Category Archives: Commodities Markets

Retirement Security

What strategies can you use, beyond patience, to better ensure your retirement security after a brutal January?

One way of thinking we have not covered much here is using dividend paying stocks to generate income and provide retirement security. Retirement Strategy: Hopefully, This Will be Easy Enough for Even a Novice Investor to Understand Scrap the 4% Retirement Rule, Buy Dividend Stocks with a 4% Yield Instead
On that note, here is a long, but useful article about the “4% rule.” It’s a good read if someone is selling you on the concept. Why 4% Could Fail
If you want to step out there on your own (which I don’t advise), this is an interesting template of an idea. Earn 6.7% on cash with a decent chance to buy ExxonMobil under $60
Here is some more clarity on tax and Social Security law changes for 2016, too. Tax Law Changes Affecting Your Clients 2 Social Security changes and their effect on retirement income The impressive income tax benefits of $5M+ lifetime gift exemptions

So, what are the tea leaves saying? Let’s take a quick cruise around the web on that topic.
We have looked at this before, and it has not gotten any better. Baltic Dry Index falls to lowest level in history Thoughts on Maritime Trade and the Global Economy What if the Imploding Baltic Dry Index Really Does Reflect Global Trade After All
Then, of course, there is China. China’s banking crisis looms like Banquo’s ghost in Davos and China PMI Misses Some of the biggest hedge fund names in the world are loading up on bets against China’s currency
South Korea’s economy is sputtering, too. South Korea’s Exports Dropped the Most Since the Global Recession
Still one of our biggest trading partners, Japan, joined the negative interest rate club, too. BOJ Shock to Pressure Central Banks
Now here’s one you probably have not heard in a while, Venezuela. Of course, Venezuela, like many others, is an oil driven economy. This is What the Death of a Nation Looks Like: Venezuela Prepares for 720% Hyperinflation
Then, there’s US. The Chart That Explains Everything

World economic overview

You know that retirement is coming. It isn’t as though it just shows up one day and takes you by surprise, so you need to get ready for it.” Batya Shevich, Warren Buffett: To Be Rich And Successful Is Easy!

With the Federal Open Market Committee raising the Federal Funds Rate for the first time in nearly a decade, it seems like a good time to take a clear headed economic overview.
Now, the Fed move is largely predicated on a robust employment market and related risk of inflationary pressure. Put that in the context of oil & gas and commodities falling through the floor, and you tend to think like Canada. So, what are equity markets telling us? Here are two opposing views: Why Stocks Need to be a Big Part of Your Portfolio in 2016 tells a tale of a failing bond market and focus on consistent dividend paying stocks, but then “Coppock Guide” Signals a Bear Market is at Hand tells a fascinatingly wonkish look at market tops over a very long time. Both articles are worth your time.
This came in advance of the rate hike, but the read is still worthwhile, bottom line: even a small rate hike, if Japan’s experience is any guide, will be difficult to hold. The Simple Explanation Why There is No Such Thing as a “Dovish Rate Hike”
This rate hike occurs in the face of a largely negative rate environment in the EU, and our friends to the North looking in that direction as well. That, I suppose, would presage good investment news for the US economy, but it does feel odd as the high rate outlier. The Next Domino: Canada and The Bank of Canada just said the 3 most controversial words in central banking: ‘negative interest rates’
I would be remiss if I did not tee up the downside potential, and this is a decent list of hot spots around the globe. A Pessimist’s Guide to 2016: When Everything That Can Go Wrong, Does Go Wrong

No matter what happens to global markets, you still want to retire, right?:
Knowing plenty of people who fall prey to the morning coffee routine, or picking up a quick lunch, I thought this was a great read. Cutting Back on Lunch and Coffee Could Save You $700,000 In other words, that Starbucks Grande is costing you a lot of retirement flexibility.
In the same vein, nine more ways you can save more. I’ll paraphrase here a Warren Buffett quote, don’t save what you don’t spend, spend what you don’t save. 9 Ways to Stop Wasting Money Now
Since I’m on a roll here, let’s not forget the impact fees have on your retirement accounts. This is a great story about how Vanguard single handedly is changing the landscape. The Company That’s a Bigger Threat to Wall Street than Occupy
While this does not play directly into your retirement, knowing this may have some meaningful implications for how you think about investing and it is a fascinating component of any global economic overview. These 2 charts basically tell the entire global demographic story
A friendly reminder about healthcare cost in retirement, it really is a big issue, and you really do have to be prepared for it. Health Care in Retirement Will Cost How Much?

Miscellany to lighten your mental load:
Everyone with an iPhone will like this trick. Make Your iPhone Faster With This One Simple Trick
Here is the convergence of two recurring topics here: travel and saving money. The 11 most underrated ski resorts in America
This is a little heavier, sorry, but it is really interesting, too. History in the remaking

Retirement thanksgiving

Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.” – Jonathan Clements

Since we are giving thanks, let’s have a retirement thanksgiving:
It is always interesting to see what the so-called experts are doing, and I find the trends here most insightful: construction/heavy industrials and retail. Goldman: Hedge funds are betting billions that these 19 stocks are going down
It is always good to stay on top of the changing legal landscape, don’t make a costly mistake. How Retirement Benefits Will Change in 2016
It is also good to know your options, the HSA has been a hidden gem since inception. Learn more here. HSAs Can Be Like DC Plans for Retirement Health Costs
One gentle reminder about fees, this time from a different angle, the impact of a fee focused company, Vanguard, on the industry. The Vanguard Effect

A weekly look at global markets:
In the continuing trend of global economic sluggishness/slowdown, I give you the world commodities markets in a single graph. Collapse of Commodities in One Simple Chart
In the same vein, and another continuing theme, a further dismal report on the Chinese economy. Everyone on Wall Street is talking about this dark new China report

Travel, because it is that time of year:
Talk about making holiday travel bearable, here’s the ticket. The 10 Best First Class Airline Cabins for Holiday Travel
Since you probably won’t be in one of those cabins, I give you this diversion for your travels. 6 Craft Beer Stores Hiding in Airports
Crowd funding unleashes some great ideas, cutting out the middlemen. Jurni is a great travel idea, worth keeping your eye on now. This May Be The Best Carry-On Suitcase Idea We’ve EVER Seen
This one is for your consideration. Indeed, everyone should have a personal favorite museum. Just so happens I agree with this article. How about you? Is This the Greatest National Museum in the World?

Economy Update

Action is the foundational key to all success.” — Anthony Robbins, writer and motivational speaker

Economy and the Market – never a dull moment, and hard to predict:
Over half of European countries now trade sovereign debt with negative yields! BofA Looks at Europe’s Record € 2.6 Trillion in Negative-Yielding Debt, Is Shocked at What it Finds
Along with the craziness of negative rates comes the fall of the Euro. The Fall of the Mighty Euro
More on China, with global commodities and basic industries slumping, this is no surprise, but it does not bode well. China steel industry is flashing warning signs that the world cannot ignore
Then, there is the Fed, and Ben Bernake recently saying that negative interest would not be a bad idea. Dollar Moves Shake the World: “Federal Reserve Could Start a Currency War”
With all that news and the weak 1.5% US growth last quarter, is it any surprise that US rates remain a hot topic? Read this, though, for a surprise in its own right. Wall Street guru who has been nailing the interest rate story just made a jarring prediction for 2016

It’s your retirement, keep an eye on it:
It is good news that they reached a budget deal this week, but there is a hidden, unpleasant surprise for Social Security participants. Advisers rethink retirement plans amid Social Security changes Game almost over for Social Security claiming strategies
If you already do claim Social Security, this may be of interest, too. Be cautious of changes in strategy to offset the Medicare hikes in 2016. Don’t abandon Social Security strategy to avoid Medicare hike
This is always worth a reminder, keep an eye on fees, all fees. Reducing High 401(k) Fees Want a Financial Adviser? Here are Some Things to Look For

Travel – some escapism for your weekend:
This guy figured out how to maximize his miles, and you get the inside look. This guy used a frequent flier loophole to get a $60,000 trip in a first-class suite on Emirates – here’s what it was like
If you don’t mind Detroit or Chicago, this is a good list for you. 10 Stunningly Beautiful Abandoned Buildings in America
A little more down to Earth, I have to share this one. Most Hotel Safes Have a Hidden Lock That’s Easy to Break Into

Do you understand the economy?

Great minds discuss ideas; average minds discuss events; small minds discuss people.” – Eleanor Roosevelt

Markets and the Economy –confusion reigns, with conflicting data points everywhere:
The US employment picture continues to baffle those who care to look beyond the stated unemployment figures. This is Why Participation in the US Workforce Has Plunged to Its Lowest Since 1977
In case you thought you were getting a clear picture of markets and the economy, these articles shed some light on government intervention (directly or indirectly) into markets beyond the numbers games and Fed intervention. Are Big Banks Using Derivatives to Suppress Bullion Prices? Citigroup Just Cornered the “Precious Metals” Derivatives Market Red China Goes Redder, Stocks Tumble Despite Government Ban on Bearish Talk

Your retirement – one quick one on fees:
Just about every week I harp on fees. In fact, I’ve touched on FeeX before. While it has limitations, it should help you understand your current fee structure. That is a win in itself. Can Technology Solve the Mystery of 401(k) Fees?

Special one-time notice:
If you’re an Amazon Prime subscriber, be ready for July 15 “Prime Day.” Amazon to celebrate 20th birthday with Prime Day sale

Boring, but worth noticing:
Do you suppose this was intentional, or simply an unintended consequence? Regardless, is it a good thing? Amid New Overtime Rules, More Employers Might Set Email Curfews
Of course we all saw this coming, but still it’s particularly offensive from that role. Eric Holder Back on Wall Street After Years Refusing to Jail Bankers
Thrifty, but smart, ways to save on long hauls. Best Airlines to Fly International Economy

Science at work:
These are fascinating … now to apply them. 4 unbelievable chemical substances humans have discovered
If you are particularly lazy, and in a rush, this is for you: Cloud of Breathable Cocktail Can Make You Drunk just by Breathing

Beware the market correction

“Once we believe in ourselves, we can risk curiosity, wonder, spontaneous delight or any experience that reveals the human spirit.” – e.e. cummings, poet and playwright

Markets and the Economy – it really is worth paying attention:
A really fascinating look at the convergence of events…that you probably don’t want to know! Is a market correction far behind? Stocks crashed the last two times this happened
To a certain degree a major market correction is always inevitable (even if a major bubble has to come first), it’s all about your timing in proclaiming it. However, hard to argue that we’ve had an exceptional run on Wall Street. So, maybe… A Major Downturn is Inevitable: Here are Some Ways to Bet on the Coming Decline
Just in case you thought that was the only negative prognostication about the markets, this one chart is pretty disturbing. Here’s some great news for those who want the stock market to crash
Finally, if you don’t believe those guys, here’s a brand name commentator, Byron Wien from Blackstone, with a different twist and the same result. Byron Wien: The Fed basically put $3 trillion into the stock market

Retirement security – stay diligent…:
It’s hard to resist this title, but read thoroughly because he starts by saying ‘don’t buy an annuity,’ only to advocate for an immediate annuity or guaranteed lifetime income benefit … inside your company retirement plan. 20% More Retirement Income – Another Good Reason Not to Rollover Your 401(k)
Since you are now not going to rollover your 401(k), you will be well served to read this quick primer on how to manage your account. 6 Strategies for 401(k) Success
We cover the passive vs. active debate regularly here, this is another interesting view, probably more accurate than most. I will caution you, though, that while it looks at pure performance, it excludes the fee structure … of course we all know active funds typically cost more and those costs add up over time. Who Wins the ‘Passive vs. Active’ Institutional Debate? Pt. 1: U.S. Large Cap Blend and Who Wins the ‘Passive vs. Active’ Institutional Debate? Pt. 2: U.S. Large Cap Growth
Perhaps not entirely a retirement thing, buyer beware on hospitals, particularly out of network hospitals. These 10 hospitals could pick your pocket clean

Miscellany – a little offset for the doomsday predictions:
This sure seems like a win for safety, especially the bike shot. Volvo Lifepaint
Now keep in mind, they say they are ironic, perhaps not all funny. Number 10, though, funny. 15 Moments in the History of Mankind That are so Ironic, They’re Funny
This proves the old adage ‘it’s good to be king’ or emir, as the case may be. The Middle East’s largest yacht that comes with a super price – in pictures

Improve your retirement prospects

“It does not matter how slowly you go as long as you do not stop.”— Confucius

Retirement tips – small things you can do today to make your life better later:
How you choose to invest your money is important, too, right behind saving it in the first place. This interesting piece explains in simple terms the notion of Smart Beta, stripping away the market cap weighting of simple indices. Since I may have convinced you to seek out lower fees, perhaps even ETFs, this is time well spent. A Review of the Different Approaches to Smart Beta
I shared some insight on this in my last update, and since then there has been a “flash crash.” Did you even realize? No? Then take the time to read this. When the World’s Reserve Currency Flash Crashed: “I haven’t seen anything like it since the financial crisis”

Leadership tips – behavioral changes that will make you a better leader today:
There is little more valuable than a direct line to reality from your entire team. I suppose an ex-CIA operative is as good as anyone to suggest ways to create that needed link. How Leaders Can Get People to Tell the Truth
On a related, but somewhat more sinister note, this piece helps you improve your powers of persuasion. If nothing else, it is fascinating to see how companies manipulate you every day. The hidden tricks of powerful persuasion

Travel tips – a few minutes now can save you a lot of hassle on the road:
Well, that all seems kind of doom and gloom filled. This might take your mind off things. I know as good as I am on airplanes, over 12 hours starts getting to me. The World’s 20 Longest Non-stop Flights
Everyone knows how awful airline cabins are from a germ perspective. These guys are trying to do something about it. I’m all for that … especially on my next 17 hour flight! Disinfecting Planes with Robots
I have not tried it yet, but this introduction makes me very interested in GoSeek. How to find “hidden” hotel discounts

Weekly Diversions – fascinating things you may have missed:
This is crazy, the Nazis built these secret lairs as an escape hatch from their misdeeds. Apparently this is not the only one. I read that they purportedly had them in deserts and other inhospitable places. Nazi Lair from World War II Found Hidden in Argentine Jungle
I am a sucker for new technology, and 3D printing has such promise. This, though, seems like a giant leap forward. If all you do is watch the videos, it is definitely worth clicking through. Company Unveils Radical, Layerless 3D Printing Technology “25 to 100 Times Faster” than Standard 3D Printing

Oil Prices and You

Oil prices and you
Some tools you may like to have, and some facts that will amaze

Oil prices continue to slide … is there more to it than shale?
With the shale oil boom in the US, Saudi’s keeping the taps running, and global economy still sluggish, prices continue to plummet. Oil sinks below $59 after IEA cuts demand outlook
This one is intense, but interesting now to see what happens, since prices hit $59 overnight. Deutsche Bank predicting a broad high yield default cycle from plunging oil prices. The astounding thing to me, the assertion that there is a “widely documented “secret” deal by Obama/Kerry with the Saudis to crush Russia with low, low oil prices.” If WTI Drops To $60, It Will “Trigger A Broader HY Market Default Cycle”, Says Deutsche
Oil prices have meaningful impacts on petro-fueled economies. Impact of Oil Price Drop on Producer Nation Deficits
Jennifer Ponce de Leon at Columbia thinks it produces investment opportunities Oil and the High Yield Market

Let’s get back to your retirement planning:
A pretty well reasoned contrarian view on the active vs. passive argument. Active vs. Passive Management: It’s a Good Time to Go Active
First, some follow-up on the Tony Robbins controversy, Tony takes to ThinkAdvisor to defend himself. Tony Robbins slams critics, says he’s not a financial advisor
An age old lesson for my retirement focused readers: beware fees … and in this case taxes. With Market Timing, Even if You Win, You Lose
If you insist on playing the market, though, there’s an even cheaper way to do it now. The Robinhood app for your phone allows you to trade for free, that beats even E-Trade or any of the other low cost options. Robinhood Launches Zero-fee Stock Trading App
Way more intense than usual this week, so let’s lighten things up now:
Save even more money on your holiday shopping. Secret Codes Will Save You Money at Costco
Make it difficult to track your digital footprint. Opt out of global data surveillance programs like PRISM, XKeyscore and Tempora
I am amazed by this one, how about you? By the numbers: Half the senators who voted for PPACA will be gone in 2015
Finally, one very silly thing to lead you into the weekend: 16 Ridiculous but True Facts That Will Make People Think You’re a Liar