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Wealth Building Strategies

Storm Advisory—What You Need to Know Now

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Posted by Frank Holmes - US Global Investors

on Wednesday, 09 August 2017 06:52

COMM-fed-monetary-easing-trump-fiscal-agenda-stalls-storm-08042017-1

In July, the Institute for Supply Management’s (ISM) Non-Manufacturing Index fell to an 11-month low of 53.9, 3.5 points below its June reading of 57.4. The index measures the non-manufacturing, services industries such as food services, education, real estate, health care and more.

U.S. ISM Non-Manufacturing PMI sinks to 11-month low in July
click to enlarge

Economists had expected a reading closer to 56.9, so it’s safe to call this a disappointment. Although the index is still above the key 50 threshold, where it’s held for 91 straight months now, the slowdown suggests that “the economy may have lost some momentum going into the third quarter,” as Capital Economics’ Andrew Hunter said in a note last week.

Following this report, it’s possible we’ll see the U.S. dollar rally before pulling back even further. Having hit a 15-month low last week, the dollar looks oversold and ready for a “retracement,” as CLSA’s Christopher Wood put it.



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Wealth Building Strategies

The Black Hole

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Posted by William Koldus - Seeking Alpha

on Tuesday, 01 August 2017 06:14

Summary

- Apple, Alphabet, Microsoft, Facebook, and Amazon are now the five largest U.S. market capitalization equities.

- Collectively their performance in 2017, the past three years, and the past decade has been amazing.

- They have also absorbed a tremendous amount of capital, sucking it away from other opportunities, and their run may be ending.

"A 60:40 allocation to passive long-only equities and bonds has been a great proposition for the last 35 years … We are profoundly worried that this could be a risky allocation over the next 10." -- Sanford C. Bernstein & Company Analysts (January 2017)

"Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria" -- Sir John Templeton

Life and investing are long ballgames." -- Julian Robertson

Introduction

For active, value-orientated investors, the current bull market in U.S. stocks, which began in March of 2009, has been one of the most difficult bull markets to navigate in history. Said another way, it has not been anything like a day at the beach.

Keeping up with the market, without owning the five biggest market capitalization stocks, which are all large-cap growth stocks and listed in order of size, Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Facebook (FB), and Amazon (AMZN), has been nearly impossible.

A strong performance by the largest stocks spurred investors, speculators, and fund managers to allocate to these equities in ever-greater quantities, creating a self-reinforcing circle of buying exacerbated by the continued inflows into passive index funds and ETF funds.

So what is an investor to do?

The answer is that it may finally be time to step outside the black hole that is consuming a disproportionate amount of investor's capital. Simply avoiding shares of AAPL, which I was bullish on previously, GOOGL, MSFT, FB, and AMZN could be one-key to investment outperformance over the next decade.

Thesis

The largest companies have consumed investor capital at an ever-increasing pace, forcing more and more investment managers to become closet indexers, closing active investment strategies, and creating a bigger opportunity for the remaining active investors.

The Five Biggest Are the Primary Culprits

Apple, Alphabet, Microsoft, Facebook, and Amazon have had extraordinary performance in 2017. AAPL shares are up 30% year-to-date, GOOGL shares have gained 21%, MSFT shares are up 19% in 2017, FB shares lead the pack with a remarkable 50% year-to-date gain, and AMZN shares are up a strong 36% even after their minor stumble Friday.

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....continue reading HERE

 



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Wealth Building Strategies

Inside the Mind of a Crowd

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Posted by Matthew Kerkhoff - Financial Sense

on Wednesday, 26 July 2017 07:16

layeredcrowds6000pxwideJohn Maynard Keynes once wrote what may be one of the most insightful observations on financial markets ever conceived:

We have reached the third degree where we devote our intelligence to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth, and higher degrees.

Now, what exactly is he talking about?

While it sounds like Keynes may have been practicing some rare form of martial arts, or Zen meditation, he was actually talking about financial markets … in particular, how to predict them.

....continue reading HERE



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Wealth Building Strategies

The Role of Gold in Your Portfolio

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Posted by Greg McCouch via 321Gold.com

on Friday, 21 July 2017 07:17

Gold is the most misunderstood asset class in the financial world.

I remember when I first understood this and how enlightened I felt when I realized the true value of gold in one’s possession. I was 23 years old.

Because I was asked to speak at multiple conferences lately, I decided the time was right to explain the true nature and importance of gold in one’s portfolio, a concept that most modern investors simply do not understand or grasp.

Based on the responses I received after delivering this talk, it was evident the information I shared definitely struck a chord with those in attendance.

The information presented below is the content of my talk at those conferences. The first slide in my power point presentation was a quote.
Gold is the currency of monarchs,
Silver is the currency of the educated,

Barter is the currency of the working class, And Debt is the currency of slaves
Author Unknown

The second slide was this graphic below which was a statement that J.P. Morgan made while testifying before Congress in 1912. 

Screen Shot 2017-07-21 at 6.39.47 AM

....continue reading HERE



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Wealth Building Strategies

Prepare for Turbulence

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Posted by John Mauldin - Mauldin Economics

on Monday, 10 July 2017 08:04

170709-01Prepare for Turbulence

Afraid of the Truth
We Couldn’t Take the Chance
Policy Brick Wall
Least-Bad at Best
Getting Out of Dodge
Global Contagion
Barefoot on the Beach

“The job of the central bank is to worry.”

– Alice Rivlin

“The central bank needs to be able to make policy without short-term political concerns.”

– Ben Bernanke                                                                                                          Photo: Monica Muller via Flickr

“… from the standpoint of the overall economy, my bottom line is we’re watching it closely but it appears to be contained.

– Ben Bernanke, repeatedly, in 2007

“Would I say there will never, ever be another financial crisis? You know, probably that would be going too far, but I do think we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.”

– Janet Yellen, June 27, 2017

“My good friends, for the second time in our history, a British Prime Minister has returned from Germany bringing peace with honor. I believe it is ‘peace for our time.’ Go home and get a nice quiet sleep.”

– Neville Chamberlain, September 30, 1938

The way we assess problems depends on our perspective. People can look at the same set of facts and reach quite different conclusions based simply on their circumstances. This is why it’s good at times to get away from your normal environment. Listen to a wide variety of opinions. Read books outside of your comfort zone. You’ll see things differently when you return.



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