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 ...
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 ...
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 ...
This is a great interview with TD Ameritrade's CEO Fred Tomczyk where he mentions their customers accounts have high margin balances, little cash and that they're fully ...
In this article, Joe Kukura highlights comments from Mark Cuban to Mark Andreessen highlighting a lot of froth in the technology sector. To quote a friend of mine, "there's a difference between value and valuations" and currently, there's a big disconnect between the ...
It's a very interesting time in the markets when by almost every measure, US stocks are overvalued and global government bond yields are at unsustainably low levels. Germany's 10 year bond is now below .10%. What's a German investor to do! Buy stocks of course and US Government bonds since besides the 1.80% yield, you can also have currency gains (or losses) as well. Central banks have been easing at an unprecedented pace, yet GDP is not responding like it has in the past after a major recessions. In my opinion, I feel the seeds are being sewn for another 2008 type environment sometime in the coming years. With European QE coming to the party late, I believe the ...
