Jeff Benjamin

Investment Insights: The Blogblog

Jeff Benjamin breaks down the game for advisers and clients.

Oct 30, 2014

Vanguard's John Bogle beats the low-fee drum, takes a fresh swipe at active management

By Jeff Benjamin

Vanguard's Bogle says unless you make fees a top priority, your retirement plan will suffer, and the financial “industry doesn't give a damn.” Highlights from the Bogleheads' annual meeting Cheap oil adds up to more bad news for gold investors. The ratio between the two commodities is at a 17-month high, signaling that gold is now relatively expensive. Inflation concerns fade into the background Overstating the Fed's bond-buying wind-down has become a financial media bandwagon that I refuse to ride. Let's not overlook that whopping $4.5 trillion portfolio that the Fed will now be managing from now till who-knows-when. It's a gross overstatement to call this a hawkish move As the Fed takes another baby step toward less quantitative easing, it has conveniently overlooked providing any kind of assessment of whether the big, expensive experiment did any good for the economy. The lack of conviction is understandable and, sadly, ... Read full post

Oct 29, 2014

Decision day: What Fed policy makers will have to say

By Jeff Benjamin

What will Fed policy makers say, and how will investors respond? Fed decision day guide: FOMC seen focusing on too-low inflationSome folks think investors shouldn't focus on the Fed. With the Federal Reserve, timing isn't everythingYou're working hard to be successful. Watch out for these traps. 8 common habits that destroy your successOne of the most anticipated third quarter earnings report just came out. Thumbs up or thumbs down? Facebook warns of increased spending; shares fallIf you are excited about private equity for your wealthy clients, you might want to take those bulky returns with a grain of salt. SEC probing private equity performance figures - sourcesIn case you missed it: The Royals beat the Giants Tuesday to force Game 7 tonight in baseball's World Series. Royals beat Giants ... Read full post

Oct 28, 2014

ETF investors bail on the financial sector

By Jeff Benjamin

Investors do the math on low interest rates and turn tail on a popular financial sector ETF. More than $900 million pulled from XLF last week to mark the worst stretch since 2009. The prospects are not strong Prudential Financial steps out on a limb by providing reinsurance on a $2.2 billion annuity portfolio at Legal & General Group in the U.K. The spooky part of the bet is that the reinsurance is guarding L&G against the risk that pension beneficiaries live longer than expected. I hate it when that happens. Prudential ran the numbers on longevity risks Savvy investors tap into the obesity epidemic. Let's face it, diet fads are interesting, but the real money is made by betting that people will continue eating at McDonald's. Double down with a healthcare-sector ETF Corporate inversions embrace the latest loophole in the form of government lawyers who go private. Where there is a will and a pile of money to be made, there is a lawyer... Read full post

Oct 27, 2014

Fed flirts with leaving taper on the table

By Jeff Benjamin

No matter what the Fed says this week, quantitative easing will be with us for a long time. But letting the bond-buying continue will say volumes about the overall weakness of the U.S. economy. Doves are running the show Gold feels the flipside of stronger global economic data. Gold bugs might grumble, but the rest of us should be a little happier about not needing a safe-haven asset at the moment. Prices of the commodity steadied, but still coming off a three-day slide The latest stress test finds the list of failing European banks is shrinking. This is European-style progress. Beggars can't be choosers. The delicate balance of curing the economy without killing it Before getting too giddy about stock buyback announcements, consider a few possible downsides. Sorry for raining on the parade. They can hurt profits, and they can be driven by executive compensation ... Read full post

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

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