I had to post this funny skit spoofing Suze Orman!!
Friday, March 28, 2008
Stocks Tarnished By 'Lost Decade'
Interesting article about how stocks have been flat for most of the last decade - however it doesn't mention that a diversified portfolio has an average return approaching 10% for the past ten years (100% in stocks).
Not a very balanced article, it focuses on gloomy stats, not real world stats. Still it is interesting.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
Seeking a Mortgage in Today's Market Is Not Easy
Want a mortgage loan? It just got more difficult and more expensive for even the most credit worthy (real smart way to end a housing crunch.....).
This is a great article about the state of the mortgage market, its not pretty if you ask me. If you are looking for a loan, read this. The pendulum has really swung
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
This is a great article about the state of the mortgage market, its not pretty if you ask me. If you are looking for a loan, read this. The pendulum has really swung
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
Dow 20,000 Within a Year?
Well this is an interesting prediction....Dow 20,000.....within a year!
Evidently this guy has called market bottoms before. This is what I love about the stock market - you got George Soros on one hand calling for a Depression (just like he did in 1987) and this guy and others calling for another boom - what would amount to a 40% gain.
Who knows what will happen, I sure don't. I do know that the market will either be up, down or flat - but to what extent......its always unknowable.
Interesting story though. We'll return to it a year from now to see if he is right.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
Evidently this guy has called market bottoms before. This is what I love about the stock market - you got George Soros on one hand calling for a Depression (just like he did in 1987) and this guy and others calling for another boom - what would amount to a 40% gain.
Who knows what will happen, I sure don't. I do know that the market will either be up, down or flat - but to what extent......its always unknowable.
Interesting story though. We'll return to it a year from now to see if he is right.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
Shrugging Towards Recession
I haven't been a big fan of Jack Welch's weekly columns, they've been a bit boring to me. However, this weeks column about the distribution of financial instruments that nobody understood is quite good. This isn't a must read, but it is an interesting, if not frustrating piece.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
Monday, March 24, 2008
The Inefficient Market Argument for Passive Investing
Think passive investing is only for people who think the market is "efficient"? Think again.
Steven Thorley PhD, CFA, H. Taylor Peery Professor of Financial Services, Marriott School, BYU ..... Makes a case that even if markets are not efficient, the best way to maximize your return is......passive investing.
Unlike most of my colleagues (note: not most advisors), I'm not 100% convinced that markets are efficient, however, I also don't believe that if they aren't, that I or someone else has the ability to take consistent advantage of those inefficiencies.
This is a well written, interesting (non-academic) piece written by an academic and if you have even an inkling of wanting to learn about investing money, read this piece alongside Bogle, Swedroe and Ellis.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
Steven Thorley PhD, CFA, H. Taylor Peery Professor of Financial Services, Marriott School, BYU ..... Makes a case that even if markets are not efficient, the best way to maximize your return is......passive investing.
Unlike most of my colleagues (note: not most advisors), I'm not 100% convinced that markets are efficient, however, I also don't believe that if they aren't, that I or someone else has the ability to take consistent advantage of those inefficiencies.
This is a well written, interesting (non-academic) piece written by an academic and if you have even an inkling of wanting to learn about investing money, read this piece alongside Bogle, Swedroe and Ellis.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
Jeremy Siegel on Politicians, Prices and a Potential 'Buying Opportunity of the Decade'
You can read or listen to this interesting interview with Jeremy Siegel.
It is worth your time.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
It is worth your time.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
The Sky is Not Falling
Great article by Lynn O'Shaughnessy, it starts:
"Just about every morning, I spend time at the gym. Many mornings I read The New York Times on the Stairmaster, which I hate. The Stairmaster, not the NY Times.
One of the regulars at the gym is an older man, who happens to be a multi-millionaire. He usually likes to kid me good naturedly about the fact that I have all my money in index funds. In contrast, he is a stock jockey, who is always searching for the next great four-bagger. He is always eager to share just how successful his best picks have been. I don’t hear much about the losers.
But early this week, when the market was swan diving after the Bear Stearns takeover, my buddy looked panic stricken when we crossed paths. He owns big positions in Wells Fargo and Washington Mutual and he was trying to wrap his mind around the possibility of losing hundreds of thousands of dollars in one day. And that’s what happened."
To read the rest, which is a great article, click the link above.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
"Just about every morning, I spend time at the gym. Many mornings I read The New York Times on the Stairmaster, which I hate. The Stairmaster, not the NY Times.
One of the regulars at the gym is an older man, who happens to be a multi-millionaire. He usually likes to kid me good naturedly about the fact that I have all my money in index funds. In contrast, he is a stock jockey, who is always searching for the next great four-bagger. He is always eager to share just how successful his best picks have been. I don’t hear much about the losers.
But early this week, when the market was swan diving after the Bear Stearns takeover, my buddy looked panic stricken when we crossed paths. He owns big positions in Wells Fargo and Washington Mutual and he was trying to wrap his mind around the possibility of losing hundreds of thousands of dollars in one day. And that’s what happened."
To read the rest, which is a great article, click the link above.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
The Worst Risks of the Credit Crisis Averted
Looks like its all over, the credit crisis is over!
Well, maybe not, but at least one economist thinks we've turned a corner and it appears the market thinks that as well.
We shall see. I still maintain a properly diversified portfolio will serve you well and you should stick with it.
Don Luskin writes an interesting article and even thinks inflation may not spiral out of control.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
Well, maybe not, but at least one economist thinks we've turned a corner and it appears the market thinks that as well.
We shall see. I still maintain a properly diversified portfolio will serve you well and you should stick with it.
Don Luskin writes an interesting article and even thinks inflation may not spiral out of control.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
Wednesday, March 19, 2008
Allan Sloan - Social Insecurity, Sooner Than You Think - washingtonpost.com
Allan Sloan - Social Insecurity, Sooner Than You Think - washingtonpost.com
Great article on why we need to fix social security NOW.
I find it interesting that instead of fixing the entitlement programs that we have that WE KNOW FOR A FACT will become bankrupt, we are talking about adding new entitlement programs.
This does not bode well for individual freedom in America.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Great article on why we need to fix social security NOW.
I find it interesting that instead of fixing the entitlement programs that we have that WE KNOW FOR A FACT will become bankrupt, we are talking about adding new entitlement programs.
This does not bode well for individual freedom in America.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Monday, March 17, 2008
Fed's Bear Bailout Hobbles Free Markets (Bear Stearns, J.P. Morgan, Citigroup, Goldman Sachs, Lehman Brothers)
Fed's Bear Bailout Hobbles Free Markets (Bear Stearns, J.P. Morgan, Citigroup, Goldman Sachs, Lehman Brothers) at SmartMoney.com
When I heard about the Bear Stearns bailout on Friday I was flying back from a meeting in San Francisco and while I hadn't heard the details, I didn't like the sound of it.
Under the banner of "Too Big Too Fail" the government once again stepped in and slapped the face of every American by bailing out a company that screwed up. A company that took on to much risk precisely because they KNEW that if their bets turned out to be wrong, the government would step in to bail them out......they were right and now you and I will pay the price instead of the shareholders and financial institutions that lent them capital.
The arguement was that if Bear Stearns failed it would take down the economy - that is just ridiculous. It was simply an excuse to violate our freedoms and confiscate more money from taxpayers to keep the vicious circle of financial institutions taking on too much risk going for another round.
The article I linked to probably says it better, but it goes into how the government bailout of Bear Stearns is in an ironic phrase, B.S. (get it Bear Stearns initials are BS.....I always say never trust a company with BS in its name).
We've got a long way to go with the current crisis, but at the end of the day we will recover from it and the economy will soar to new highs, the question remains will it get to new highs based on good fundamentals or based on institutions taking on more and more risk that they know they'll never have to actually bear.
ScottyD
When I heard about the Bear Stearns bailout on Friday I was flying back from a meeting in San Francisco and while I hadn't heard the details, I didn't like the sound of it.
Under the banner of "Too Big Too Fail" the government once again stepped in and slapped the face of every American by bailing out a company that screwed up. A company that took on to much risk precisely because they KNEW that if their bets turned out to be wrong, the government would step in to bail them out......they were right and now you and I will pay the price instead of the shareholders and financial institutions that lent them capital.
The arguement was that if Bear Stearns failed it would take down the economy - that is just ridiculous. It was simply an excuse to violate our freedoms and confiscate more money from taxpayers to keep the vicious circle of financial institutions taking on too much risk going for another round.
The article I linked to probably says it better, but it goes into how the government bailout of Bear Stearns is in an ironic phrase, B.S. (get it Bear Stearns initials are BS.....I always say never trust a company with BS in its name).
We've got a long way to go with the current crisis, but at the end of the day we will recover from it and the economy will soar to new highs, the question remains will it get to new highs based on good fundamentals or based on institutions taking on more and more risk that they know they'll never have to actually bear.
ScottyD
Monday, March 10, 2008
Can You Beat the Market? It’s a $100 Billion Question - New York Times
Can You Beat the Market? It’s a $100 Billion Question - New York Times
Great article by Mark Hulbert on the costs of trying to beat the market. Americans spend on average $100 billion annually attempting to beat the market. But do they beat it? Nope.
Mark Hulbert's bottomline: "The best course for the average investor is to buy and hold an index fund for the long term. Even if you think you have compelling reasons to believe a particular trade could beat the market, the odds are still probably against you."
I agree 100%.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Great article by Mark Hulbert on the costs of trying to beat the market. Americans spend on average $100 billion annually attempting to beat the market. But do they beat it? Nope.
Mark Hulbert's bottomline: "The best course for the average investor is to buy and hold an index fund for the long term. Even if you think you have compelling reasons to believe a particular trade could beat the market, the odds are still probably against you."
I agree 100%.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Lynn O'Shaughnessy: Fee-Only VS. Fee-Based Advisors
Fee-Only VS. Fee-Based Advisors
Lynn provides us a good overview of commission versus fee-based versus fee-only advisors. She prefers Fee-only advisors (which of course I am one).
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Lynn provides us a good overview of commission versus fee-based versus fee-only advisors. She prefers Fee-only advisors (which of course I am one).
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Jack Guttentag: The Elephant in the Room
Jack Guttentag: The Elephant in the Room
Prof. Guttentag gives us a very good overview of how the mortgage system has and should work going forward and why innovations in mortgage insurance could have prevented a lot of problems, but instead caused many problems. Jack has an easy solution and it would save homeowners money - will it ever get implemented?
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Prof. Guttentag gives us a very good overview of how the mortgage system has and should work going forward and why innovations in mortgage insurance could have prevented a lot of problems, but instead caused many problems. Jack has an easy solution and it would save homeowners money - will it ever get implemented?
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Stein: Homeonwers and Investors, Time to Get Real
Stein: Homeonwers and Investors, Time to Get Real
Ben Stein warns that in the long run stocks will do just fine......but the short run could very well be difficult. He also warns that real estate has much further to fall (and I agree). But he doesn't advise you to sell stocks, or for that matter real estate (unless you have to, and to then be realistic).
He also echoes Jeremy Siegel's warning about higher taxes, specifically on stocks - this will lead to lower stock prices. He believes John McCain is the only candidate that will not raise taxes, from what I can gather this seems to be correct, though I'm not confident that all candidates will not raise taxes.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Ben Stein warns that in the long run stocks will do just fine......but the short run could very well be difficult. He also warns that real estate has much further to fall (and I agree). But he doesn't advise you to sell stocks, or for that matter real estate (unless you have to, and to then be realistic).
He also echoes Jeremy Siegel's warning about higher taxes, specifically on stocks - this will lead to lower stock prices. He believes John McCain is the only candidate that will not raise taxes, from what I can gather this seems to be correct, though I'm not confident that all candidates will not raise taxes.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
949-916-6238
Siegel: Obama, Clinton and McCain on Tax Policy
Yahoo! Obama, Clinton and McCain on Tax Policy More
Interesting article by Professor Siegel, in a nutshell, if the Democrats win the White House or Congress or both, you can expect much higher taxes. This would be a disaster for our economy. Regardless of your political persuasion, higher taxes are a major drag on the economy, be mindful of that and how it will affect your investments.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
Interesting article by Professor Siegel, in a nutshell, if the Democrats win the White House or Congress or both, you can expect much higher taxes. This would be a disaster for our economy. Regardless of your political persuasion, higher taxes are a major drag on the economy, be mindful of that and how it will affect your investments.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
Safety-Minded Flock to Bond With Negative Yield
Safety-Minded Flock to Bond With Negative Yield (Ahead of the Curve) | SmartMoney.com
I'm not actually recommending TIPS (treasury inflation protected securities) right now, but Luskin actually makes a decent arguement for them.
The fact of the matter is that none of the treasury bills that you could purchase right now have a positive return available to them - the only reason to buy them is safety. Treasuries now have an after-inflation, after-tax yield that is negative. This means that anyone buying a treasury will guarantee themselves a negative return till maturity.
There really isn't much in fixed income land to buy that will give you a positive return - perhaps some municipals, GNMA's are a possibility, but there yield is effectively zero after taxes (but slightly positive if purchased in a tax-deferred account).
Bottomline, you need to watch your fixed income, but don't panic. People are panicking a bit in the stock market as it is down a little more than 15%, however bond yields are down more than 50%, in some cases 70%.
A diversified portfolio that is low in cost and passively managed will fluctuate, but will hold up just fine in the long term, the key right now is patience.
Those with patience will ride out this storm, just like they've ridden out other, much worse storms.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
I'm not actually recommending TIPS (treasury inflation protected securities) right now, but Luskin actually makes a decent arguement for them.
The fact of the matter is that none of the treasury bills that you could purchase right now have a positive return available to them - the only reason to buy them is safety. Treasuries now have an after-inflation, after-tax yield that is negative. This means that anyone buying a treasury will guarantee themselves a negative return till maturity.
There really isn't much in fixed income land to buy that will give you a positive return - perhaps some municipals, GNMA's are a possibility, but there yield is effectively zero after taxes (but slightly positive if purchased in a tax-deferred account).
Bottomline, you need to watch your fixed income, but don't panic. People are panicking a bit in the stock market as it is down a little more than 15%, however bond yields are down more than 50%, in some cases 70%.
A diversified portfolio that is low in cost and passively managed will fluctuate, but will hold up just fine in the long term, the key right now is patience.
Those with patience will ride out this storm, just like they've ridden out other, much worse storms.
Scott Dauenhauer, CFP, MSFP, AIF
949-916-6238
www.meridianwealth.com
Monday, March 03, 2008
Winners Are Difficult To Predict
This chart shows the Annual asset class returns from highest to lowest over the last ten years. The point is that attempting to pick which asset class is going to do the best from year to year is impossible.
You can download a full PDF by clicking on the above link.
Scott Dauenhauer, CFP, MSFP, AIF
www.meridianwealth.com
Sunday, March 02, 2008
Ask Lynn: Stockbrokers are not investment advisors
Stockbrokers are not investment advisors
Want to know the difference between a stockbroker and an Advisor? Lynn O'Shaughnessy gives us a nice brief introduction as to those differences and why they are so important.
Scott Dauenhauer, CFP, MSFP, AIF
Want to know the difference between a stockbroker and an Advisor? Lynn O'Shaughnessy gives us a nice brief introduction as to those differences and why they are so important.
Scott Dauenhauer, CFP, MSFP, AIF
Saturday, March 01, 2008
Are We Really Experiencing Something New?
For those of you who think that we are in the final stages of an inevitable Apocalypse, perhaps this Time magazine cover from 1974 will shake you loose from your stupor.
"That which has benn is what will be" Ecclesiastes 1:9 "that which is done is what will be done, and there is nothing new under the sun"
Indeed, there is nothing new under the sun, or as another once put it - "The only thing new is the history you don't know" - paraphrased.
In October of 1974 the Dow Jones Industrial Average was 700. That's right, 700.
My Point: Don't let today's media fool you into thinking that somehow we're experiencing something new and out of the ordinary. We will make it through, like we always do and those who panic will be the ones who miss out on the next big upswing which will inevitably occur (though I can't say when).
Stop worrying about the market, stay focused on what's important - you know what that is.
Scott Dauenhauer, CFP, MSFP, AIF
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