Market Summary- Q2 2012
Australia’s champion racehorse Black Caviar is unbeaten over twenty-two races. Think of her as a growth stock with four legs. With a brilliant bloodline and a huge fan base—she even has her own Facebook page—Black Caviar is turning into the most popular racehorse since the legendary Phar Lap.The five-year-old mare prevailed in Britain’s premier racing event at Royal Ascot late last month. But unless you own part of Black Caviar, you’re unlikely to make much money from placing a bet on her fortunes. “The Wonder from Downunder,” as she is known, pays close to...
Read MoreJuly 2012 Newsletter: Are You Worried About Europe and the Impending Fiscal Cliff?
“I increasingly think Europe and the impending fiscal cliff are likely to lead to a new recession and a further decline in the market.” -Comment from an MFA client- Some wonder if a “buy-and-hold” philosophy is appropriate given all the predictions that stocks are going to decline sometime this year due to bloated government debt in Europe [and the US], the fiscal cliff [expiration of the Bush-era income tax cuts] and every other issue that causes economic concern. With the continual repositioning of stocks within the funds we buy on your behalf, as well as our monitoring and rebalancing,...
Read MoreMarket Summary – Q1 2012
Should Investors Buy High-Dividend Stocks? With bond yields still hovering around historic lows, some investors may be tempted to consider dividend-paying stocks as a way of generating income from their portfolios, presumably with the benefit of not having to sell from their principal. But before embarking onthis strategy, it is important to understand several considerations: SIMPLE MATH: When firms make dividend payments, it is relatively common for the stock price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid. For example, an investor...
Read MoreJune 2012 Newsletter: Have we lost faith in the Future? Nobody “believes” in stocks anymore.
We heard the same basic lament at the FPA (Financial Planning Association) NorCal Conference we attended recently that we have been hearing from some clients for a few months now. Investors everywhere, it might seem are suffering from what might be called a loss of hope. We are grateful to Bob Veres, a financial writer we read and respect, for his thoughts in framing this message. A growing number of investors seem to believe that the world is coming apart, and therefore have no enthusiasm in investing in anything that depends on an optimistic view of the future. The specifics vary. It may...
Read MoreMay 2012 Newsletter: Brokerizing Financial Advice
Would you believe that in the aftermath of the financial crisis legislation has been proposed that will result in LESS consumer protection in finance? “Brokerizing” Financial Advice Under normal circumstances, we do not burden our clients with the details of the regulatory issues we deal with on a daily basis. Periodically, we send you required notifications such as our privacy policy and updated regulatory forms. Our focus is on communicating about your financial well-being. But recently, legislation has been proposed in Congress that we feel could adversely impact investors in general and...
Read MoreFacebook – Buy, hold or pass?
Soon you might have a chance to buy stock in one of the most impressive growth stories of all time as Facebook is expected to become a publicly traded company on Friday, May 18th. At the range of prices anticipated, founder Mark Zuckerberg becomes the latest uber billionaire. And in a case that should be discussed in business schools for years to come, private equity firm Accel Partners could turn a $12 million investment into a profit of over $7 billion. Who wouldn’t want to get in on this kind of gain? By the way, the seeds of that gain were planted in 2005. Our guess is most...
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