One of my goals in my newsletter is to bring to your awareness things that I find interesting or alarming.
The article below is in the “alarming” category.
Japan borows more than it raises in taxes, and its debt amounts to two years’ worth of Japan’s economic output.
Japan has the highest debt-to-GDP ratio in the world. Half of the country’s tax income is directed to simply servicing it’s debt.
In addition to Europe and China (which I’ve written about in the past), Japan is one of the next huge players we’ll be unraveling in the future. I have great concerns about investing in Japan, and a Euro-Pacific investment is the most troublesome to me.
Be careful if you have that allocation in your portfolio.
What an interesting month! Who would have thought it would turn out to be such a good month just a short 3 to 4 weeks ago? Many people actually, if you seek out alternative voices to that which you see in the daily paper or newscast. I talk about this in this week’s video below.
Also, I talk about how you should assess the level of communication in the past 2 to 3 months from your adviser. Did you hear from him/her? You sure as heck should have.
Lastly, now is a great time to get back to basics.
Click on video to hear more.
GWM- Video Transcript- 28 October 2011- Information, Communication, Basics
Hi there, Mike Brady with Generosity Wealth Management, here in Boulder, Colorado. It’s been a few weeks since I’ve done a video and sent a newsletter out. But my last video was about fifteen or sixteen minutes, and that was pretty long compared to my previous ones but I had a quarterly review and lots happening in the third quarter.
Today I’m thinking about two or three different things; the first one is information, the second is communication and the third is kind of getting back to basics.
Let me tell you what I mean by that; information. Three, four weeks ago, let’s not kid each other, you could not open up a newspaper or a magazine or watch, you know, some nightly news telecast without it all being negative. “If it bleeds, it leads.” And one of the responsibilities, I believe, of an investor and your financial advisor is not to get into a bunch of group think. I remember back in 1999, early 2000, when the internet boom was going on, if you poopa’ed any kind of an internet stock or tech company- you were just like “old thinking.” I remember Warren Buffet back in in 1998, 1999, was at a big conference of some type and yeah, there were all these internet people saying “oh God, he’s old thinking” “he needs to get with the new economy.” And, you know what, that took courage on his part, (of course he had a few billion behind him) to say “listen, I believe that your analysis is incorrect.”
Well frankly, three or four weeks ago everyone was saying the market stinks and the economy stinks, and there’s no way that it can go but down. And, that’s just not the case. I’m glad that the last quarter, excuse me, the last month has been a good month. Do I know exactly where it’s going to go-if it’s going to continue on its upward trend, is it going to reverse and go back to the down? No, I don’t. But I say that very humbly. And I watch things very closely. And I’m going to continue to have the right percentages.
I am going to next week, (assuming nothing major happens), in the next week or so, I’m going to do a video that I did about two or three months ago on information and confidence in your information. I did the video, and then so much stuff was happening in the month of August that I kind of had to put it in the can, I had to kind of put it to the side. But I want to do that because it is so relevant. I just listened to it before turning on this video, my camera here and I think it’s great and I’m very excited to share that with you.
Second thing is communication. A financial advisor sure as heck should reach out to clients and sure as heck should have been communicating with you. Because if you only hear from a financial advisor when things are going well, that’s a problem- in my opinion. You pay a financial advisor to help you, to set up a plan to hold your hand, you know sometimes, in the difficult times.
If you’re my client, you know that I gave you a call; that I reached out to you and that you’ve always got these videos and blogs and newsletters.
The last thing that I want to talk about is getting back to the basics. You know, I’ve always talked about estate planning, and tax planning, retirement planning. These are absolutely the core, essential pieces of what you should be doing for yourself. The market is going to go up, and it is going to go down, OK? I’m just telling you that. Up, down, sideways, three ways the market goes. And reassess for yourself how you felt this last quarter, and did you completely want to go off and completely change everything? No! (Hopefully not.) You need to have a plan, yes it needs to be modified accordingly, but hopefully you’re in partnership with somebody who will help tell you when “wow, we need to radically change this,” or only minimally change it, or maybe do nothing. That is proactively doing nothing is still doing something, OK? And so make sure that you get back to the basics; is your portfolio in line with what your risk level is? I think that’s absolutely essential and that’s some of the best advice that you can get.
Now I believe going forward that we’re going to have, so maybe I’m thinking of four things (!), I think we’re going to have some volatile markets and this is an opportunity for some tactical allocation, some dynamic asset allocation. So one of the things that I’m going to be talking about in the next quarter or so, for clients, is how that plays into your portfolio.
I think there are certain markets where this is… where having a more actively managed portfolio makes sense. And I think going forward that is going to be the situation because we’re having various trading ranges, increased volatility and lots of range trading and ex cetera.
So, anyway those are some of my thoughts. I guess it’s not quite as short a video as I thought. Sorry about that. But well, you could have hit pause at any time during this video!
Anyway, Mike Brady, Generosity Wealth Management, 303.747.6455. I would love to hear from you. If you’re my client I absolutely love you. If you’re not my client, I like you, but I’d love to get to love you. So please give me a call, or an e-mail; mike@generositywealth.com.
But anyway, you have a wonderful, wonderful day and a wonderful week, and we’ll talk to you later bye bye now.
Debt Ceiling, Greek and European debt issues, bad global recession…..
Should you freak out? Time to move the cash to the mattress? I don’t think so.
Here are my current thoughts……..
TRANSCRIPT:
Hi! Welcome to the Generosity Wealth Management weekly Video/ Newsletter.
And this is the last week of July and what is really hot topic in the news right now is the debt ceiling negotiations; you know, should you panic, should you freak out, should you change your portfolio? And I have to tell you that I am actually more optimistic than pessimistic; which is in favor right now. That is kind of the easy thing to do. I mean we joke in our industry that economists have predicted ten of the last two recessions, and I don’t want to be that guy.
We’ve spent the last ten weeks downgrading the S&P 500, earning expectations, and we’ve heard from about 2/3 of the S&P 500, for the second quarter and surprise- 75% of them have exceeded those pretty low expectations. Right now companies have a huge amount of cash that they’ve been hording. Cash is ridiculously cheap right now. You’ve got earnings, their efficiencies are good. I continue to be somewhat optimistic about the second half of the year. I said that three weeks ago and I have not changed my opinion that we’re looking at some big abyss, some crevasse that’s going to hit us. I just don’t see that.
We’ve got three things that I’m really kind of paying attention to; we’ve got the GDP that’s coming out this Friday; we’ve got more earnings estimates that are coming out; and then we’ve got this debt ceiling.
If I have to guess on the debt ceiling-we’re going to kick the can down the road for a bit. It’s going to be relatively short to mid-term increase in the debt. Just enough to keep the newspapers in business with headlines. You know we’re going to be hearing about this for the next six to twelve months, irritatingly. But it is what it is.
The market as a whole is pretty much back to where it was in April before this correction. And with all these other things it’s actually surprisingly held its own. And as I mentioned we’re going to be looking at the GDP, we’re going to be looking at the debt, we’re going to be looking at the earnings. The earnings are looking good. The debt, I think, when the world doesn’t end on August 2nd, is going to be less of an event than what you’ve been led to believe.
And then going back to the GDP estimate, which is not really sure what. It’s been having some bad numbers, frankly, in the last couple of months. But the others are looking good.
Plus, I mean, the opportunities, just abysmal opportunities in bonds, kind of leads me to, and all the cash that been kind of on the side lines, kind of leads me to believe that this is going to be a good thing for August, September- not necessarily a bad thing.
So I’m going back to feeling good about my assessment at the beginning of the quarter.
Anyway, my name is Mike Brady. I am an integrated, holistic, comprehensive wealth management firm, here in Boulder, Colorado, but I have clients throughout the United States. My phone number; 303.747.6455. You have a wonderful week, and I’ll talk to you later.
As I mention in my video above, Greece is a fascinating story unfolding. I wish it was only Greece, but we have a few other countries in Europe that will be following it in the headlines over the coming year.
This is a good article on a few dissimilaries between Greece and the United States.
Why do you care?
When you’re at a summer BBQ, some know-it-all guy is going to start getting all apocalyptic on the US. You need the ammo to refute that.
