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Rising Geopolitical Risks and War Cycles

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Posted by Larry Edelson - The Edelson Wave

on Friday, 17 February 2017 17:44

It’s happening on cue: Over the last few days, some of the world’s most volatile nations are provoking the Trump administration big-time. Consider what’s happened …

Test #1. North Korea test-launched a new ballistic missile into the East Sea. The U.N. Security Council and Japanese Prime Minister Abe strongly condemned the act. President Trump says the U.S. has Japan’s back — but we both know that’s not going to deter North Korea’s military ambitions. It failed to stop the previous four launches.

What we know: North Korea is making great strides in advancing their nuclear arsenal, with a new mobile launching system and the use of solid (nuclear) fuel. The ultimate goal: Attacking the U.S. and its allies. This new arsenal is harder to detect and increases its range — both providing a greater threat to national security.

Test #2. Russia spy ship spotted cruising along the Eastern U.S. seaboard. The ship is armed with surface-to-air missiles and is used to intercept communications.

Test #3. Four Russian jets fly within 200 yards of U.S. Navy destroyer USS Porter in the Black Sea. Interestingly, the Russian jets had transponders off and unable to acknowledge multiple radio calls from the American warship.

Test #4. There were reports this week that Russia deployed a new type of nuclear cruise missile that’s in direct conflict with the 1987 Intermediate-Range Nuclear Forces Treaty with the U.S.

Screen Shot 2017-02-17 at 4.24.55 PMJust Coincidence?

It’s interesting how all these events are developing like a carefully orchestrated mission – in line with my war cycle forecasts.

Perhaps that’s why U.S. Defense Chief “Mad dog” Mattis prodded NATO member countries to pony up more capital into the defense fund. In fact, he’s looked for 2% of their GDP.

Officials from Germany and the U.K. agree, seeing the writing on the wall: It’s going to cost more to defend Western values in a challenging global environment.

But that’s exactly what I’ve been warning about since debuting forecasts of my war cycle research in December 2013. I said back then that the world would experience an environment of rising domestic and international unrest until at least 2020.

And that’s coming true in spades.

This geo-political hotbed could cause all kinds of economic and financial repercussions that could strip you of your wealth in the months and years ahead OR present once-in-a-lifetime opportunities to protect you and yours.

But it all depends on the quality of your guidance — and your ability to think for yourself, especially in times like these.

I know which way I’m headed … and which way I’m taking my subscribers and members.

Do you?

Best wishes, Larry @ https://edelsonwave.com



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Personal Finance

Here's a Shocker! Exceptionally High CDN Mutual Fund Fees

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Posted by Alex via Questrade

on Friday, 17 February 2017 12:07

  • 0576.featured large.png-550x0Canadians pay some of the highest mutual fund fees in the world
  • The opportunity cost of investment fees impact your portfolio
  • Small fee reductions can mean big portfolio growth

Cage match: how do your mutual funds perform?

Let’s look at two different funds invested in the same securities, returning an average of 6% per year before management fees. For the purposes of these calculations, we will be using the mutual fund fee calculator from GetSmarterAboutMoney.ca.

If you start with a portfolio of $100,000 and contribute $10,000 a year, how much does the higher fee fund cost you over 25 years?

Fund #1

Fund #2

Initial investment

$100,000

$100,000

Annual investment

$10,000

$10,000

Average return before management fee

6%

6%

Management fee

2.42% per year

0.77% per year

Average return after management fee

3.58% per year

5.23% per year

Total after 25 years

$624,603.50

$840,363.04


Investing in the fund with the lower fee means your portfolio is almost a quarter of a million dollars larger than it would be if it was invested with the fund with a larger fee. The same amount invested; the difference in returns is an incredible $215,759.54.

...read the whole article HERE



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Personal Finance

Precious Metals v. Mining Stocks: What You Need to Know

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Posted by The Morgan Report

on Friday, 03 February 2017 12:19

Most readers of this column own (or plan to own) physical precious metals – gold and silver, perhaps even some platinum or palladium. They may also own mining stocks.

But which category is "best"? It's like asking, "What's the most efficient exercise?" or "What's the best fishing lure?" Truth be known, it's really about what you wish to accomplish! Here is my considered opinion...

Precious Metals Offer Insurance First – Profit Second

One should strongly consider holding physical precious metals for "investment first, profit potential second."

The primary function of "metals in hand" is to help offset the possible loss of purchasing power that inflation or a changing business/regulatory climate might visit on a person's other asset classes, such as the broad stock market, real estate, collectibles, and certainly, bonds.

"The One-Ring" – Gold and Silver

gold-silver-ringThis last category appears to be ending a literal 30-year bull market, during which time interest rates declined (and bonds rose) to levels not seen in many decades.

(A change in the secular trend, to rising interest rates, would have severe ramifications for the value of bonds, whether or not they are held to maturity.)

A side advantage, common in India but not discussed in this country, is that gold and silver can be easily be "pawned" when a person might not have other options for a loan. Just like any item left in the pawn shop owner's care, precious metals can be redeemed when the loan has been paid off.

Indians have a much more nuanced – and relaxed – view about metals' ownership. Outlookindia.com takes the pulse about how its citizens deal with the idea of buying gold and silver, noting, "If you bought gold today and its price falls tomorrow, you don’t say, oh, wish I had not bought gold, I lost money. You just look at your gold and say, I have got 200 grams of gold. That’s it."

Mining Stocks Are Speculations



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Personal Finance

Don't Count on the Great Rotation

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Posted by Michael Pento - Pento Portfolio Strategies

on Monday, 30 January 2017 12:04

After many false promises and one false start, it is becoming evident that 2017 will be the year the Federal Reserve finally begins down the road towards interest rate normalization. Therefore, it is likely that Ms. Yellen will cause bond yields to rise this year on the short-end of the yield curve. In addition, soaring debt and deficits, along with the lack of central bank bond-buying, should send long-term rates much higher as well.

Wall Street soothsayers, who viewed every Fed rate cut as a buying opportunity for stocks, are now busily assuring investors that the potential dramatic and protracted move higher in bond yields will be bullish for stocks as well.

Their theory holds that the price of stocks and bonds are negatively correlated, as one moves up the other moves down. Hence, the nirvana of a safely balanced portfolio is achieved by simply owning a fairly even distribution of both. Therefore, according to Wall Street, the end of the thirty-five-year bull market in bonds will be a welcomed event for equities. This myth has a name, and it's known as "the great rotation from bonds into stocks."

The concept suggests that the investible market works like a balanced fund; as money moves out of bonds, it moves into stocks. And of course, you could cherry pick cycles over the past few decades that would provide support for this opinion. For instance, the biggest rise in interest rates (fall in price) was from February 1978 to November 1980. During this time the yield on the Ten-Year Treasury rose from 8.04% to 12.80%, while stock market averages enjoyed a healthy gain.

But when you take a step further back and look at the correlation between stock prices and bond yields since Nixon broke the gold window in 1971, you quickly realize that there is no such positive relationship. In fact, most of the time stock prices and bond yields move in the opposite direction. As bond yields increased (prices down) during the stagflation of the 70's, stock prices went lower or simply stagnated. Then, after Fed Chair Paul Volcker vanquished inflation in the early '80s, bond yields fell (prices increased) and stock prices went along for the ride.

This relationship makes perfect sense. An unstable economic environment of rising inflation and rising borrowing costs causes equities to suffer. Conversely, a healthy economic environment of steady growth and low inflation is beneficial for stocks.

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Personal Finance

“America Works… Never Bet Against America”

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Posted by Frank Holmes - US Global Investors

on Tuesday, 24 January 2017 08:42

COMM-never-bet-against-america-warren-buffett-01202017

And like that, it happened. Despite the polls, despite what anyone believed was possible, including many of his own supporters, billionaire developer Donald J. Trump was sworn in as the 45th President of the United States.

Whether you agree with him not, he’s now leader of the world’s largest economy and commander of history’s most powerful military force.

This is something that could only happen in the U.S.

President Trump and now-former President Barack Obama couldn’t be more different in their backgrounds, visions and leadership styles—more so than any other two men whose administrations happen to adjoin the other’s.

And yet the transition went remarkably smoothly and orderly.

I don’t believe there’s ever been such a meaningful and potentially consequential transfer of power in U.S. history, with the incoming president all but promising to undo every last policy of his predecessor, line by line. That Obama peacefully and cordially handed over the executive office to a man who led the charge in questioning his legitimacy for a number of years is a testament to the strength and durability of our democratic process.

It’s a process that’s key to America’s exceptionalism.

Although I don’t always agree with Trump, it saddens me to see so much negativity about him in the media and protests in the streets. Now that he’s president, the time has come to unite behind him and root for his success. If he succeeds, America succeeds. If he fails—as many seem to hope for—America fails.

Take Warren Buffett. He backed Hillary Clinton throughout the primaries and general election. And yet on the eve of Trump’s inauguration, he said he supported the new president and his cabinet “overwhelmingly,” adding that he’s confident America “will work fine under Donald Trump.”



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