Although investors worried about potential impending inflation and monetizing debt, there is something to be said about the Fed's buying of a "vast" portfolio of mortgage and Treasury securities. According to a IBD study and this article, the bond buys may knock down the rising public debt down almost $1 trillion by the end of 2015. Coupled with the threat of a credit downgrade and lowered government borrowing rate, there might be more at stake here than Bernanke let's on. ".research suggests that the cumulative impact of the Fed's bond buying has lowered rates more than 1 percentage point. By 2015, that could save the government over $100 billion a year on more than $10 trillion in government debt not held by the Fed."
It comes as no surprise that precious metal ETFs are still quite on the up and up.
Among the top performers this week were Velocity Shares, Global X Silver Miners, iShares Silver Trust, all of which track market volatility. Aside from the obvious uses for precious metals like silver, Bill Strazzullo, chief market strategist at New Jersey-based Bell Curve Trading, believes the rise in precious metals ETFs can be attributed to people substituting precious metals for currency in times of currency stress.
A few dollars here, a few dollars there. No big deal, right? Wrong. In Kiplinger's "25 Ways to Waste Your Money," you might be able to nix those bad spending habits by cutting a few corners. Paying too much for your mutual fund that isn't meeting it's benchmark and paying the U.S. stock fund's 1.3% yearly expense will make you dig deeper into your pockets than you need to. If you do have one of those mutual funds not meeting its benchmark, then according to the article, it's time to switch to a low-cost index fun or ETF that does.
Another way you could be wasting money is by investing in taxable accounts first to avoid wasting money on taxes on what you earn. "Cram as many dollars into these tax-sheltered investments as you can first."
As a financial advisors working with a client, the main goal is the same, but the route to get there might differ from client to advisors. According to Entrepreneur, one of the biggest mistakes new entrepreneurs make is not keeping their business and personal finances separate. Instead, they transfer money back and forth muddling up what cash goes toward the business or life necessities. By mixing the two, it can be hard to decipher where the corporate profits and revenue stand. As an advisor, make sure your clients have separate bank accounts for personal and business ventures, and encourage them to not mix credit purchases.
When dealing with telling current clients you're going independent or switching firms, it's important to think like your client. Questions like "Why are they leaving?" "Will I get the same services at the new firm as I'm getting now?" and "Will there be a fee change?" all run through a client's head.Â "Declaring Independence" walks clients through the decision of whether or not to follow your advisor, and ultimately designating some red flags clients should look out for. It's no surprise that if you've left a firm multiple times in the past five years, your client might think that sounds fishy and not follow you to your new firm. But remember to take into account the client's assets, investment choices and risk when telling them you're moving on, moving back, or going rogue.
Who knew it might take an error-ridden map software update to knock Apple off its throne-even if for a short while. And let's not forget the ongoing spat with Samsung. According to TownHall Research, Apple's mapping issue on the new iOS 6 software update might "be the canary in the coal mine that some have suggested over the last two weeks." Despite soaring sales the iPhone 5 brought, Apple shares closed on Monday down 2, $7.71 down from $659.39.Â
David Rubenstein, co-founder of Carlyle Group buyout firm, says ordinary savers investing in firms like his may be possible-someday. As of today, investments in firms like Carlyle are reserved for high net worth individuals and institutions.
So far, these high net worth investors and institutions have been the only ones allowed to siphon money into buyouts and hedge funds. But Rubenstein believes in the future, 401(k) plans may have the option to allocate a portion of your salary to an illiquid private-equity fund. Large private-equity managers are attempting to diversify through considering funds for individual investors while looking for more capital at the same time.
For investors constantly worried about falling share prices, planners and Wall Street workers have a "medicine chest filled with measures and terms meant to soothe." But just because they sound fancy, doesn't necessarily mean they work. As an advisors in tough times, SmartMoney thinks you might be one the wiser to avoid using words like "beta," "correlation," "hedging" and "defensive investing."
Rather than using beta to measure risk, SM suggests studying financial statements. Correlation is another big no-no. Before using it, remember that just because there is a correlation between stocks, that doesn't prove a common cause for similar behavior. Finally, remember that "defensive investing" and "hedging" can get expensive, and what's the stock market if you're not playing with at least a little risk?
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