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Great Weekly Resource image

I get asked at times what resources I use which help us make decisions.  There's so much information out there about investments and markets that it can at times be overwhelming to decide what to read.  This on top of the talking heads on CNBC and Bloomberg which will make news out of just about anything.  One of the resources I enjoy is 361 Capital's weekly blog. Enjoy this week's edition by 361. 361 Capital Blog     Investment advisory services offered through Proper Wealth Management, LLC, a registered investment adviser. This site is published for residents of the United States only. Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response ...

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Of Course You Know How Much You’re Paying (Don’t You?) image

When I ask people how much they're paying for their current wealth management or investments, what I often hear is "I have no clue".  I find this very odd since most of my clients are entrepreneurs and C level executives who are able to calculate complex ROI's for content marketing, adwords and a variety of other things.  They hire vendors and employees on a constant basis and consistently look at cost-benefit analysis (even if it's back of the napkin).  Few of these clients would ever hire a vendor, service provider, employee, etc. without first knowing the cost.  Yet most people have no clue what they pay for investment advice or financial planning unless it's a flat fee. My industry has ...

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China’s Stock Market Surpasses $10 Trillion image

There was a great article in Bloomberg regarding China's stock market valuation.  China's stock market value reach $10 Trillion, an increase of almost $7 Trillion in 12 months.  The increase is bigger than Japan's entire stock market. Individuals are borrowing to invest as valuations are now the highest in 5 years and margin debt is at a record high.  This is combined with China's weakest expansion since 1990. This aligns with our views that markets across the globe are reaching bubble territory and investors need to be  careful. To read more, click ...

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Goldman Says Stop Buying Back Your Stock to Companies standard

There's a great article today in Bloomberg where they quote Goldman Sachs telling companies to stop buying back their own stock at these elevated prices.  They go on to say their cash is better used to purchase other companies.  Most companies in the S&P 500 are trading at greater than 18 forward earnings estimates.  There's also an argument that companies are better off having that cash on the sidelines to increase liquidity and use when earnings multiples are more attractive.  You can see from the chart below which I took from the article that buybacks are now reaching their 2007 highs and might surpass it this year/next year. As I heard the other day from a friend, trees don't grow ...

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The Case For Europe standard

As an investment advisor, I am always looking out at the investment landscape for attractive risk/reward opportunities.  As things stand today, I see limited upside in US stocks and a better risk/reward case for allocating towards European stocks.  The ECB has just begun their quantitative easing (QE) program and has a lot of room to go.  I'm a big fan of Henderson Global Investors and believe they slice and dice data in unique ways.  I have attached their recent report for you to read. Effectively, the reason I like Europe over US and a summary of the slides in the attached presentation are: since government bond yields are low and not likely to rise anytime soon, investors will be forced to ...

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How Fees Can Hurt Growth standard

Below is a link to a Barron's article which references a 15 year experiment by Paul Merriman where he invested similar amounts of money at Fidelity and Vanguard is essentially the same portfolio.  He started with $100,000 and ended up with $225,650 at Fidelity and $268,359 at Vanguard.  This is a meaningful difference that would only grow over time and would look much larger if he started with more than $100,000.  Most investors don't know what they own, let alone what fees they are paying.  On our website under fees (https://properguidance.com/services/investment-strategies/), we discuss this briefly.  Mutual funds are almost always higher cost than ETF's when you consider soft dollar costs, transactions costs, tax consequences, etc, which they often don't have ...

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A Quick Thought on the Euro and European Bonds standard

This is just a quick thought on the Euro and European government bond yields.  We've seen a dramatic increase on a percentage basis on yields in European economies (Germany's 10 year bond went from .08% to over .70% in a manner of weeks) and I've read several articles about reflation and higher inflation expectations off of very little economic data.  While the rise in yields have been dramatic, they've been at extremely low levels and are still extremely low by any standards.  I believe we could see bond yields across Europe continue to rise depending on what language and news surrounds Greece and their willingness to agree to creditor's demands.  I also believe you could see the Euro fall versus ...

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Stock Exchange Margin @ All Time High standard

I was reading a variety of different articles last night and was brought to a link (included below) which shows all of the outstanding margin debt in the US stock market.  As of March, margin debt hit an all time high of $476 Billion.  Another statistic that isn't reported is all of the pledged loans that occur at the large brokerage firms.  This is regulated under a different section called Reg U (Reg T is for margin) and isn't reported the same way so we can't see the amount of credit that's been extended under these accounts.  In my experience at Morgan Stanley, Credit Suisse and UBS, they "pushed" advisors to having clients establish pledged loans because the rates ...

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