Jeff Benjamin

Investment Insights: The Blogblog

Jeff Benjamin breaks down the game for advisers and clients.

Aug 29, 2014

Ignore the bond bubble at your own risk

By Jeff Benjamin

The case for reducing fixed income exposure gets more vivid by the day. Ignore the bond bubble at your own risk. Debt hits 250% of GDP The financial markets have not yet fully digested President Obama's admission yesterday that he has “no strategy” for dealing with the ISIS terror group. But the White House has already gone into spin mode to try and walk back the statement. 'We don't have a strategy yet.' PricewaterhouseCoopers is heading to court to defend charges it gave bad accounting advice leading up to the MF Global failure. $1 billion lawsuit Another view of income inequality. The economic recovery has not been good for most workers. The majority of people are getting poorer From a stock market perspective, this Labor Day looks a lot like Labor Day in 1929. And we all know what followed in 1929. The final Labor Day of the Roaring 20s was pivotal ... Read full post

Aug 28, 2014

Smart beta, by any other name, is still smart

By Jeff Benjamin

Smart beta, the marketing gimmick that is sweeping across the ETF space. And for good reason. Unable to kill smart beta, critics love to hate it When it comes to active portfolio management, most investors are giving up gains to fees. A bad deal for most investors Corporate inversions aren't the only way to get around the punishing U.S. tax code. Companies hold billions in offshore accounts. Unpatriotic or just smart business? Beneath the surface of a roaring stock market, most Americans are downright bummed out. Feeling a permanent drag on the economy Spoiler alert: Most of the 'good-cause' festivals touted as utopian havens of wonderment and joy are actually just big-money capitalist ventures. Entertainment disguised as alternative ... Read full post

Aug 27, 2014

Central bankers are pushing the whole world into stocks

By Jeff Benjamin

Global equity markets swell to a record $66 trillion on signals from central bankers that low-rates are the status quo. Investors look past mounting geopolitical risks If retirement benefits are your primary goal, consider working for an oil company, a law firm, or become an airline pilot. It helps to work someplace where the average salaries are high ... and here are the 10 industries with the best 401(k) plans The yield on Germany's 10-year bund has never been lower, and it is fading fast. Europe's relentless inflation decline. Yield-free risk Australia is becoming the new high-yield bandwagon for wealthy investors. Demand and supply. $1.4B worth of junk debt issued over the last 18 months, versus zero two years ago Listen up, bosses, here are some simple ways to avoid undervaluing your employee. Common sense can go a long way ... Read full post

Aug 26, 2014

Warren Buffett's tax fairness doublespeak

By Jeff Benjamin

Warren Buffett, Mr. “I pay lower taxes than my secretary,” is helping to finance Burger King's takeover of Tim Horton's. Not putting his money where his mouth is Canada shows Congress and the White House how business gets done. The only sensible way to stop corporate inversions is to lower and streamline corporate taxes In the Fed's perpetual hedge, it now looks like rates will stay put until the fourth quarter of next year. Janet Yellen's labor market obsession Regardless of the Fed's dovish mode, bond fund managers are shaking in their shoes over the notion of higher interest rates. Losing 3% of your money “just like that” A simple and scientifically-proven way to avoid drinking too much wine. No word yet on how to avoid drinking too much beer. Seeing the glass as half-full ... Read full post

Aug 25, 2014

The Fed should raise rates, but it won't

By Jeff Benjamin

When the Fed is likely to raise rates and when the Fed should raise rates are necessarily the same. Don't hold your breath for higher rates anytime soon The thirst for diversification is driving more financial advisers to options investing. Three out of five advisers have used options in the past 12 months French government shows the world how to lead, by resigning. A new government to be formed on Tuesday. That was easy The SEC will vote on requiring sellers of asset-backed bonds to actually show the assets. Better late than never. Dodd-Frank to the rescue Another Obamacare surprise. Those tax credits are likely to wipeout millions of individual tax refunds. Oops. More than a third of tax credit recipients will owe some money back Corporate inversions have ground to a near halt since President Obama's July 24 assertion that such companies were 'corporate deserters.' When politics collides with the bottom line It turns out, your mom... Read full post

Aug 22, 2014

BofA settlement comes back to bite homeowners

By Jeff Benjamin

The flipside of Bank of America's giant mortgage settlement now looks like a giant tax bill for homeowners. Thanks for nothing, DOJ. 2 million homeowners at risk Warren Buffett gets all tangled up in the ever-expanding compliance web. Missed filing deadlines lead to $896,000 in penalties Mortgage shop makes aggressive push into financial planning. Pay close attention to the types of products being pushed. A three-year strategy Fewer S&P 500 Index companies are participating as the bull run pushes ahead. This kind of separation is rarely a good sign for markets. 'A sign to temper optimism' A handful of stocks on the receiving end of the ALS ice-bucket challenge. BIIB, AVNR, ISIS, SNY, BMY ... Read full post

Aug 21, 2014

A 20% allocation to gold? Seriously.

By Jeff Benjamin

If history is your guide, the case for owning lots of gold all the time is an easy one to make.With a 40-year compound annual growth rate of more than 7.5%, gold's long-term performance is second only to equities, at 8.2%.Jerry Wagner, founder and president of Flexible Plan Investments Ltd., is such a believer in gold that last year he launched the first and only registered mutual fund offering exposure to gold bullion.Mr. Wagner, who is responsible for nearly $2 billion under management, is now making the bold claim that a 20% allocation to gold is the appropriate exposure for a traditional portfolio of 60% stocks and 40% bonds.“Over the past 40 years, during periods including seven different types of crisis that investors fear most, gold has been the number one or number two performer, with just a 12% correlation to the S&P 500 Index,” he said. “The optimal allocation to gold over that period would have been 20%.... Read full post

Aug 21, 2014

Investors jump on the low-volatility bandwagon

By Jeff Benjamin

Taking a cue from the Fed, investors are placing big bets on minimal market volatility Speculating on the market's mood A stock market that is stubbornly resistant to bad news could be brought down by a shock of good news. It's a theory. When bad news is good news Bank of America's $17 billion mortgage settlement is not as bad as it appears for the big bank, and not as good as it could be for consumers. Settlement math Countrywide's Angelo Mozilo could finally get his day in court. Better late than never. Racing against a 10-year statute of limitations How corporations treat stock options, and how executives miss the mark. Extreme naiveté ... Read full post

Aug 20, 2014

Greenback rallies ahead of the Fed minutes

By Jeff Benjamin

The Dollar's shining moment ahead of the latest Fed minutes. Reading the Fed's tea leaves The Fed's annual Jackson Hole meeting and the markets. Past performance is no indication of future returns, but that doesn't mean we can't hold out hope. Pricing in dovishness Argentina tries yet another way to skin the cat. Re-writing the laws to dodge hedge fund creditors. "Excuse me if I get a little nervous …" Insurance companies increase efforts to outsource asset management, triggering a new growth spurt for institutional money managers. Projecting a 7.5% annual AUM growth rate Wishing you bought and held Google at the IPO, Aug. 19, 2004. 30.15% compound annualized return ... Read full post

Aug 19, 2014

Barclays rains on the equity market parade

By Jeff Benjamin

Barclays puts the breaks on the S&P by calling for a 1% gain for the rest of the year. And that's the good news. Equity price gains will weaken to 3% over the next decade Gold gains momentum as a safe-haven play just as stocks turn on the jets for another leg up. It is risk-on and risk-off at the same time. Hedging the bets The Fed's focus on inflation could be overlooking the risk of deflation. A case for how the Fed is getting it all wrong. There will be plenty of time to hike rates after the next recession Argentina's president takes to Facebook to call hedge fund creditors nasty names. We'll call this how not to negotiate with creditors. "The main thing with vulture funds is that they don't want a solution." Nasdaq's déjà vu. It's 2000 all over again but oddly different. Dark clouds hanging over the party What billionaires collect because they can. Steve Ballmer buys the Clippers, but Bill Gates prefers Da Vinci. Paying $2.1... Read full post

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