| This is the G&G Associates Tax & Financial Consulting e-Newsletter The Financial Media Wants to Brainwash and Bankrupt You Imhotep (Wisdom To You) G&G Readers, The financial news media is conspiring to blow up your brokerage account and flush your retirement savings down Ben Bernanke's new commode. I'm not saying the editors of top financial newspapers and magazines sat down together and hashed out a plan to brainwash you and bankrupt you. I really don't think they did that. It only looks like they did it… The conspirator I'd like to focus on today is Barron's, one of the most well-respected publications in the industry. By the look of it, you'd think it made a bet that it could nail the best "cover story sell signal"… ----------------------------------- Internal Sponsorship With the falling dollar and the explosion in gold, silver, oil and other natural resource prices, you need to stay on top of your game and manage your "OWN Finances." Become a GGIS subscriber now and you'll be sure that we make sure you stay on top of your Tax and Financial Future to make sure your BUSINESS … AT HOME is protected. Remember…most people look after their bosses business, but fail to look after their own business at home. Take advantage of our 2010 discount lifetime subscription offer if you are not yet a member of the GGIS paid newsletter service and you'll be on your way to knowing how to protect your portfolio...at least what's left of it. I'll keep you informed on the "REAL DEAL" in our economy so you can protect your wealth. So....Sign up today before the price increases in 2011. To become a member of the G&G Investment Society newsletter subscription, send an e-mail to GGIS@gngassoc.com and/or visit our website at www.gngassociates.net and click on the "Products & Services" link and we'll get you signed up right away. DON'T WAIT ANOTHER DAY! - 1 year subscription - $49 (2011 Price Increase -- $99) - 2 year subscription - $89 (2011 Price Increase -- $189) - Lifetime subscription - $199 (2011 Price Increase -- $399) ----------------------------------- The cover story sell signal is one of the best contrarian indicators around. Whenever a trend is deeply ingrained enough in the public mind to sell magazines off the newsstand, you know it's about to end. It's most recent issue of Barron's, you'll find the most irresponsibly ostrich-like, head-in-sand attitude on the cover of the November 29 issue. It shows a retiree lounging with a cocktail next to a waterfall of money. The headline promises, "How to keep the income flowing." The article inside is called "Going with the flow." That doesn't sound very contrarian to me… It's essentially an invitation to throw caution to the wind and take on more overpriced risk. And the Barron's story is recommending a whole slew of risky investments… Among the high-risk offerings touted by Barron's: emerging market debt, foreign government bonds, high-yield corporate bonds, Build America Bonds (subsidies for municipal bond issuers), senior bank loans, MLPs, dividend-paying stocks (well, that one's a pretty good idea, actually), variable annuities, and the one that's been going straight to hell faster than the rest of them lately, municipal bonds. It's as though someone at Barron's sat down and decided to make a list of the riskiest stuff you could buy right now. Income – especially fixed income – is clearly a bubble. That Barron's is trying to sell this list of fixed-income and near-fixed-income investments as a retirement-worthy portfolio seems more irresponsible than usual. It even tells retirees to take more risk, saying, "Generating a rich stream of post-retirement income these days requires investments that retirees once might have shunned." Adding particular insult to injury, a smaller headline on the left-hand margin of Barron's latest cover says, "REITs have the right stuff." I guess as long as you ignore the loud crashing sound coming from the commercial mortgage-backed securities (CMBS) market, the equity in commercial real estate looks positively peachy. In particular, the delinquency rates on mortgage-backed securities secured by apartment buildings spiked more than 100 basis points in November, to 15.8%. That's from the same report by CMBS tracker Trepp that says the overall CMBS delinquency rate rose to 8.93%, up 35 basis points from October. The loans underlying U.S. commercial real estate are blowing up at higher rates. But Barron's thinks the equity slice, the riskiest piece of the pie, is somehow appropriate for retirees. If the bond holders aren't getting paid, the equity holders can throw their tickets in the trash, have a smoke and a shot tequila, and resign themselves to getting crushed. And like every other kind of yield, REIT yields have compressed. The U.S. Real Estate Index dividend yield has fallen from 11.19% in February 2009 to less than 4.6% today. For taking on all kinds of risk, you're paid just a little more than 30-year Treasurys. That's a bad deal. And you should turn up your nose. Barron's and the rest of the financial news industry is a shameless hype machine, by all appearances in the direct employ of Wall Street, the Fed, and anybody who's already got a ton of money. It's forgotten how to say, "Inflation is bad for business, and what's bad for business is bad for stocks. Sell fairly valued stocks. Hold cash. Buy only when valuations are dirt cheap and business quality is stellar." See, that wasn't hard. Sure, subscriptions to my GGIS newsletter won't have people pulling out their credit card with that kind of advice. But at least we'll all sleep soundly, knowing we understand exactly what the heck is going on. If you need a one-on-one consultation, feel free to contact me to setup an appointment. Until the next time, Ankh Uja Snb (Life, Health, Strength), Asar Gary Gray Tax & Financial Consultant, RFC G&G Associates 757-251-0174 office 866-361-3872 toll free fax www.gngassociates.net G&G Associates & G&G Travel are on Facebook, join our fan page. "Any fool can make something complex, but it takes a genius to make something simple" Woodie Guthries P.S. If you're not a GGIS Paid Subscriber reader yet, it's not a bad way to start the year. The recent dollar rally has actually given everyone some new opportunities to invest on the cheap. And currently, our GGIS portfolio is packed with great plays to kick-start your "anti-dollar" portfolio for 2010. P.S #2 If you are looking to Travel and looking for steep discounted travel, visit www.gngassociates.net, click on the "G&G Travel" link and let your travel planning begin. Let us know where you want to go and we'll do our best to find you the best deal your money can buy. Become a Fan of G&G Travel on facebook. LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. |
No comments:
Post a Comment