitter).
My point is, you need to know what advice is sound in the first place to gleam actual value and avoid the bobby-traps. The problem is,Brinker is fundamentally dishonest, he has no integrity.
Or on the other hand you could follow the advice of someone like Saint John Bogle. As far as I know he has never exhibited anything other than honor and integrity.
Cheers...
tfb
Bluce said...
"The single best one, IMO, is "The Four Pillars of Investing," by William Bernstein.....
Next, in no specific order, "Winning the Loser's Game," by Charles Ellis; "A Random Walk Down Wall Street," by Burton G. Malkiel; "Die Broke," by Stephen Pollan; "The Bogleheads' Guide to Retirement Planning," by Larimore/Lindauer/Ferri/Dogu......
Don't jump in and out of the stock OR bond markets attempting to time them
Just buy a total stock market fund and let 'er run, buffering the volatility with bonds, cash, or CDs as you get older.
+++++++++++++++++++++++++
Thanks Bluce.
Some excellent book choices.
I guess Brinker has a different opinion regarding attempting to time the market.....Marketimer!
Although I don't think he has done a very good job with his market timing.
As far as I know, Brinker is only "one for two" in his outright market timing calls. His first call was wrong......his second one was right.
But his advice to dollar cost average has been wrong the vast majority of the time. Subscribers and Money Talk listeners would have done much better with lump sum investing than dollar cost averaging, as the overall trend has been up way more often than it has been down.
You mentioned Larry Swedroe.
Just a note that Swedroe really doesn't believe in buying a total market index fund.
He's very big on factor investing.
He's a small cap value guy......
There's even been a portfolio named after him, The Larry Portfolio......where all the stock money is in small cap value
Thanks for your great reply, as usual, Bluce
Robert
In reference to Bluce's reference book read, "Die Broke". The podcast I referenced had mentioned a study of retirees running out of money. It doesn't happen. It's a myth and to my suspicion this falsehood is perpetuated by finance industry and those that want the workforce to stay productive paying taxes and picking up the tab for deadbeats.
It seems within reality of human nature, retirees will adjust spending to accommodate their savings and do so particularly in recessions. They usually die with much of their savings on the table. Why? Come to find out, it is very hard to flip from a saver to a spender. If you had a lifespan a frugal living it is extremely unnerving to suddenly enjoy spending and lack earnings. One feels better to have a fire stop of resources for emergencies and we refuse to admit to the lifespan limits/percentages. This is why an annuity is so attractive to happiness. Dare I continue to hype the value of maximizing SS benefits?
Total (including human nature) investment knowledge is critical to lifespan happiness. The financial experts that have or get this, are of top value. The total value of money and the happiness it accomplishes. For example, should youth invest their time and money in stocks or bonds? Really? This is choice is extremely naive. A better choice would be career, books, Dave Ramsey, and Mr Money Mustache articles. Dave Ramsey said once said he thought his financial advice partakers probably resulted in many times more millionaires that all the hyped financial investment gurus. I think he is right. Mr Money Mustache has simple investment advice. He explains why so many have the wrong attitude and puts the time value of money to the task of driving home why these decisions should be of paramount concern of all the young.
Don't get me wrong with increasing one's knowledge of investing and worth of good books and websites such as HBBBB's. It's very worthy if and when you have accumulated savings. However, the more important aspect is the overall lifespan of our resources and wisdom is to maximise happiness. The good advice/experts will always offer life philosophy lessons learned. Cost of living control, part time work retirement contributions, health, religious insights, time value of money, and human relationships. Our most precious asset is good health and to accomplish FI to maximise life choices for happiness. Extra money is no guarantee of extra happiness nor is extra spending. Learning best and most powerful life lessons as early as possible and guiding ones life to achieve maximum happiness is.
natasha here
Hi again.
Thanks for all the advice. I am going to look at the four pillars book and if i think i could get through it, i will buy it used. Also I am going to go to the blog. About time I learned about these bloggy deals.
THank you all for your experiences. They are very helpful.
When I opened an account at SCHWAB a few weeks ago, they were giving away books written by schwab's daughter. It has an index of terms that is handy to have on the coffee table. You know who I listened to on tv? SUZY somebody or other. Anyhow, soon I shall trot to the bookstore to look at that book. I am not a chart reader.
If the VTI goes to 126 I am putting 10 percent of my money into it.
Oh in one breath people show you historical charts (which never seem to have the axes LABELED, (what is up with that?) . Then in the next breath they say past performance is not an indicator of future performance. SO SKIP THE CHARTS ALREADY!!! See what I mean?
Anyhow, I'll have looked at that book by the end of the week. And also looked at the pod by the end of 2 weeks. Anyhow, the comments given here REALLY are helpful.
Hey, did any of you listen to the tapes or read the book THE BEARDSTOWN LADIES?
It was an investment club story? I found the set of tapes in a give away box while I was on a FREE and terribly enjoyable walk the other day going for a fifty cent senior coffee. What do you think of the BEARDSTOWN LADIES?
Natasha:
I remember the Beardstown Ladies now that you mention them. There was a big splash about this investment club's performance, then upon closer scrutiny ... not so much.
https://en.wikipedia.org/wiki/Beardstown_Ladies
"Past performance is not an indicator of future performance" is language intended to protect the author, publisher, website, whatever -- so you're going to see it everywhere.
Robert: Thank you for your kind comments.
The world as I see it, lol:
Regarding dollar-cost averaging: Something about it hit me some years ago, and it was not a bad thing! When you get to, or are approaching, "critical mass," averaging in a monthly amount doesn't really change anything because it's such a tiny percentage of the total. When young and you don't have a large asset-base, then yes, averaging in 2-3-5 hundred dollars a month is good. Been there, done that.
Now, I put a few chunks throughout the year into cash (SEP-IRA) and max it out when I get my taxes done in the spring. It all goes into cash, but at some point I'll do something with it to keep my asset-allocation in line.
Swedroe: Gotcha on that, but he's just one of many I read off and on and take what ideas I like and ignore the others. Like with Bogle, who sees no point in holding international stocks. There is no right or wrong, but I do have about a quarter of my stocks in int'l, so I'm certainly not following all of HIS advice. At any rate, I guess I'm (mostly) a "Modern Portfolio Theory" buy-and-hold guy -- at least my version of it.
LOL @ "The Beardstown Ladies," and how NOT to figure out your total returns.
tfb: I do tend toward Bogleism as my investment style although I'm not a purist.
For example, I held the Black Rock health care fund for many years in my retirement portfolio. It had about a 1% expense ratio but the returns were excellent. I attribute much of that to Obamacare. I was against that legislation. But it became law and I figured the trend would be toward higher stock prices in health care. I like low expense ratios but if I figure a fund's performance will offset it's high expense ratio, I don't mind paying the high expense fee.
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