Jeff Benjamin

Investment Insights: The Blogblog

Jeff Benjamin breaks down the game for advisers and clients.

Oct 24, 2014

The Fed's QE sleight of hand: Please ignore that $4.5T balance sheet

By Jeff Benjamin

The Fed's dirty little secret: Tapering might end this month, but there's no end in sight for quantitative easing. Pretending the U.S. economy is getting stronger doesn't make it so. A $4.48 trillion balance sheet takes on a life of its own Doing the global math on cheap oil. A mark in the win column for the world economy, but a closer look highlights some sore spots out there, including the U.S. shale boom.Enjoy it while it lasts Schwab's licensing agreement with Morningstar offers advisers and individual investors backdoor access to some premium-level research. Sweetening the pot for custodying assets at Schwab Just when you thought the Ebola media hype was winding down, a doctor tests positive for the virus in New York. Brace yourself for another wave of analysis, fear, and misinformation, all before the first commercial break. Ebola hysteria, the Big Apple way In terms of retirement savings goals, $1 million is still a pretty... Read full post

Oct 23, 2014

Holiday spending can't come soon enough for the economy, markets

By Jeff Benjamin

Calling all consumers. The markets now have their fingers crossed that consumers will step up once again and rescue the economy. Just spend, baby. Take that money you saved on cheaper gas and go buy something, please Social Security is becoming a little less secure thanks to a floundering inflation rate that pushed next year's cost-of-living increase up about 20 bucks a month for most seniors. An added whammy is the reality of earning next to nothing on fixed income investments When gold and platinum prices are running in stride investors have a decision to make. The scary notion of what the drop in platinum says about world growth expectations Market caps gone wild. Should Facebook really be worth more than IBM? Tech titans moving in opposite directions Office life has never been so mundane as meetings multiply, and drag on and on. Battling for an open conference room ... Read full post

Oct 22, 2014

The Fed struts its market-timing skills to inject a sense of calm

By Jeff Benjamin

The Fed proves to be the ultimate market timer, as well as the puppet master. The safety net is getting thin and frayed, but it's still miraculously hanging in there. 'We've got your back' Not that Pimco is asking, but Mohamed El-Erian is still saying 'no' to the idea of returning to his former gig now that his former boss, Bill Gross, has left for Janus. 'I'm really happy with my life' Turns out that economists, like meteorologists, can get it way wrong and are rarely held accountable for their forecasts. Asked six months ago if interest rates would be higher by now, 100% of economists got it wrong. Being generally skewed toward higher rates The unfolding global currency war is becoming a test track for fueling inflation, not growth. 'The beggar-thy-neighbor policy is not about rebalancing' The business risks of Ebola. Everybody can't call in sick at the same time. In the U.S., worry vast exceeds the presence of the virus BlackRock... Read full post

Oct 21, 2014

The bitter economic costs of cheap oil

By Jeff Benjamin

Cheap oil threatens the U.S. energy boom and the fallout is not optimal. In the shale business it's not as easy as just reducing production. West Texas Intermediate crude prices are down 23% since June Banking on a rising dollar. While still not at full speed, the U.S. economy is ahead of the global recovery cycle and there are reasons to believe the resurgence of the dollar is just beginning. Paying less for foreign goods and services Making the case for investing in bond funds gets tougher by the day. No longer the safe side of the portfolio. One-day Treasury bond rallies are not why you hold bonds Bullish billionaire Paul Tudor Jones expects U.S. stocks to crush the globe for the rest of the year. 'The piper will be paid one day' Taking advantage of increased market volatility. It's not all about ducking for cover. Hedging out the bumps ... Read full post

Oct 20, 2014

How leverage led the market sell-off

By Jeff Benjamin

Leverage is being singled out as the source of last week's sell0off. When the fur is flying, you sell what you can, not always what you want. 9.6 billion shares a day changed hands on U.S. stock markets last week; more than double the final week of August Market turbulence is seen lasting at least through the Nov. 4 mid-term elections. Keep in mind that the upside of volatility is that it moves both ways. 'Definitely a buyable dip' The economic tragedy of Ebola. This will not make you feel better. Sick people cannot work. Scared people will not work. Roth 401(k) give Roth fans another option, but time will tell if the IRS can keep up and if Congress can keep away. Combining traditional and Roth plans adds a smart retirement planning tool When Robert Shiller starts to doubt his own CAPE ratio, the pace of change in the financial world starts to get scary-apparent. Regardless the reasons, selling is increasing and there is not much... Read full post

Oct 17, 2014

Fattened by the Federal Reserve, the markets want more

By Jeff Benjamin

The markets are looking to the Fed for help, any help at all. Is it possible the end of quantitative easing could be later, rather than sooner? Seeking a lifeline in a single phrase or reference Hawkish Fed member gives the nod to extending quantitative easing beyond October to appease and calm the financial markets. Seems like somebody should have realized a long time ago that a big, fat market fed by the Fed will always want more, not less. Putting a taper delay on the table Gold is back as the safe choice. If it seems obvious, that's because it is. GLD has erased losses for the year Investing on leverage might be less risky than other forms of borrowing you are probably already doing. If you own a car or a house you're already doing it ... Read full post

Oct 16, 2014

Market strategists unbowed

By Jeff Benjamin

The rout in stocks has not pushed market strategists to cut their year-end forecasts. It's just going to take a bigger rally to get there. S&P 500 rout leaves Wall Street unbowed as tide ebbs on calls But that resolve could be tested today. Treasuries gain as oil drops below $80 while stocks slide It's heat of earnings season and some of the numbers look good. Goldman Sachs profit gets big boost from bond market pick up Here's what some pundits say will lift the stock market out of its funk. Go to Switzerland for skiing, not for annuities If Fed chair Janet Yellen was facing a conundrum yesterday, it's worse today. What the heck should the Fed do now? Thursday is Day 2 of InvestmentNews' Fourth annual Alternative Investment conference. Follow all the action on Twitter at #alts2014 ... Read full post

Oct 15, 2014

Buckle up for more volatility

By Jeff Benjamin

Amid the stock market's gyrations, one thing is clear: Volatility will be around for some time. So buckle up. Stocks are tumbling, oil is sinking, and bonds are going vertical Several signals point to an improving economy but you wouldn't know it looking at consumers. The reason Americans are spending less. And there's this: The reason Americans are spending less Investors are giving Fed chief Janet Yellen her first real test as they send markets reeling over worries about economic growth. Curse of the new Fed chief? If someone you know is pitching Swiss annuities, just walk away. Go to Switzerland for skiing, not for annuities How is Bill Gross doing i his new gig at Janus beyond money flows and performance? Well he's got a smaller office. Can you cram Bill Gross into 2,500 square feet a 5-Minute walk from Pimco? Yes' Shameless plug: InvestmentNews' Fourth annual Alternative Investment conference starts today in the Windy City.... Read full post

Oct 14, 2014

When in doubt, follow the bond market's lead

By Jeff Benjamin

As the Fed frets over inflation, the bond market has already made up its mind and moved on. With motives and ulterior motives as your guide, especially considering how intertwined monetary policy has become with fiscal policy, the smart play is to trust the bond market. Bond traders show little fear of inflation Once again, it all comes down to the consumer. Now, go out and spend money. It's good for the economy and it feels good because the dollar is strong and stuff is getting cheap. Global unrest has never stopped a U.S. consumer from buying a new T.V. Abigail Johnson takes the helm at Fidelity, ascending to a job for which she has been groomed for many years. Already president, the new CEO title described as 'largely ceremonial' Calvert Investments finds its next CEO in Oregon at Portfolio 21. John Streur will take over for Barbara Krumsiek in January Artists and supermodels became contra-indicators as currency speculators. 'I... Read full post

Oct 13, 2014

Earnings season shapes up as the next test for the markets

By Jeff Benjamin

Third-quarter earnings could be the next reality check for stocks, and for investors. As the reports start rolling out this week there are reasons to worry, but not panic. The five-year corporate earnings love story heads for a rough patch An OPEC rift is fueling an oil price war that will provide relief at the pump. But the ultimate objective is to tamp down U.S. energy production. Pushing for the breaking point of $76 a barrel Plunging oil prices are spooking the markets. The ripple-effects of the supply-side shock could mean red ink for energy stocks. The factors opening the trapdoor beneath oil prices A rare hawkish tone out of the Fed suggests the global economy will not suffer much from a rate hike in the U.S. Preparing market participants for what lies ahead Advisers get high marks from clients in the latest Cerulli report, and that satisfaction level is helping advisers carve out a bigger piece of the defined contribution plan ... Read full post

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