Saturday, May 18, 2019

Is your Retire Fund in jeopardy of a Stock Market reversal?

You have recently retired, or will retire in the next few years, but you are still heavily invested in the stock markets because that is where the growth has come from for the past 10 or so years.

Maybe you took a beating in 2008, or maybe you didn't start saving/investing until late in your career, and you feel you need a bit more!

 Maybe it's time you considered "solidifying" the investments you still have.

Paper profits are great, until a sudden reversal in stock prices occurs.  If that happens this year,(and this writer believes it will), then you may be left trying to decide to "stay in" to try and recoup your losses, or cash out with 20-50% less profit. If such an event occurs, it maybe a decade before you recoup those losses.

To this date the Nasdaq has returned, year to date, over 19%  "THAT" my friends is a great return on investment! The SP500 has returned almost as much YTD!  I sincerely do not believe that retirees or those nearing retirement, "will ever see" returns like this again!!!



If you are over 50 or need the money in your portfolio for retirement, if you cannot afford a downturn in stock prices (or bond prices for that matter see: Bonds) then maybe you should consider the wise advice of the foremost investor in modern history, Mr. Warren Buffett, who famously said:





Remember, "Cash" is also a Position and, at this juncture, it may be the best position!

Sunday, May 12, 2019

How safe is the Corporate Bond Market for your RetireFund?

Bonds are Safe!  Bonds are where you put your money when stocks begin to swoon!

At least, this is the general consensus after 20+ years of a Bond bull market (and all the marketing info pumped into our heads by the investment community)

However, things have changed in the Corporate Bond Market, (and treasuries) and not for the good!

Besides al the talk of trade wars, and the coming worldwide Debt bomb, Investors already wary of a bubble in Treasuries should also be aware of what is going on in the "Corporate" Bond market now!

There are now over $52 Trillion dollars in Corporate Bond issues, over twice the amount there was in 2008 before the financial crisis. According to a recent Bloomberg analysis, "The duration of (those) $52 trillion of Investment-grade bonds now stands at 7"!

That means, if rates rise 1% these bonds would lose 7% of their market value. A 1/2 % point jump would be 3.5% or a 1.8 Billion dollar loss.

With interest rates near all time lows, after a 20 year bond bull market, it maybe time now to re-evaluate your bond positions, especially if you are nearing retirement.


 Also, if you are considering the U.S. Treasury bond funds, then consider this chart AND the fact that all funds charge a fee, every single year, to hold them.

No one, especially this writer, has a crystal ball, however, if you are in or approaching retirement, in the USA or Canada, then you should pay attention to these developments.

Oh yes, pay down and pay off your own debts. Your Retire Fund will thank you for it!

Sunday, April 14, 2019

The list of 2019 IPO Unicorns coming to market, brings a chill of Deja Vu

The plethora of Tech IPO's rushing to market this year brings back memories of two other years. 1999 (the height of the Dot Com Bubble)  and 2007 (the top of the market just before the financial crisis of 2008)

If you had jumped into many of those stocks at the time of the IPO hype, you would either have been wiped out completely, or, at very least, would still be trying to climb out of that ugly mess this year!

At this writing, approximately 75% of "all" wealth in North America, is held by retirees or pre-retirees. Although many are still trying to get to the promised land of retirement, I believe that these people, as individual investors, have no place in the coming stampede of Unicorn IPO's descending on this market. It would be prudent to leave this over hyped segment to the big dogs of investing.

 I also believe that those who leave big chunks of their Retire.Fund in Index Funds, may also be courting trouble this year.  My reasons are many. Besides the ongoing calamity in the macro picture (see - Stocks VS Index Funds) There is also one elephant in the room.

 None of these Unicorns currently make money!

 What is a Unicorn you ask? A Unicorn is a mythical beast that does not exist!

In the same context, that is now a name
given to any company who comes to market, with over a Billion dollars in valuation, that has "NEVER MADE MONEY"!!!

 In the last century, these companies did not exist!

However,  2019 has a slew of those, starting with the IPO Big Dog, "Uber"!

 Uber has lost Billions, every single year, for 10 years.  3 Billion just last year!

They expect to come to market with an IPO valuation of between $100 Billion and $120 Billion.  WHAAT!!!!!!


Lyft, has "Never made Money" either, and they are Uber's largest competitor in, what is essentially, a taxi business.  Since Lyft's IPO this month, it has dropped over 16%, and falling.  It was the first of these unicorn companies to come to market, and you should judge it as the "canary in the coal mine" of this IPO season. It may actually do better than some of the other Duds in this list.

Once upon a time, Insiders would bring their companies to market much earlier than today.  They used to do that to raise capital to "grow" their business. However, in today's over hyped markets, they don't have to.

Why is that, you might ask? Well, if you can stay private as long as you can, while Billionaire venture capitalists such as, Sequoia Capital, Andreessen Horowitz and Founders Fund keep, shoving money into your company, why wouldn't you?  In today's market, the Venture funds, and many insiders, merely want to "cash-in" and, you guessed it, you, the public investor, are their Bank!

There is currently a whole herd of unicorns coming into the market this year. Why, because valuations are high, because there is lots of money to be had, and because the future does not bode well for these suspect companies. If you want to make investors believe that your company, which has "never made money" is worth billions and billions, then you have to catch investors at the tip of their euphoria.  The thought of "being left behind" is strong for many investors, and that kind of thinking is dangerous!  Remember, Deja Vu!

Earlier I mentioned venture funds, Sequoia Capital, Andreessen Horowitz and Founders Fund!
These three were also early investors in AirBnB.  Oddly enough, This is the one unicorn that I might consider, in six months or so! Mostly because it's business model allows average people to monitize their own properties.  I like that!  It has a future!

Others in the unicorn herd include, Zoom technologies, Pinterest, Tradeweb, Slack, Postmates, Palantir, Casper and Cloudstrike, among a few others.

Thoughts:

Palantir has merit because of it's reach in cyber security, but the CIA was an early investor, and, besides utilizing the platform, they no doubt want to get some of their money back.

Casper, is a mattress company, enough said!

Cloudstrike has some promise, and may be a viable option in the future.

The rest are, in my opinion, merely money making machines for insiders!
And, It is your money they seek!

These are not the same as the FAANG stocks were.
Some acronyms that may apply here: LUZ, STAULZ, STAAP

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

PS: You might also want to re-evaluate the "Growth" Stocks in your portfolio! I recently de-FAANGed our Retire.Fund


Keep in mind that, the last year this many Unicorns came to market, was during the height of the Dot Com Mania.  It took investors 15 years to merely get back to where they were when they invested. 

Some were wiped out!

Invest wisely friends, and remember, at this juncture, 
"CASH" is also a position!

Wednesday, March 6, 2019

The web Domain Fund.com recently sold for 2.5 million dollars this year!





In recent years, these two Domains were sold for these prices:




RETIRE.COM  $2,000,000
FUND.COM    $2,500,000


NOW!  Your company can own

RETIREFUND.COM 

 for a lot less!

AND get the .net and org as a bonus!!!



RETIREFUND.com 

What are your clients doing?
                        "AFTER WORK"!

Go to RetireFund.com now to see the details of this auction:

Note: The sale and Escrow will be handled by reliable third party broker Epik.com
 



Sunday, February 24, 2019

Individual Stocks or Index Funds - 2019 may be a pivotal year!

Picking Stocks VS Index Funds in 2019

2019 does not bode well for Stock Indexes and therefore, Index funds.  Buying Index funds has been the go-to investment of individual investors (and some institutional investors) for years now.  Since 2009, many have done very well with this simple strategy which has outdone many money managers over that time.

2019 may be different for a number of reasons! This bull market we have enjoyed since 2009, is getting very long in the tooth and 2019 is beginning to look like the end is in sight.

The macro picture is a mishmash of poor decisions and poor leadership from Central Banks and world leaders alike. The news is dominated by trade war talks, Walls, Brexit, German (read Euro) downturn, and Debt, beyond anything we have witnessed in the past. Real war cannot be dismissed either as the USA and North Korea are at a stalemate, and (nuclear armed) India and Pakistan are shooting down each others fighter jets, to the cheers of their domestic audiences.

With Britain on the verge of a "no deal" Brexit, Italy may be becoming a financial basket case, German output is inching into negative territory, and in France, the Macron government has done nothing to right that ship.

Some believe that, Deutsche Bank may well be the "Lehman Brothers" of the Euro zone this year as creditors close in and a bailout partner is not in sight. The two largest economies on the planet, USA and China are at serious odds over trade AND both are in serious DEBT!

As the USA begins to withdraw from the world under this administration, it owes $22 Trillion dollars and that debt is now growing at 1.5 Trillion per year under Trump.

There are two ways to handle such a debt burden, 1: Default
2: reduce the dollar to a nickel.  There is no other way to pay down such a massive debt! (my bet is that, if it were entirely up to Mr. Trump, he would pick door number 1)

There are now more refugees on the move across the world than WW2 and most countries are putting up barriers to entry. Euro zone countries from Spain to Greece are doing whatever they can to keep out refugees, instead of welcoming them. Climate change, inept governments and wars are the reasons for such a migration.

Witness the debacle in the USA on the southern border as this president continues to threaten to shut down government if he does not get his wall. This argument is a hideous sidelight to what is truly going on in the world. This same administration seems to admire despots while scorning democracy, whether it is in it's own constitution or that of valuable allies.

The USA has now walked away from trade agreements, peace treaties and most recently, a nuclear arms agreement with Russia. None of these things bode well for markets, or indeed, humanity, going forward, but the pied Pipers of Wall Street keep on playing!

On a lesser, and personal financial note, while most index funds have very low fees, they are paid annually, and therefore, add up over time, eating into profits.  As the value of your investments go up, so do your fees. This is a built in strategy that will eventually eat away at your gains. If these investments go down, the fund still gets paid, every year!

Conversely, Buying individual stocks is now usually done online for less than $10 per trade! (One time). When an index tumbles, not all stocks are included. Some stocks actually go up at such times.

 The drawback:

Now you have to do homework!  Stocks are not index funds! They require you to do some investigating of your own, unless, of course, you want to keep all your money in cash, gold and silver, and buried in your back yard!