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Showing posts from November, 2007

Investing to Beat Inflation

by John Dobosz

In October, the nation's first baby boomer, Kathleen Casey-Kirschling, applied for her Social Security benefits. The 61-year-old woman was born one second after midnight on January 1, 1946.Following Ms. Casey-Kirschling into retirement over the next two decades will be about 80 million people born between 1946 and 1964, a generational swath that encompasses everyone from Bill Clinton and George W. Bush to Sandra Bullock and Rob Lowe.Welcome to your retirement, boomers. It's going to be a long one.Making sure that your savings last as long as you do could be a challenge for some people. And even if your nest egg grows, will it grow fast enough to keep you ahead of inflation?Going back 40 years to 1967, do you know which had a higher annualized gain: the S&P 500 Index or the Consumer Price Index (CPI)? Although you may be tempted to say inflation, you'd be wrong.From September 1967 to September 2007, the S&P 500 produced an annualized …

Deflation to the Rescue

by Clif Droke

Time is the least common denominator of all things, including in the stock market. We'd all be lost if we couldn't look at the clock throughout the day since time is our frame of reference for the day's activities. So are the days of the calendar and so are the dominant equity market cycles.

With that in mind, let's step back for a minute and consider where we are in the grand scheme of the 60-year cycle. The 60-year cycle is one of the most profound market cycles of our lifetime since it usually bottoms at least once during the average lifespan. The 60-year cycle also closely correlates with the 50-70 year Kondratieff economic long wave (which as the name implies is a wave, not a cycle). The K-wave averages 60 years and is expected to bottom at about the same time as the current 60-year cycle, in or around 2014.

The 60-year cycle is the dominant half-cycle component of the Kress 120-year Master Cycle series, which governs the major bias of the financial mar…

Sunshine Empire under CAD probe

By Asha Popatlal, Channel NewsAsia | Posted: 13 November 2007 1813 hrs

SINGAPORE: The Commercial Affairs Department (CAD) has launched investigations into multi-level marketing (MLM) firm, Sunshine Empire.

The probe by the white collar crime buster comes just over a month after the Monetary Authority of Singapore (MAS) placed the firm on an investor-alert list which zooms in on those who may be conducting activities regulated by the MAS without authority.

Sunshine was also put on a similar list by Malaysian authorities a few months ago.

MLM firms, which are legal in Singapore, typically invite people to pay cash for the right to market goods to other people. They also get cash for recruiting other MLM marketeers.

Sunshine has been in the news on concerns over its business practices.

It is supposed to be doing networking marketing but its mode of operation appears more like a financial investment scheme for which it is not licensed.

Sunshine is believed to have a few thousand members.

Whe…

Profit in 2008: Your spending

Energy bills. A flat-panel TV. There are plenty of ways to save money in the coming year.
By Donna Rosato, Money Magazine senior writer
(Money Magazine) -- Higher energy prices and a weak dollar are boosting the cost of everything from milk to heating your home to your annual family vacation. But you don't have to feel beaten down.Vacation closer to home The dollar is expected to remain a wimp against the euro, pound and Canadian loonie. But if you have your heart set on an overseas vacation in 2008, there are still plenty of destinations where the dollar is a good value.Latin America in general is inexpensive because many local currencies are tied to the U.S. dollar formally and informally, says Tim Leffel, author of "The World's Cheapest Destinations: 21 Countries Where Your Money Is Worth a Fortune." Leffel says Argentina and Peru are the best values for tourists, as are many parts of Asia. Have your heart set on Europe? Spain and Portugal are relatively cheap compar…

Profit in 2008: Your job

Three ways to stand out in a crowded field.
By Donna Rosato, Money Magazine senior writer
(Money Magazine) -- Expect to work harder for your money, but your job should be safe (unless you work in a vulnerable industry, like housing or autos). Raise your profile High-performing workers will snag raises of 5.7% or higher in 2008 vs. 3.8% for the average employee, according to Mercer Human Resource Consulting.Whatever extra money is available will be largely tied to bonuses and other types of incentive pay, according to WorldatWork, an HR association. How do you make sure you're one of those getting top dollar? You not only need to do your job very well, you have to make sure your boss knows it. Talk regularly with your manager to make sure you're meeting expectations and to keep him up to date on your progress on key goals. If you're shy about tooting your horn, send e-mails instead, giving him the latest info about an important project or the lowdown about a meeting with a new…

Profit in 2008: Your investments

Three ways to make the market's volatility work for you.
By Janice Revell, Money Magazine senior writer
(Money Magazine) -- Let's face it: As investors, we've been spoiled. A study by Wilshire Consulting shows that from 2004 to 2006, volatility in the U.S. stock market was almost freakishly low - in fact, over the past 30 years, there was only one other stretch (1993 to 1996) when the market was as calm. That's history now, and the turbulence that erupted last summer looks to continue next year. But you can make that volatility work to your advantage.The best strategy in a rocky market is to stay in the game. As long as you're investing over a long enough period for the market to recover from a severe drop - about seven to 10 years - you will almost always be better off staying invested and continuing to pick up additional shares on market dips. Consider the outcome if you had contributed, say, $400 every two weeks to your 401(k) plan and invested it in a low-cost st…

All the right moves: Profit in 2008

The 22 best ways to keep safe, spend smart and make your money grow in the year ahead
By Amanda Gengler, Money Magazine writer-reporter

Money Magazine) -- Tumbling home values. Soaring energy prices. A topsy-turvy stock market and a gazillion other financial worries, not the least of which is whether we'll spend the coming year mired in recession. Considering all the black clouds hanging over the economy, you probably think there's no way you can really expect to prosper in 2008. It will be all you can do just to hang in there.
If that is what you're thinking, we're happy to tell you that you're wrong. There will be plenty of opportunities to make money next year - yes, even in real estate - as well as ways to insulate your finances from the most serious economic challenges ahead.Your home The real estate slump isn't going away soon, so whether you're buying, selling or staying put, deal with it.Make your house look like a bargain For sellers: Forget what the ug…

Turbulent time for Asian markets next year: S&P

ASIAN stock markets face a difficult 2008 and could slide sharply, ratings agency Standard & Poor's (S&P) said yesterday, as regional share prices fell heavily.
'Next year will be a more difficult one for stock-market returns and we would not rule out the risk of a sharp correction,' Asia-Pacific equity research head Lorraine Tan said in a statement.

Asian equity markets have reached increasingly risky levels and there will be less scope for them to rise after this year's strong performance, the report added.

'Markets would be jittery over potential negative news, such as on inflation and further deterioration in the US and European economies,' said Ms Tan.

The United States is struggling with a credit crunch and housing market slowdown, after record defaults on sub-prime mortgages extended to homebuyers with riskier credit profiles.

The report said markets in Hong Kong, South Korea and Thailand were likely to deliver better relative performances next year,…

Collapse or Rally? The market ahead.

Collapse or Rally?
The market ahead
By Starry Administrator
Sgfunds.com

Over the last 2 months or so, we received many emails asking for market direction, opinions on conflicting analyst reports and more recently, what should they do seeing the market rebounded strongly. Understandably, this must be a very confusing time for most investors out there. Just when the credit crunch and sub-prime issues were hogging headlines, FED suddenly pull a trick out of their bag with a cut of 50 basis points. What now? Is this good or bad? There were so many conflicting reports (I received quite a few everyday), with expert economist or analyst conflicting each other with their views and opinions. So why another article from us on this issue? Because we feel that addressing the current market situation from both fundamental and technical point of view would give a clearer perspective. We have not seen many reports attempted that. Also, having given some earlier comments in the forum about our thoughts o…

The Key to Your Happiness

By Mary Dalrymple

Think for a moment about all the things in life you can't control -- the weather, the price of gasoline, that crazy guy hammering the horn while you're stuck in gridlocked traffic. These things make us unhappy.

What can turn that frown upside down? Saying goodbye to deadlines, meetings, and micromanaging bosses forever. Yep, retirement can put a smile on your face. It doesn't matter whether you quit cold turkey or you take your time. What matters -- to your happiness, anyway -- is whether you have control.Do it your way
That's what researchers at the Center for Retirement Research at Boston College discovered when they looked at survey data to see what effect retirement had on happiness. They found the cheeriest bunch of retirees had control over their decision to retire.From the comfort of your plush cubicle, you may think that if it were that easy, golf courses would be packed with retirees grinning from ear to ear. But…

Money Magazine 2008 outlook: Investing

By Janice Revell, Money Magazine senior writer

The sluggish economy will be behind the expected surge in market turbulence. "When the economy slows down, there is more uncertainty," says Stuart Freeman, chief equity strategist at A.G. Edwards. "So people react much more strongly to news that otherwise would not have a big impact."

But even though stock prices will jump around more, they're still expected to rise in the coming year. The combination of decent if unspectacular earnings growth - about 7.7 percent - and a slight decline in the average price-to-earnings ratio next year should translate to an overall gain of about 5 percent in Standard & Poor's 500 index for 2008.But to cash in, you'll need to be picky about the kind of stocks you buy. Most pros believe that large-cap growth stocks - shares of companies with earnings growing faster than the market average - are primed to outperform in 2008.One reason: A weaker U.S. dollar boosts profits on b…

Protecting your nest egg in a recession

Laura Bruce

Anyone nearing retirement is old enough to remember the recession of 2001.While the experts were debating whether the country really was in a recession -- and if so, when it would bottom out and when the recovery would start -- your portfolio was probably losing value.It's rotten enough to see your nest egg decimated when you have 10, 20 or more years for it to recover.But millions of Americans on the cusp of retirement experienced the devastating effect of a recession on their portfolios just prior to, or shortly into, their retirements.

9 tips from the experts:

Understand risk
Why a recession is coming
How to create a defensive strategy
Insure your portfolio
What to invest in now: Barber
What to invest in now: Lancz
Be proactive
Know when to sell
Be aware of costsNow, six years later, the news is peppered with stories of a slowing economy and talk of a possible recession. If retirement is in your near future, or even if it's years off, consider taking steps to protect your…

Patience Is Part of the Cycle

As a trader there are times where less is more and the art of patience becomes the ultimate strategy. It is counterintuitive for a trader to sit idle as it goes against the very nature of what a trader is and does, always on the prowl, always in motion, but during times of uncertainty it is that very patience which keeps a trader in the game awaiting the next favorable opportunity. I have struggled with this over the years and have spent considerable time analyzing why I am not alone facing this challenge. It seems that most traders have a drive to be in control, always attempting to influence the outcome of each and every situation. While it is this same desire to remain in control that allows many traders to achieve ultimate success as they don’t cling onto false hope, allowing trades to get away from them, it is this same trait which keeps a trader trading when in reality they should be doing nothing. It doesn’t look or feel right, raising substantial cash and taking your hands off…

Wall Street firms see recession nearing

By John PoirierNEW YORK (Reuters) - The economy might be edging toward a recession in the wake of mortgage-related credit woes plaguing the financial markets, bankers and analysts said on Monday."I think that the risk of a recession is greater than people realize," James Dunne, chief executive of Sandler O'Neil & Partners, said at the Reuters Finance Summit in New York.With home prices dropping, more people about to lose their homes due to unaffordable mortgages and sharply higher oil prices, the economy could be on the brink of slowing down, they said."I think there is a serious risk to the economy," Howard Lutnick, CEO of Cantor Fitzgerald, told the summit.Charles Peabody, partner at New York-based research firm Portales Partners LLC, said the Fed may have to take more aggressive action and drop the benchmark fed funds rate in an effort to prevent a Japanese-style economic stagnation, which eventually evolved into a deflationary recession."We're …

Make money in 2008: The outlook

The economy, housing, employment and the markets: What will matter most to your money next year?By Walter Updegrave, Money Magazine senior editor

(NEW YORK) Money Magazine -- Given the pervasive gloom in the face of the housing slump and sudden sharp drops in stock prices earlier this year, you might have figured it was just a matter of time before the economy would collapse faster than the Colorado Rockies in the World Series. In fact, a survey last summer found that two-thirds of Americans believed the economy either was already in a recession or would be in the next year.The litany of depressing news has only seemed to get worse since then: surging oil prices, mortgage defaults, investment banks writing off subprime loans, the dollar skidding to new lows - pass the Prozac.
Well, we've got two words for you: Cheer up. If you delve behind the headlines, you'll find that despite all of these challenges, the economy has actually held up pretty well this year. And key indicators s…

Mutual Funds Are for Losers

by Jay MacDonald
If Wall Street were a Hans Christian Anderson fairy tale, Phil Town would be the little boy pointing and laughing at the emperor's new clothes, or lack thereof.

By turns a Vietnam Green Beret, Grand Canyon river guide and spiritual seeker of enlightenment, Town's life on the fringes of society changed when he saved a raft from treacherous rapids on the Colorado River. One of the thankful survivors was a successful San Diego investor who, in turn, volunteered to save Town's financial future by teaching him the ropes of investing.

Blending Zen with Wall Street, Town's anyone-can-do-this advice, in his best-seller "Rule #1," amounts to: Don't lose money, find great companies, know their worth and acquire them at 50 percent off. Beyond that, he says the traditional advice -- invest in mutual funds, diversify, buy and hold -- is strictly for losers.

Let's cut to the chase: What's wrong with mutual funds?

First, if you intend to stay ignora…

Morgan Stanley sees Asia linked to US recession

Mumbai: The crisis in subprime mortgages in the US is unlikely to affect stock markets in Asia, says Stephen Roach, chairman of Morgan Stanley Asia. However, should the credit crunch affect consumer demand in the US, Asian markets will not remain immune, he warned.

Note of caution: Stephen Roach, chairman of Morgan Stanley Asia.Roach noted that if the US does go into a recession, Asia cannot remain as a lucrative investment option.

“Asia will not be an oasis of prosperity in a softer global demand climate,” he said. “I think there could be a significant correction in emerging market equities that will impact the Indian market.”

Weighing in on the debate about the Asian markets decoupling from the US, Roach pointed out that while Chinese consumption is worth $1 trillion (Rs39.4 trillion) and India has a $700 billion market, they pale in comparison to the US, which is a $9.5 trillion consumer market.
Much of India and China’s exports are dependent on the US. If US consumption falls a couple…

Retire Rich: Why the Fed's rate cut should scare you

By Janice Revell, Money Magazine senior writer

If you're saving for a retirement decades away, Thursday's big drop in the stock market shouldn't worry you too much.But something did happen this week that you can't afford to ignore: the Federal Reserve's rate cut.The Fed's actions could very well be ushering in a new era of inflation - and that is horrible news for your retirement portfolio.When you save for retirement, you're saving for a lifetime supply of food, shelter and golf fees. Over time, the prices for these things only go one way: up.The risk is that the value of the investments you're now stockpiling to pay for them may not increase at the same pace - leaving you with only enough money to pay for nine holes' worth of green fees.With its rate cut this week, the Fed has made it clear that staving off recession is more important than reining in inflation.But while the typical recession has lasted 18 months on average (not including the Great …