Tend to Your Garden

Posted on April 30, 2013 by MN Gordon

Tomorrow’s the first day of May.  You know what that means…  If you follow the old adage, ‘sell in May and go away,’ you should sell your stocks.  It may be hard to believe, but this is more than just a catchy rhyme.  This advice actually has a good track record.

In fact, most years this has turned out to be a successful strategy.  According to the Stock Trader’s Almanac, if you invested $10,000 in the Dow in 1950 and held the money in stocks from November through April each year, you’d have had $684,073 by the end of 2011.  But if you’d invested that same $10,000 in the Dow in 1950 and held it from May through October each year, by the end of 2011, you’d have lost $1,024.

That’s quite a dramatic difference, wouldn’t you say?  Yet if you’re still not ready to sell, there are several other reasons for easing up on stocks you may want to consider…

Consumer sentiment, as measured by the Thomson Reuters/University of Michigan index, fell in April to a three-month low.  Remember, consumer spending accounts for 70 percent of the economy.  When consumers cut back on spending the GDP takes a hit. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , , | Leave a comment

Seeing Through the Mirage

Posted on April 26, 2013 by MN Gordon

Buried far below the headline’s reporting Apple’s quarterly earning’s report Tuesday evening was a most curious headline…

“Lance Armstrong sued by U.S. for post office sponsorship funds.”  CNN.com offers the particulars…

“The Justice Department late Tuesday formally filed its case against Lance Armstrong and his company Tailwind Sports for millions of dollars that the U.S. Postal Service spent to sponsor the cycling team.

‘“The USPS paid approximately $40 million to sponsor the USPS cycling team from 1998 to 2004,’ the court document says.

“The government said it was intervening to recover triple the amount of the sponsorship funds under the False Claims Act, which could bring a total of more than $100 million in damages.  The complaint filed in U.S. District Court for the District of Columbia charges that the use of prohibited drugs constitutes a breach of contract with the Postal Service.”

Obviously, Armstrong shouldn’t have cheated by using performance enhancing drugs.  What’s more, he shouldn’t have lied about it all these years. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | Leave a comment

Do You Have the Conviction to Get Rich?

Posted on April 23, 2013 by MN Gordon

The May edition of National Geographic magazine has the cover story headline, “This Baby Will Live to Be 120*.”  Pictured below the headline is an adorable baby.  The asterisk’s footnote to the right reads, “It’s not just hype.  New science could lead to very long lives.”

We don’t doubt the possibility.  Less than 100-years ago, before sanitary sewer separation and Alexander Fleming’s discovery of penicillin, lifespans were much shorter.  Bacteria and infections would commonly wipe people out before they turned 50.

According to National Geographic, the next bull market in life expectancy may be in gene mutations found in people who are genetically isolated.  Somehow these mutated genes prevent life shortening diseases.

For example, Ashkenazi Jews have mutations that limit high blood pressure and lower the risk of Alzheimer’s.  Amish, from Lancaster, Pennsylvania, have a mutation that lowers fat in the blood.  Gene mutations found in Japanese Americans lessen the chance of heart disease and cancer. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | Leave a comment

Will Obama’s Chained CPI Help Keep Inflation from Eating into Your Savings?

Posted on April 19, 2013 by MN Gordon

Will Obama’s Chained CPI Help Keep Inflation from Eating into Your Savings?
By Dennis Miller, Editor, Money Forever

This week we examine ways in which inflation nibbles away at your retirement income, especially in light of the President’s proposal for Chained CPI adjustments to Social Security.  The formal title is Chain-weighted Consumer Price Index and it’s a variation of how the government figures out what is what we would call “inflation.”  Either way, with the low rates on offer from CDs and other “safe” investments, investors who don’t take action fall behind every year.

Unfortunately, the numbers show what most people don’t want to face: the days of relying on Social Security plus a few stable bonds and CDs are long over.  To earn decent and sustainable returns, investors must search beyond traditional safe havens.

Adjustments to benefits are based on the Bureau of Labor Statistics’ (BLS) CPI-W Index, measuring prices for urban wage earners and clerical workers.  The idea behind the CPI-W adjustment is that since urban wage earners and clerical workers have constrained incomes, they will shop in a thrifty manner, similar to retirees. Continue reading →

Posted in Dennis Miller, Stock Market | Tagged , , , , | Leave a comment