What About The Economy?
--- by Guy Baker
The economic news in early May was upbeat except for the unemployment statistics. But, then U.S. Stocks slid during the last half of the month, capping the worst May for the Dow since 1940. At the same time, the Euro slumped and treasuries rose, world events and tensions increased. Money fled from riskier assets.
Unemployment may be a precursor for the economic winds during the coming months. Personally, I think the country is in a holding pattern until the elections. With the present administration promoting regulation, taxes and spending, it is hard for anyone to have an optimistic view of the future. With the PIIGS (Portugal, Italy, Ireland, Greece and Spain) financial woes dominating the international news along with wars in Iraq, Thailand, Korea and who knows where else, why would anyone want to make long term commitments to planning? Still, the U.S. economy keeps rolling along and is generating some positive results. Here is the good news: . . . -READ More-
Inflation, Not The Bear Market, Is The Real Portfolio Destroyer
Consumer prices in March were virtually unchanged from a year earlier, as the core rate of inflation rose just 1.1 percent. You had to go back to January 1966 to find a smaller year-over-year price increase.
A savvy investor would not assume from this that inflation is dead, but rather that it is merely taking a breather. The inexorable long-term rise in prices almost surely will gain momentum at some point in the future. Investors who don’t take that threat of inflation into account when planning their portfolios may someday find themselves short of enough spending money. . . . -READ MORE-
Long Term Care Costs Are Devastating
A lot of attention has been paid to lifetime health care costs during the recent debate over the federal health care overhaul plan.
The group with the most concerns may be those in or nearing retirement, because health care costs tend to go up with age. . . . -READ MORE-
Mutual Fund Investors Get Their Market Timing All Wrong
Investors are a sorry lot when it comes to market timing. They tend to push money into stocks just before the market declines, and take money out of stocks just before the stock market begins to rise. . . .-READ More-
Going It Alone, Life Lessons, And More
E mployees who save through 401k plans but ignore financial advice resources offered by the plans often take too much risk, a new study has found.
Consulting firm Hewitt Associates said its survey found that those who used online advice and managed accounts offered by their plans saved 47 percent more over a 20-year period than those who did not use the resources.
Employees who invested on their own tended to take higher risks, and did not reduce their risk levels as they neared retirement.
Don’t Believe The Myth Of The Stock Market’s “Lost Decade”
We have been hearing the hype for over a year: the 10- 
year-period from 2000 through 2009 was a “lost decade” for stock market investors, featuring two large bear markets and a cumulative loss on the Standard & Poor’s 500 Index of 9 percent.
It is true that some investors did not have a good experience over the last 10 years. Those who put all of their money into large capitalization U.S. stocks probably lost money or made very little.
And those who invested in the darling growth stocks of 1999 like Enron and Yahoo and AIG may have lost virtually everything they had.