Japan’s Long-Time Economic Lagging

            

The Japanese Nikkei Stock Average is still sharply off its 1989 peak. The Japanese economy has been flat and practically dormant for over the past twenty-odd years. This has been the case despite huge Japanese government spending.

                     

The problem for the Ue.S. is that the administration has been on a wild run to “stimulate” the American economy, much the same way the Japanese first attempted over two decades ago, to spend a way to prosperity.

                     

Fortunately for them, the Japanese do not have a global reserve currency to protect, as the U.S. does,(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Bond Moves During Inflation

                   

I would advise everyone to be fully aware of the duration principle and how it works when investing in bonds.  Very few media pundits write on the practical use of bond duration and its adaptation to inflation, rather than avoidance of inflation effects.

                     

Much media portfolio advice, particularly as it applies to bonds, is used merely to fill up space and not to truly enlighten. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

QualIty of Media Securities Advice

     

Giving advice on investment portfolios without regard to a client’s age, family condition, and needs, is ridiculous. Everyone has a different investing time horizon and current and future income needs.

                     

Those factors affect the choice of securities.  And where bonds are chosen, the “duration” of the bonds and the practicality of low-cost fund automatic reinvestment of their earnings, are paramount. Media suggestions hardly ever consider such factors..(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Cutting Credit Card Debt

               

When you hear a credit card balance reduction ad, two facts will probably never be mentioned, and will mislead you about that credit reduction action.

                                               

One; you pay income tax on any amount of debt you reduce. Therefore, cutting that balance is not what it may appear. Reduce your balance by $4,000 and it’s as if you had a taxable gain.

Two; you hurt your credit standing by resorting to credit reduction. This may eventually cost you.

                     

Furthermore, how many who have so much credit card debt, are actually permanently getting out of debt? You can be sure their spending habits will be getting them into the same situation again in a few years.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

12b-1 Mutual Fund Fees

                 

The 12b-1 fees were originally permitted by the SEC to allow mutual funds to market their product to new investors. They’re actually a sales load that adds up over the years. Fortunately, most funds no longer use them.

                     

The 12b-1 charges originally were used to pay fees for the distribution of funds by brokers. But fees still persist, even when brokers are not involved.

                     

Avoid any mutual funds that charge them. Those fees become significant deductions from your accumulated holding values over the years. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Credit Card Balance Transfer Results

               

When you make too many credit card transfers it appears you may be applying for fresh credit each time. That hurts your credit card score.

Therefore, when you get offers from credit card companies to transfer your current outstanding balance to another card account, think it over carefully. You may be hurting your credit score, should you take the bait. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Reducing Mutual Fund Costs with High Frequency Trading

             

Among costs, added to the "expense ratios" of mutual fund investors, is the bid-ask spread. A wide spread means the fund must pay significantly more to acquire a stock than it could sell it for.

                     

High- frequency trading has reduced this cost by narrowing the spreads. Wide spreads are seen as inefficiency, with buyers and sellers having difficulty agreeing on a price that accurately reflects what is known about a stock. Narrow spreads mean the market is working better.

                     

Another transaction cost arises from a fund's huge trades; they can drive prices up or down by tipping the balance of supply and demand. High-frequency trading has helped reduce this "market-impact" cost by making it easier to break big trades into many little ones, while  conducting them very quickly,

                     

Trading costs from spreads and market impact have been cut in half over the past decade, From 0.5% of the trade amount for big company stocks to 0.25%. For small stocks, trading costs have dropped from 1% to 0.5%.

                     

Therefore, high-frequency trading isn’t always the villain the financial media purports it to be.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Investing Basics

I repeat the basics of smarter investing, methods that increase odds for success, and eliminate your

need for expensive advisers. Simplify the complexities of the securities markets.

Your strategic plan and its discipline are the answer.

You’ll have to change old habits. Instead::

1) Avoid listening to financial advisory ads that offer only partial information, while selling their particular pitch.

2) Avoid putting up with market noise; plus in-and-out trading ideas galore.

                     

3) Avoid trying to outsmart others, if you  decide to trade securities. Remember that “dud” security you are selling is a “diamond in the rough” by the buyer.

4) Avoid any investment suggestions that do not take your age and family conditions as a primary consideration. 

  

5) Avoid expensive advisers, other than necessary accountants and lawyers.       

                     

It’s really simple.(See the Earl J Weinreb NewsHole® comments and @BusinessNewshole at twitter.)

Securities Investing Can Provide Currency Transactions

                          

Investing overseas is not only for investment diversification, the benefits of currency opportunities are to be gained globally.

                     

Will the dollar be getting stronger or weaker? If the dollar gets weaker, overseas investments become more valuable as translated currency will then work in favor of the U.S. investor.

                     

However, should the dollar get stronger, the reverse will become true. The investments become less valuable, when translated into dollars.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Credit Card Maximums

         

It may be necessary to take down the maximum amount  your credit card permits, but it does not help your credit score. Do so only in an emergency. It’s nice to know that your credit permits you spending liberties, but don’t let that take you on extreme binges.

                     

Of course, if you don’t use your card at all, or only occasionally, you may be dropped, or the maximum available credit line may be reduced. So, use credit cards intelligently.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

A Worthless S E C Rule

            

The Securities and Exchange Commission rules that if your company’s common stock is worth more than $75 million dollars, shareholders are allowed to vote once every three years on whether they like or dislike top management pay scales. But the company does not have to act on the voting results.

                         

With all the problems the SEC has to face today, this is what they deem a big, worthwhile endeavor, worth their regulatory efforts. But how many stockholders care? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Renting or Buying a House?

                                     

Considering whether to buy or rent a house?

                     

Comparing costs, including that of a mortgage are obvious. What most folks overlook is the actual savings on mortgage and allied deductions.

                     

They forget the amount of the standard deductions they thereby must rescind when they itemize deductions such as mortgages.

The best way to figure the economic advantages of home ownership is to figure taxes both ways-- if you own the home or merely rent.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Select Managed Mutual Funds or Fund Indexes?

       

Experience and research show that the  “best” managed mutual funds in any year are achieved mostly by chance.

                 

In any category of mutual funds, only a small percentage of active managers beat the performance of indexes or un-managed funds.

Furthermore, those who have distinguished performance in any one year, generally cannot repeat their performance the next, or on any consistent basis.

                 

Few managers can outperform indexes over a few years time, and if they do, it is pure luck, not ability.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Strategy to Sell Your Securities?

           

My research and investigations have taught me a basic lesson that most investors overlook. This applies to Wall Street pros, as it does to rank amateurs, and whether the strategy is related to corporate activity or market strength/weakness.

                 

The rule: Sell if the specific reason you bought a security no longer applies. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Economic Facts Vs the Usual Stimulus

                

Interest rates normally adjust to supply and demand forces and thereby adjust economic events. However, whenever the government imposes stimulus proposals to raise credit and lift the economy, the system is disturbed and distorted.

                     

This unbalances the economy and does the exact opposite of what has been intended. It’s a lesson politicians wantonly overlook to suit their election goals.

                     

Ludwig von Miss wrote fully about the phenomenon in the 1920s but the economist in fashion during the 1930s recession was, unfortunately, John Maynard Keynes. He became the political icon of that recovery movement.

          

The Keynes government pump-priming thesis used prolonged stimuli that actually deepened, and helped induce the Great Depression. This was confirmed by the then Treasury Secretary. Henry Morgenthau. Nevertheless, it is the premise of failed current policy. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Deficit’s Misunderstanding by Voters

              

The U.S. announced debt is completely out-of-control Add to that the liability of the federal government for Social Security, Medicare, Medicaid and prescription drugs and you have an estimated deficit ranging between 60 and 100 trillion dollars.

                     

Entitlements now account for almost 60 percent of federal outlays. Every year, non-discretionary spending eats up more of the federal budget.

                                        

Over the past 30 years, U.S. tax revenues have averaged 18 percent of the GDP with spending, about 30 percent of the GDP.

Defense spending, even if eliminated, would not solve the huge deficit problem. And despite what some politicians love to say about the uselessness and waste of U.S. defense expenditures, it returns immeasurable benefits in the form of global economic prosperity, freedom and security.

Budget deficits, however, still don’t scare voters sufficiently. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)