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I have a special favor to ask you. And if you say “yes,” this could be great fun AND help you make money in the weeks ahead.
Last week, I asked you to jump over to my personal blog to answer two, simple questions …
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Question #2: How do you know how much of your money to invest in each area?
Ever since, we’ve been getting great investment insights as our readers weigh in on these two all-important questions. Plus, I’ve also jumped in personally to add my responses and thoughts on the blog.
But the answer our readers have posted most often will probably surprise you:
The largest number of our readers decide which asset classes they want to own — and how much money to invest in each — mostly by sheer instinct!
Dr. S.W.B. says, “My investment decisions and percentage allocations come from a combined alignment of my head and gut, with a strong emphasis on self preservation through diversification.
“Only when I feel a convincing internal ‘Go Ahead’ do I move into an investment position and move out quickly when new conditions or information places that investment in doubt.”
Bob M. says, “I’m not sure how I know how much to place in each area other than a ‘feel’ for which areas provide me with the most defensive position while trying to gain some income and spread risk.”
David M. comments, “I don’t allocate percentages, although I ‘feel’ percentages by what is going on.”
John P. adds: “I really don’t have a methodology when it comes to asset allocation. Unfortunately, I think I follow the crowd too much.”
Rehler says: “I follow gut feelings for my investment decisions.”
Bob L. puts it this way: “Reading through some of the comments I realize I have not done a very good job of analyzing the allocation of my investments and will immediately undertake the task.”
Hartmut R. concludes, “I really have no system. I am anxious to hear of a way to invest systematically and rationally.”
So why are so many otherwise sophisticated investors merely feeling their way through the portfolio-building minefield?
My guess is that it’s because no one has provided a reliable way to know which investments are best suited to the current environment — let alone how much of their money they should invest in each!
That’s more than surprising. It’s a bit frightening when you think about it: If you’re among them, you could wind up owning too few of the assets most likely to rocket higher and too many of those likely to decline in value …
Or worse: You could find yourself owning all of the wrong assets for the current environment and none of the right ones!
So now, here’s what I need your help with: Your answer to today’s question of the day. Just click here and use the comments area to give me your answer to this:
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
In the next few days, I’ll be reading my blog and commenting on your blog posts. Then, next week, I’ll send out a follow-up email with my own thoughts on how to build the optimal portfolio for the year ahead.
Good luck and God bless!
Martin
P.S. Due to overwhelming response here on my blog, I cannot personally respond to each and every one of your comments. However, I’ve recruited two of our best analysts, Amber Dakar and Mandeep Singh Rai, to help me reply to your postings.
{ 1179 comments… read them below or add one }
I put about 25% of my money in bonds 40% in stocks and 10% in gold and 25% in cash.
Larry T
Hi Martin, Personally I think the recent activity in the stock market is all hype. Most of the gains of recent months come from future activities, not market buying and selling. Probably FED buying to protect the market from crashing which would bring about wholesale fear in the US. Me personally, I’m learning the Forex market and even there they (government) is trying to cut the margin from 100 to 1 to 10 to 1 to “protect the public”.
I am so glad that “Big Brother” is protecting me!
Mandeep Singh Rai Reply:
January 25th, 2010 at 4:07 PM
Thanks for your input John, we do have a currency experts that can further your knowledge on currencies. Bryan Rich is extremely knowledgeable and offer fantastic insight – here is
Bryan Rich’s Blog.
Considering the track record of fund managers, I think there is a lot of shooting from the hip and monkeys throwing darts. I do think there is a certain amount of both technical and fundamental information application by them but not as much as one would hope or expect considering the pay they receive.
I think all Money Managers follow the money trail or trails for the good of all concerned by the most part.
Howard Hart
Martin, I tend to stay in the energy services area due to that work as a commercial diver. I also have been following the shale plays in the U.S. and I have made over 30% returns in the past two years. Best Regards, Jesse
Mandeep Singh Rai Reply:
January 27th, 2010 at 9:52 AM
Thanks for your comment Jesse, and congratulations on your above normal returns.
Do you have other asset allocations other than energy to diversify your portfolio in case natural resources decline? Something to consider in holding a well-allocated portfolio.
I would think that the money managers would select the sectors that are most likely to do best in the near future environment and select the ones that offer the best buying opportunity, perhaps using established charting procedures.
JC
Martin et al.
While the fund managers and brokers (in theory) have research analysts to pull apart a company’s reported information, and gain insight to given industry groups, when it comes down to it – they too are acting on ‘gut’ to make their calls. There is too much incentive on wall street to follow the ‘consensus estimates’ and stake your claim slightly to the above or below the consensus. Worse yet, the firms that rely heavily on programmed trading, technologically institutionalize the expected behaviors of the herd in response to news or market moves – which is way more dangerous than if they were all making gut calls.
The only true standouts in the industry are the ones who DO THEIR HOMEWORK, work harder than the rest on gathering information, challenging their own assumptions, and evaluating the sensitivity of their decisions to those assumptions. It is that hard work that generates the confidence to make a stand against the consensus, bet that way, and make real returns over the long run. I pay Weiss Research for that hard work, and on days like today (1/20/10) when the market is moving against many of those recommendations, I place my bets based on that intellectual discipline, and I make money.
Martin Weiss Reply:
January 22nd, 2010 at 12:04 PM
Lincoln, very well said! The herd psychology on Wall Street has been well documented, and, most never seem to learn the lessons of history. Even after two great bear markets in the past ten years stocks, stock analysts rarely issue “sell” ratings. The “S-word” — not the F-word — is what’s truly taboo among brokers. And ironically, most of Wall Street is a victim of its own propaganda: The pros themselves get caught in market declines just like everyone else.
Research, analysis and recommendations are almost universally skewed to the bullish side — a bias that works in long-term bull markets like the 1990s but can be fatal in seesaw markets like the 2000s. — Martin
hi martin,
i am not your usual investor.made my money young, retired in my mid thirties. currently have brasileira like you, living in rio, and spending less time in boca raton. a fan of your father, he was terrific. made my my in early stage venture capital in the early eighties. always a goldbug, and contrarian. agree with evrything your people write, but like richard russell says, “don’t tell me what to buy, tell me when to buy”. been readinf your firm’s writings for the past two months. it’s been a tough environment, and on opposite side of your trades, for now. remember, when everything is as good as it gets in brazil, as your letters state, things can’t get better, time to sell.
abracos,
charles
Mandeep Singh Rai Reply:
January 27th, 2010 at 10:01 AM
Charles, thanks for your input – and you are right.
Warren Buffet put it adequately in 2001 when he said:
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Indicative of the contrarian mentality.
I am all short the market at the moment, expecting a market correction, with a dollar bounce. (I have lost serious money last year, being so positioned, but I’m holding my position) When I think I see a bottom approaching for the market, (and thus a top for the dollar) I will move from short the market to long the metals. I tried that in 08, but left the metals way to soon, expecting a second fall of the market.
Hi.
I’m european, so my savings are in Euro.
This is a true headache at the moment
- Stocks are very likely to fall again hard in 2010
- Petrol and natural ressources will follow as crisis will *really* hit, when..
- The big obligations krach will happen, starting in Japan and UK, hitting US like a tsunami, and will have devastating effects worldwide
- No need to mention house prices still very overvalued, and not a safe haven at all at the moment
- And even if I accept the mere 1,5% of interest on CDs, because we will soon witness a race for competitive devaluation everywhere, even my Euros are likely to suffer a significant decrease in value (for dollars, you will be able to use it for toilet paper, they will soon not even be able to buy their weight of the actual stuff). This is how I’m fully invested at the moment…
Only hope is that prices of houses that has started to get lower will drop significantly before the crisis will really hit, and that I can do a not-to-bad purchase just before…
FYI
I have transfered my Money Market IRA into a self directed precious metal IRA. 66 % is in gold bullion (1oz denominations), the other 33% I will be putting into ETFs, China, Brazil, and India specifically. The Western banking model is imploding. The US dollar is not worth the paper it is printed on. My two cents
jd
Good morning Martin, here is my thinking on your questions:
1. Most pro’s I talk to use a proven structure, movement alerts, stops, limits and news which adds a stomach feel. In general, much is computer generated/layered with gut feel.
2. every system has bias, opinion, and technique. fear and greed override intellect. trading is more and more short term and markets move on these. pro’s make money on these turbulent moves, sometimes.
Mutual fund managers rely on research teams; Brokers don’t have a clue, they sell what management tells them to, and they seldom sell; Professionals rely on research, usually theirs. Only the pros and Fund managers try to structure their investments to hedge loses.
Wall St pro’s often use sophisticated computer programs for buy and sell recommendations, Duplication of these programs can lead to the volatility seen since MLK day and the apparent ‘herd’ behavior during the past year. Successful pro’s use a combination of methods including ‘Gut” and wave/trend analyses.
They look at tech and fundamental analysis…likely!
1)I do not invest more than 10%
2)Follow the market,look listen and learn
I don’t believe in broad asset allocation. I place three or four positions that average six months in duration. The money amounts are equal and outside my fixed income positions.
Waiting for your advise.
Where safety is the goal and modest asset growth are the objectives I think fund managers and investment pros have good models and methods for investing. Where higher returns and risks are concerned, timing is the key. Overall big picture economic trends and bubbles are important to identify the best “fishing holes” for these higher gains, and your team’s ability to identify these keep me focused on the ones likely to yield the best catch. At its essence though it’s all timing, and no one can reliably say when the fish will run. But I do appreciate having you and your team as guides.
They follow BLIND some Mathematical formula that produced results in the past!
Without an Incling of what is happening under their feet today, or having an opinion what is likely to happen in the future!
BECAUSE they are BIG TURDS, using OPM they cause the markets to produce ERRATIC movements in the process.
George
Very Dim View I understand…BUT GROUNDED ON REALITY.
Unfortunatelly it has not helped me.
I think the majority of the managers actually feel they are making sound fundimental financial decisions from the information they gather, however, sometimes as we all have experienced, their decisions turn out not to be so sound nor fundimental.
I sometimes wonder how the mutual fund managers and trust managers choose what to put their money in. I have money invested with a trust and sometimes it seems they are a bit behind the times as I make suggestions to my manager (I read a lot of financial information, etc.) and months later I see some of this in the newsletter they put out. I also invest some of my own money and am doing that in dividend stocks. My 401k portfolio is made up of mutual funds that the company has chosen for us to pick from. I pick these. I have done better with my own personal 401k than the trust company has done with the one I have there. So I am not sure how they pick their funds.
Martin,
I usually do a percentage allocation for bonds, stocks/ETFs, and cash – right now that is around 35%, 35%, 30% – then I use recommendations from some of your publications to allocate funds within the broader categories.
Walter
Please excuse me for not answering your questions as you ask. My Portfolio is as follows: 35% + Gold & Gold Stocks
15% ETF Gold & Gold Stock
50% Cash – $ & CH
With Your Suggestions & a Lot of Study – The above was arrived at. You do excellent work. Your father represented a client of mine a number of years ago & I had the opportunity to speak with him numerous times by phone, while working for my client. Great Man.
Thanks for your Work & God Bless – Jack
I am not making decisions concerning my stocks. I turned my investments over to my trust at a small bank. They got me out of the mutual funds I had acquired. I removed $200,000.00 to buy real estate. I lost about $200,000.00 when the stock market crashed. Now I’m mostly in cash, small portfolio of equities, and bonds (municipals and corporate). Before they buy any thing I am consulted.
Thanks for keeping me up to date in the financial field. I’m 83 years young and want to keep up to date.
I diversify or allocate investments somewhat by “feel” but generally use an acceptable methodology based on my age and target retirement date. I guess I am saying that “I follow the crowd”.
I HAVE NO IDEA HOW THEY PICK THEIR STRATEGY. MAYBE THEY SHOOT DARTS.
I do my investing by reading about sectors of the market that appear to be good to get into….then I rely on you to tell me the individual trades…right now I am very heavy in commodities, silver and mining….I am getting better at following your pro advice and not commiting to speculative plays.
I have sold all stocks, bonds etc.
I have put most of my cash into real estate rental commercial warehouse properties. I see inflation coming soon and I can pay back the loans with discounted dollars and raise rents accordingly. I have owned warehouse rental properties for 27 years and have never lose any monies in my mid west area. I am all cash and warehouses. I am looking for bargins on warehouse properties.
I believe they do ’some’ analysis, but more than likely they are just following the herd and believe the news. I don’t believe there are many, that actually understand the potential economic issues we are facing, and the very potential results. As such I believe that really means that they are guessing (With our money).
I think that mutual fund money managers generally follow a set of investment rules governing the specific fund and that Wall Street brokers and pros generally are trying to sell whatever appears saleable.
The results of the better mutual fund money managers such as those involved with Vanguard Wellington and Wellesly income confirm their use of tested, reliable ways to structure portfolio’s and minimize risk. The results of many mutual fund money managers confirm that they do not beat the index’s they choose to be measured against.
Dear Sir,
Currently I have domestic utility stocks, Bank stock (1) only, Gold (metal) & foreign exchange. deciding the spread is really difficult, however I have decided to increase by 30% my currency holding in the next 2 weeks. I also like Gold but it does seem volatile.
Kind regards,
Dr. Weiss:
While I may not have as much as I would like to have to invest, I have been following your articles’ recommendations, as well as those of your colleagues. Were I to have enough to invest, I just might want to do so in foreign currencies, electronics, precious metals, and, possibly, natural resources (i.e. things like corn, wheat, oil, et cetera). I do have doubts about this country’s financial status, given the current and recent upheavals in banking and real estate, but the items mentioned previously sound promising. I hope that this will be of some use to you.
Thankfully Yours,
John F. Tashjian
In answer to today’s question, I would say most professional advisers structure portfolios according to pretty standardized models ie. those recommended by the firm’s investment advisory committee etc. The problem is most of those models are restricted to US stocks…most of them large cap.
Question 1 – In this down market, I am looking for dividend stocks that will pay out even in a depressed market and then pay off handsomely when the market recovers. I have invested 30% of my money into physical silver. I am also interested in getting a 10% stake in physical gold as well. Oil and energy interest me, but only if they are paying dividends.
Foreign currency – too rich for my blood but I have invested 15% of my fortune with a man who does this for a living.
Question 2 – As I’m young (35) I figure I can afford to wait so I keep about 20-40% in cash at present looking for the right investment. But the name of the game for me is cashflow from now on.
Today’s questions
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions? They have a system with graphs and statistics, but everyone has those these days making it less impressive and as we know from statistics 70% of mutual funds don’t beat the index, so why risk it?! Just buy the index.
Although they all have sophisticated analytics, I think there is also certain amount of professional intuition that factors into their decision-making processes.
Mutual fund managers have sophisticated computer programs that analyze trends, etc.
I rely on the imput of the professionals.
I have heard that some in government want to take over various retirement plans and force some portion to US treasuries, or limit withdrawals to annuity pay outs. Saying that I am not interested in US dollar debt securities. Much in Au, & Ag stocks with some in Aus. & canada currencies, a fair amount in energy trusts. Even so, holding these has recently gone nowhere.
I believe that most fund managers use monitoring software along with instincts and knowledge of buy/sell signals.
Safest investment advice needed. Elderly lady with limited assets.
My fund manager says they don’t predict which stocks/funds will fall or rise; but look long term and keep diversified; which after reading all your information daily has made me question why I pay so much quarterly. After all, my funds fell 42% during this past year. My new fund allocation has only one mining stock — so right now I am wondering with your projections about a second fall, what to do!!!
I invest every spare cent in Gold.
I have bought an ounce.
For my future I bought a derelict yacht.
There is no plan B.
I cannot afford one.
I believe that most of these managers use old, tried and mostly true methodology with little room for innovation and their research is insufficient, unlike Tony’s when he goes directly to the companies – I don’t believe they are shooting blind, but I believe they are mostly office people using methods they have learned or institutional guidelines in addition to a small dose their own instincts
I am scared to death of what is going to happen here in the USA with Obama and his allies creating a much bigger government with so much deficit spending. I am hesitant to place a significant portion of my assets into stocks but am also concerned that the value of the dollar is going to rapidly diminish. At present I have about 25% in securities and the rest in cash waiting for a signal to invest again. I depend a great deal on the information in the Safe Money Report for my investment choices.
Mutual fund managers investment decisions are based on funds inflow and outflow and on the particular fund’s inverstment objectives and parameters. Many funds are limited by their own design, special purpose and sector. Managers also follow various technical charts and statistics, share volumes, etc. and interject their own influence as to what they believe is the momentum direction, economic issues, trends, etc. Some managers are seeking yield and limited downside risk while others are more aggressive and seeking short-term trading opportunities and hedging opportunities.
I have 5 figures of safety net cash just sitting in a savings account earning basically
nothing. Safety means more than interest on the account at this time.
Is there some investment vehicle that is just as safe with the same liquidity as the savings account and will not eat the yield with fees ( front or back end ) that I could earn a better interest rate?
Thank you for considering my inquiry.
Clay
Mandeep Singh Rai Reply:
January 22nd, 2010 at 11:31 AM
Clay, Thank you for your questions.
Yields on “safe” investments are at lows currently on everything from CD’s and money market Accounts to US Treasuries.
These types of investments do offer marginally higher returns compared to a typical savings account without giving up much liquidity, but again, the rates offered are dismal at best.
Be sure to check on the ratings of your institution and read the fine print before getting into anything.
Good Luck
I think that the vast majority of the so called Professionals invest on an Agenda principal, with the customers interest secondary to their own. That explains why everybody’s 401 K’s have gone down the toilet and why ultimately they don’t even keep pace with inflation. That was a wake up call for me personally- to the extent that I have now become responsible for my own investment future- needless to say my future financial well being is already looking rosier- thanks in no part to people like you. Making money is fun as it turns out- though it sure is time consuming !
Keep up the good work.
Leslie Chill
I think most of them try to figure something out, but most are just guessing because they are using our money rather than their own.
I use Larry Edelson’s Real Wealth Newsletter to make my allocations. He’s been spot on with most of his recommendations and insights.
i am a teacher about two or three yrs from retirement so the majority of my investments are made through limited choices available to me. ge
I use supply demand in equities combined with point and figure and ma’s and lunar tables and squaring of price..gann
I am swiss and I live in Switzerland . I will go away from NZ Dol. and AU Dol.( I did 20 % in 2009) and I go in Sfrs with my all capital until I see some better !!!
Hi Martin, I hope that money managers have reliable ways to structure their customers portfolios however my past experiences have not been profitable, that is why I follow your advice 100%.. thank you regards paul
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Mutual fund money managers and Wall Street brokers and pros make these all-important decisions by following diversification formulas and popularized notions. They get paid anyway. The S&P does better than they do.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
They are following old ideas. They worked before but are part of a confidence play. They don’t work well for long when everyone plays it (bubbles). The market is fed by greed and fear and they know that. So how do they alieve your fear but not your greed? They mostly care about their own paycheck. If you want to maximize your profit potential invest for yourself or become a broker and charge fees.
Martin Weiss Reply:
January 22nd, 2010 at 12:06 PM
John, I agree. I don’t blame them for being wrong. No one can be right about the market all the time. The problem, as you have eloquently stated, is that they’re virtually PAID to be wrong. Reason:
• Analysts and fund managers who buck the crowd and miss the market get into big trouble. They may lose their job. They could be labeled “a loose cannon” and virtually barred from the Street. But …
• Analysts and fund managers that follow the crowd and miss the market suffer no such consequences. They keep their job. And if their firm has big profits, they may even earn bigger bonuses.
Thus, Wall Street punishes independence and rewards crowd behavior. In this environment, even if they diligently do their homework, the conclusions and recommendations that flow from that research can rarely be balanced or objective. — Martin
Read as much as you can- it’s possible by not watching TV!
I strongly believe the irresponsible monetary policy of the Fed and the US government has doomed America to a decade of recession and high interest rates. My investment philosophy is simple. Keep 50% of my investments in Gold and other commodities to protect and grow my “dollar worth” during the coming inflation storm and allocate the rest of my portfolio overseas, in the countries with sound monetary policies, government and the natural resources the rest of the world needs.
I read different opinions and try to determine what commodities (this year) are likely to outperform and take a small or aggressive portion based on that decision. I like the candlestick type of charts the best. I may take out one oil company in favor of another because the latter has a better potential for a take – over, for example, oil. I don’t panic on bad days & eventually there is a turn around.
I think the pros are so busy with technical indicators and are not well trained in the greed-panic psychological reactions, thus can make inappropriate decisionss. The day traders greatly add to spikes or steep declines instead of a more orderly rise or fall for a certain company. Increasing tax for trades within (e.g.) a week would help building a more orderly market
they are herd animals following a animal instinct. by ganging up into a herd they seek protection for Themselves NOT You. This “system” generally works, mostly to the brokers advantage. Clever manipulators then toss out carrots to lead the herd into a false direction, dump the bag and cash in on the profits. A stock man or corp will not tell a customer/client not to buy. they are all mini-madolfs. SO I/we must rely on advisers such as your group. To maximize profits I need to hear SELL as much as BUY. All I hear is Buy Buy, cannot just buy, must manipulate buying and selling to generate real profits.
Q: How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
A: They have sophisticated models and systems. I know because I worked on Wall Street for many years and developed some of their models. Not all models are perfect though. They would benefit from more flexibility and built-in ‘gut instinct’…
I have my own 50-30-20 formula for diversification in geographic terms, and a 60-40 formula in terms of conservative/aggressive investments.
Like most informed investors, I pick out the areas that should see increases in the coming months and years. It would appear that energy( nat.gas and oil ) certain health stocks ,food stocks and silver and gold would be wise to follow. We are at an age that we look for income producing stocks over growth and are primarily interested inpreserving capital. We are no longer interested in options or contrarian stocks and currency moves. We apreciate your honest , factual presentations and do not use any broker per se since we have learned through years of experience that they have their own agenda for earning commisions and quite often are not as well informed than I am. Sicerely, Reed Shultis
i forgot to add 403b…..ge
I have made investments and set up the portfolio years ago. Followed Martin’s advise along with Jim Sinclair.
Protected against all the problems of the present. Wish everyone else the same.
Mutual Fund managers are just out for themselves. Wonder if they really know what they are saying, or just listening to the brokerage houses on what to push?
This is all a manipulated game for the “AristoCrat”, the average investor is at their mercy…
It rather simple for me to decide how to invest. I am a retired school teacher that had 9 children of my own. I had a low income and SS gives me 120.00 a month to live on. I do have a teacher retirement which may disapear at any time. I paid off my home now have to make sure I have enough money to pay my taxes each year. I have enough food for 8-12 months. Utilities are a concern. I lossed money in the bubble in the stock market. What remaining saving which were very little I put in gold and silver.
I enjoy you advise and wish I had all this infor a few years ago.
But now I guess you would call me a lost leader. Love to invest but no tengo dinero.
I appreciate your e-mails.
I try and use the 1/3,1/3,1/3 rule for my portfolio:
a. short term b. long term c. cash.
I am currently investing in Gold stocks, where they have a track record
of opportunity.
With all five of the Weiss team recommending a half dozen different buys, if I were to buy each I would be a mutual fund. Not saying that’s a bad thing.
I don’t pretend to have an objective viewpoint – I am much too emotional over money.
When I started investing on my own, I reviewed several publications, sites, and magazines, and I spoke to a few money managers ( most of them are nothing but salespeople.) I then determined which had given the most accurate advice over a long time, by reviewing Hulbert and other objective publications. Weiss looked the best. I have not regretted my decision to let you do the analysis for me. I am a willing sheep, but I have not yet been slaughtered. I’ll stay with you guys as long as you stay correct.
Volume holds one of the keys for me. Lately, the market has not had the volume of years past. I still think we are riding to the top of the 2nd half of a “W” and have held back until that second shoe drops. I agree with former respondent, most of the pros have gone into short trading and stops to limit losses and maximize gains. I don’t have the time to watch the market every day to catch those sell moments and our market has been quirky to say the least. I have some metals in hand, some fixed income and some funds with international bases, a couple of global ETFs, but still have more cash waiting for that second fall. To allocate by percentages requires a more stable market.
While I don’t “know”, I suspect that fund managers have a wide range of analytical tools at their disposal and they each have an significant dependence on the select tools that have served them well in the past. This environment makes this methodology somewhat questionable. Additionally, as with most of the comments so far, I think the professions are hearing what others are saying and then using their “gut” to sway their decisions in what they believe is the best direction.
Bottom line: technology adjusted by “gut”.
Martin Weiss Reply:
January 22nd, 2010 at 12:09 PM
Gut feelings represent the sum total of an individual’s experience and knowledge. Gut feelings include all the essential information inputs that cannot be reduced to a number or a formula. They ARE critical to investment success.
But here’s the great dilemma, Ron: It’s those gut feelings that are the most vulnerable to influence and bias, especially the carrot-for-following-the-crowd and the stick-for-mavericks that I describe in my blog response to John above.
This is why the Wall Street “quants” — those that rely exclusively on quantitative technology and strip out gut feelings from their work — have consistently performed less badly than traditional Wall Street analysts.
But “less bad” is not exactly an adequate goal, is it? For optimal performance, what’s really needed is what I call the three “I’s” — intelligence, intuition and INDEPENDENCE — to use the best tools in an environment that’s as free of bias as one can possibly achieve. — Martin
This day and age leads me to believe many of the ways we previously selected our investments are outdated, and leave us open to bigger problems. Your suggestions, and directions have been a great help.
It is apparent that many have blinders on and some blinders are clear with a rose tint. I luv the verbage..better than expected. I think ms whitney and mayo are examples of how wall street want tp perpetuate their game.
The game is to manipulate so as to give the advantage to whomever is in charge.. Facts are many times disregarded. The chinese wall I believe has holes and thus a mkt that isn’t a true mkt. The mkt,the govt…are manipulated. As an investor or trader, one has to figure out what the real picture is..then act either long or short.imho, the media is clueless also.
HI MARTIN. I LIKE WHAT YOU DO HERE, BUT IT’S STILL ALITTLE CONFUSING FOR ME TO UNDERSTAND. ALSO, I DON’T HAVE THE FINANCES TO GET STARTED YET. HOWEVER, I AM EXPECTING A LARGE SUM OF MONEYS WITHIN THE NEXT FEW WEEKS OR SO AND I WILL NEED SOME DIRECTION AS TO WHERE TO PUT MY MONEY SO THAT IT DOESN’T GO TO WASTE. I WOULD LIKE TO INVEST SOME OF IT INTO GOLD, REAL ESTATE , AND STOCKS. CAN YOU HELP ME TO GET STARTED WHEN THAT TIME COMES? THANK YOU MARTIN. VICTOR.
Mutual Funds have specified investment criteria that are published in their perspectus. They do not, I feel care whether or not we as individuals make money or not. They stay fully invesyed in most cases and do not set obvious stop losses when one of their ideas tank.
Energy (oil) and god forgive for admitting it finance.
Since I work for a European company, I have much insight into currencies, market movement of especially German companies and I use this information for my investments. Also, my business works with large manufacturers and they have to ramp-up for mass production prior to getting their product onto the market. That combination allows me to see major changes in a manufacturers spending habits.
However, it always comes down to the success of a new product and the management style of a company. I generally invest in European companies that are more stingent with their spending and that have a good track record. Currently, I only invest minimal amounts into US companies.
When it comes to investing I do it by diversification but unfortunately I use HSBC as they are only brokers I have here in my country. Our local shares are good but I fear the uncertainty. With regards to the brokers and mutual funds managers I feel they use the same strategy of diversification. They do use the finacial strength of the organisation but I feel this is only for litmus test to ensure strength EPS etc
real estate 80%
silver/gold20%
My decision to invest in domestic & foreign stocks comes from the advice you gave soon after I joined the Weiss Research Adivsory. I do not have a lot of money to invest (approx 50,000) almost all of it is in China Stocks. I have two small American Energy stocks. Personally, I feel precious metals will win out in the long run. I hold GG for many years now. I do not touch this investment. As far as Bonds go – I do not like Bonds. In the economic times we are in I believe foreign stocks (China) and precious metals are the investments to be in. I would like to learn how to invest in foreign currencies – if I had the knowledge and resources to trade curriencies – this would be my 2010 investment. I do not know how much money to invest in each area. I am waiting for you to guide me. Also, I cannot attend the breakfast in person – can I view it online?
Mary Sereno
Amber Dakar Reply:
January 25th, 2010 at 2:14 PM
Hello Mary,
Taped footage from our Money Show Breakfast will be made available to our membership level customers on the membership website: http://www.weissresearchissues.com
Best Wishes,
Amber
Health (addiction treatment services i.e. health tourism)Solar power, agriculture ( food industry, farming), natural and mineral resources, water salination, IT.
We have developed a long trading consideration chart where we take into consideration the 3 month average and the trading volume along with a high and low spread, percentage gain or loss and a 50 day moving average.
I now have call on glw,mot,pfe,cmcsa,amd,and a put on gld,all long term now
my guess is that they make choices based on research. this research is evaluated through the grid of their economic and political paradigm. i recently spoke with a schwab rep who cautioned me against the risky practise of taking your advice as you fall into the “speculators” category. he belonged to the group that believes the “diversify, stay in long term” bunch. much like the advice given by my parents, who were products of the industrial age, it isn’t relevant to the day. to borrow a line from The Wizard of Oz, “We’re not in Kansas anymore.”
So long as the decision makers believe in the kumbaya, feel good, utopia is within our grasp world view, they will make decisions based on false premises……that government will do right if the right people are in charge, what we need is more money, and John Maynard Keynes (?sp) was a genius, we will continue to see the Michigan recession continue to spread to the rest of the country.
bottom liine, their decisions are based on their politcal world view
my 401k is set up with stocks/bonds that are tailored to my hopeful retirement age, moving more into safer waters the closer the date comes. As for other investments, I have a few stocks I tinker with such as a gold stock, an energy stock, and a couple others. I have a money market account and a savings account neither of which earn much interest. I don’t have a lot to invest but would certainly like to be more confident about what I am doing. I’m sure I could be doing many things better
I started investing about two years ago when I purchased some gold bullion. Today, I follow the Safe Money recommendations to the letter. I subscribed to Safe Money last July and have seen modest gains to date. I also invest in selected recommendations from the Asian Stock Alert, Real Wealth, and Dividend Superstars portfolios. In addition, my wife works for a major software vendor within the energy sector. When I hear some good news about one of their customers I do some research and sometimes invest in the company.
Good morning Martin:
Basically I use the same method you use. It works very well.
I have been concentrating on Brazil for quite a few years with good results. I lived there
for 20 years and I am familiar with most “Big Boys” inside out. I had a great 2009.
I am certain that a great deal of expertise and knowledge is used,and along with a few financial incentives from appropriate companies i.e. free holidays and all the other add ons required to focus attention.
When you deal with other people money thepain is not yours when all is lost
Sadly after many years in the motor indusry I am rather cynical about these things, also my own experince which has been awful.
Kind regards Diana
Hi I am just starting to invest and have very little money to invest so just doing small stocks so i am just learning Thanks Lee
About five years ago when things looked uncertain, I sold almost everything, and put the money into 5 year CDs at 5.0 and 5.5%. Unfortunatley, they are now comming due!
Hi Martin,
My allocation “scheme” is based on age. The closer I get to the exit the less exposure to equities.
I select the sectors based on what I persive as a trend. Right now I think the Energy Sector especially fossil fuel will be strong due to limited supply and increased demand form developing countries.
Also the deficit will erode the value of the $$$ therefore I am looking to place funds in assets shielded form the greenback.
Thanks for the opportunity
Jerry
the direction I will go is energy and natural resources.
also i will considered investment in precious metals
alternative material and contruction
Frankly I think the mutual fund managers and brokers, in general, are marketers of hype and just churn money for their own benefit. Record is most mutual funds track the market or do worse. Few beat it. I believe thats recognized and a big reason for all the ETFs. Likewise, brokers recommend things too late. Buy after a run up and sell after a fall.
Once I started doing my own research and my own thing I have been much better off and at lower cost
Vince
You flip the coin!!! The problem is we generally suffer more hype and disinformation. So, we are left with that personal filter to take charge. First accept your own responsibility and the rest flows from there. Longer term the dollar gets weaker-ergo foreign investment and precious metals. apart from immediate needs. Some cash, some cd,s: some realestaterentals. NO MUTUAL FUNDS from long experience money in is invested fees taken, markets fault if it doesnt work-rarely manage. New ETFs good for trading, core precious metals and some trading to keep the brain working.
They have no more idea than the rest of us and simply go with the herd while their funds go up and down along with the underlying assets and if any of them dares to go contrary then he is duly chastised. Before the 1987 crash, one fund manager (I do not recall his name) wanted to break from the herd and sell at the peak but he was blocked by his superiors so he invested heavily in puts for which he was severely reprimanded but when his fund went up while others plunged, the upper management took all the credit and I believe he left the company. So much for expertize.
Martin Weiss Reply:
January 22nd, 2010 at 12:10 PM
Great example of exactly what I’ve been blogging about, Dave! And I can give you many, many more from the decade that just ended.
• Mark Kastan of Credit Suisse First Boston issued “buy” ratings on Winstar until the bitter end. No surprise there: Kastan’s firm owned $511 million in Winstar stock.
• An analyst at Goldman Sachs oozed 11 gloriously positive ratings on stocks that subsequently lost investors at least three-quarters of their money. He got paid $20 million for his efforts. His best performing recommendations of the year was down 71 percent; his worst was down 99.8 percent.
• Merrill Lynch’s Henry Blodget gained fame by predicting Amazon.com would hit $400 per share. It was soon selling for under $11. Blodget also predicted that Quokka Sports would hit $1,250 a share. It went bankrupt. Blodget issued and reissued strong “buy” ratings for Pets.com (out of business), eToys (lost 95 percent of its value), InfoSpace (shed 92 percent), and Barnes & Nobel.com (lost 84 percent of its value). Yet even while investors lost billions, Blodget and Merrill Lynch cleaned up — $100 million on Internet IPOs alone.
• Most bank stock analysts work for big banks or investment banks. So among the many that rated Washington Mutual, Citigroup, Bank of America, and others that bit the dust in 2008-2009, NONE told their clients to clear out of bank stocks prior to the debacle.
Today, next to nothing has changed. Too many Wall Street analysts and pros still push stocks because of what’s in it for them — not for how it’s likely to turn out for you.
I do not question the sophistication and utility of some of the tools used on Wall Street. Over the years, for example, a lot of solid work has been done by academics on how to balance a portfolio and minimize risk. The big issue is not the tools. It’s the bias. — Martin
try to spread things out
With 40 years experience in the stock market, friends always ask me,”how can I make some money” but then don’t act on what I tell them,or in some cases lost some money on the first get go and dropped out.
I would imagine that mutual funds managers and stock brokers experience the same. I had a boat partner with 40 years as a stock broker and I seldom took his advice. The one time I did I lost $150 K in a upstart oil drilling company named Harken.
My method is not genius. I simply try to study what Kramer taught me and pick a stock that is REALLY under priced, buy as much as I can,never less than 1000 shares, and hold on until I think it has gone up to where I think the price should be.
Sometimes I sell too soon and then watch it go higher and sometimes I hold on too long and watch it go down from profit taking in the market.
I know I should by and sell frequently using stop losses and maybe shorts, but time does not permit.
I am interested in gold but I think the price is too high. I am not comfortable investing in foreign stocks at this time.
I think MGM might be a great stock to buy short before they go BK. What do you think?
I am personally, and recommending to my clients the following allocationsö
soverign debt 20% each Portugal;Swiss:Brazil;Australia;20% etf with 2x gold. I own an FINRA broker dealer Financial West Group where we manage 5bn USD of assets in and outside.
I subscribe to The Alliance, and to a couple of Resource newsletters, and am also a graduate of InvesTools courses. Upon receiving recommendations for various stocks, resources, ETFs, and options. For timing, I look at the charting, stochastics, and volume, as well as trends and valuation of the issue in question. I then research the company or fund regarding moats, management and market cap. At that point, I will make a determination as to how much I am willing to risk on the company, and at the balance of my present portfolio, to determine what percentage to invest, or what to sell/buy to keep the balance I want.
Question 1. Most probably use a model based upon what was taught in a financial engineering class. A model that might have been slightly modified by the hedge fund/mutual fund/ broker they work for.
Question 2. They’re not ’shooting blind”, but they’re following some “model.” But that model is based on a limited number of observations and might collapse when a “black swan” event occurs. Whatever the model is, you can bet that they didn’t create it – they’re just following the herd and hoping that the herd isn’t jumping off a cliff.
I rely for investment decisions upon Claus Voght (Contrarian Portfolio), Richard Mogey and Larry Edelson (Foundation Alliance) and Bryan Rich (Currency Service).
Bill
I suspect the financial “professionals” rely on historically reliable economic indicators, but I also think they are subject to the twin foibles of wishful thinking and outright denial of facts and figures, which trip up so many individual investors. I strongly suspect the US is headed into uncharted waters with respect to the consequences of the irresponsible financial behavior of our government and certain elements of the private sector, and I would be more interested in knowing what the financial “professionals” are saying privately, to their close friends and family, than what they are telling their clients.
I WAS LOOKING FORWARD TO THE MEETING MY HEALTH HAS TURNED FOR THE WORSE AND CANNOT BE THERE
I’m setting up for short positions.The market still has a little upside for the next 2 weeks, but overall the market is over bought and when the sell off begins I will be on the winning side of the trade..One of the main indicaters I use to gauge growth and stability is OIL and as we have all seen it are not moving up….
I’m focusing my investments on precious metals and energy with a little exposure to Asia and agriculture. I’m not interested in domestic stocks or bonds at the moment except to sell. I have a list of stocks, indexes and etfs that i watch and look at dips as buying opportunities. The percentages are not exact and depend on the buying opportunites that present themselves, but the majority of my positions are in precious metals.
I won’t reevaluate this strategy unless I see concrete signs of monetary tightening and/or strength in the economy.
Market manipulation short term makes impossible to do right thing short term.
Thus, tech analysis and fundamentals are the key to profitable investments.
To answer your two Q.:
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Priority for stability – gold & silver ETFs, and some in profitable mining stocks like GG, ABX and growing NXG and SWC. That should be 25% of the Portfolio.
Oil & gas – OIH around 20%.
Foreign currencies: AUD and CAD vs. USD – 20%
Some solid tech. stocks both domestic (like AAPL) and foreign (RIMM) that traded in the US – the rest of my Portfolio.
Question #2: How do you know how much of your money to invest in each area?
Allocation is done as above, and monthly I can adjust it based on developments and taking out some profits for re-investments and personal spending as needed be
Hi there Martin, Ive only begun to study finance and the markets 2 years ago. Your service has been a big help.As for stocks and bonds and their balance, well I think the world has changed so fast that it depends upon WHICH bonds and stocks one is talking about.
There are markets and bonds overseas I wish I understod better. What is safe anymore?
I personally tend to rake a little more risk, not smart I’m sure. I am loooking for return and safety, who isn’t? I don’t see the point of hoarding gold, do we just wait 30 years for the next gold rush when the dollar falls apart again, to sell it?
Seeign where we are in the world, what these emerging nations are doing and needing,what we might be doing and needing as well, that makes sense to me.
Serena C , Santa Barbara, California
I meet quarterly with my financial adviser who follows charts. I sometimes feel using this method he is too close to the trees to see the forest. I appreciate the various advisory services such as yours which give a longer range perspective of government, World, & commodities changes. Using this method I have pulled stock investments substantially & placed those funds in CD’s which although not keeping up with diminishing value of the $ has at least prevented the serious loss of capital. Remaining investments remain in Asia, gold CD’s, & growth stocks.
I happen to believe investor psychology drives stock prices. Most of today’s investors did not live through the crash of 1929. That is why today’s investors did not fear the run up excesses signalling the 2008-2009 collapse.
But now today’s investors have been ‘immunized’ to react strongly to the next perceived market correction. That correction started today. Investors will move away from the market RAPIDLY, since they remember how a crash feels. So rapid will be the investor reaction that the market will crash further based on this psychology.
Gold, silver, real estate, corporate debt – all asset classes are subject to this move to the downside. People will look back to see what retained value in the 2008 – 2009 market downturn and investors will buy those few asset classes…. basically the US dollar, no matter how paradoxical that might be on fundamentals.
This market downturn will be accentuated by the politics of the Brown victory in MA, since this means no more ‘bailouts’ and no more ‘too big to fail.’ Without coordinated global government spending the markets will deflate like a BALLOON.
Martin Weiss Reply:
January 22nd, 2010 at 12:11 PM
James, one of our own, very bright experts expressed a similar view in one of our conference calls this week. In a nutshell:
• Democratic 60-vote Senate majority = the reality, or at least perception, of unbridled print-and-spend machine. But …
• 60-minus-one Senate = an sooner end, or at least a downshift, in that engine, killing the golden goose that hatched the recovery.
I agree. But there are two lingering doubts that we need to address:
• When push comes to shove, and more unemployment rears its ugly head, will Republicans vote for budget-busting stimulus just as fast as most Dems?
• And regardless of who controls the Senate, does anyone control the Fed?
Yes, there’s a burgeoning popular outcry against deficits and Wall Street bail-outs. But I have yet to hear a peep about what really counts the most: The Fed’s nonstop, Evel-Knievel, death-defying zero-interest-rate stunt. That’s the final piece that could burst the bubble of recent months. — Martin
I think that mutual fund managers use rational reasoning to arrive at their investment decisions. I also notice that overall the group does not have as good an investment record as the S&P 500 index. I remember when an investment manager took over the management of the Magellan Fund from Peter Lynch. I recall that he decided to place a great deal of money in, I believe Treasury bonds, with the belief that the market was going to tank. He was wrong and Magellan had a poor showing. I think when you make an investment decision like that have you decided to make a gamble.
My investments are diversified with an assumption that inflation is coming. I have a taxable stock portfolio and mutual fund investments for a 401k and Roth IRA. During the market downturn of 2008 and the first part of 2009 I continued putting money into stock mutual funds every week. At this point the 401K is not back to where it was before the downturn and the Roth is slightly ahead of where it was before the downturn.
Diversification and dollar cost averaging is what has worked for me.
I believe that their decisions are based upon how they want to manipulate certain stocks and sectors. Window-dressing and pay backs also come into play.
Martin, in 1988 I was working for IBM in Argentina when their inflation rate was
~2000 %/year. We got paid twice a day — at noon to buy the evening groceries, and the end of the day. You should research that era and analyze the similarities to the USA today. While inflation is not here yet, we are betting that the same process that did not stop the financial meltdown will fix the possible inflation tsunami.
As to your “fund manager” question: they use “models” which do not adequately represent all the probable and improbable conditions in the market, and then they do not stress test the models and build feedback systems sufficient to allow prompt corrective actions. Then they sub-optimize the process they built by setting limitations on where and how they can invest. It fits the definition of insanity. The operable word in your questions is “reliable” – yes, within planned parameters; no, within the real-world context.
Does that help? john@jadtech.com.
Martin Weiss Reply:
January 22nd, 2010 at 12:12 PM
That helps greatly! Thank you VERY much, John. No doubt. If the Evel-Knievel Fed keeps this up indefinitely, we’ll wind up in Argentina or Brazil of the 1970s and 1980s. You were lucky. Where I was during that era — a small town in the interior of São Paulo state, Brazil — lots of folks didn’t get paid at all … or almost as bad, got paid with three months’ delay, when the money was virtually worthless.
But deep down, I’m an optimist: I think the Fed will flop and won’t make it to that particular finish line (hyperinflation). As Claus Vogt just told us, at some point, long before then, Mssrs. Bernanke and Geithner will be slammed by a global creditor revolt — bond investors and entire countries refusing to accept more U.S. debt. They will be forced to get off the fast-track lane, slow down, or even reverse course à la Volcker. Let’s hope he’s right.
As to models, they do represent most of the probable outcomes, but as you imply, virtually none of the most important kind — the improbable ones. In our analysis, we seriously consider the improbable, and we even constantly question our own notions of the “impossible.” That doesn’t mean we can predict the events that surprise and shock everyone else. But when they do occur, at least we’re readier than most to take react and act. — Martin
buying oil,medical,mining,staples
I think most Wall Street money managers are shooting blind and gambling, and making unnecessary trades, or at least they were before the recession hit. Everybody wanted to be the big winner, to take on risky investments and beat the market, and then brag to all their clients about how much money they made. They also traded excessively because many charge a transaction fee. The problem with everybody trying to beat the market, is that the market will only allow so many winners, and when managers place risky bets with reckless abandon like they did, the losers lost big.
Since the crash of 87 , i have been reeding, watching and listenning. One thing is sure to be correct . “Do the opposit of what the forune tellers advise you to do “. It is all a loosing game , so sad .
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
Some managers probably use a god bit of science in their process. I think most are just guessing or betting based on their own understanding of the data that they had available to review. Either way, they are taking chances on future unknowns.
My impression of the Wall Street pros and brokers is that most use a lot of sophisticated computer models and a sprinkling of professional networking. Me, I read and read and read, then read some more until I get that gut feeling of where I should be.
My wife and I have the majority of our money in short and medium term municipal bonds. It is less risky than the stock market (although we both have 401Ks). If the market starts a possitive trend than we can invest the bond income in the stock market. We also have investments in gold(bullion). The dividends on stocks and interest on bank deposits are so pathetic that the bond income looks tremendous.
my broker has definitely found a way to maximize His profits without worrying about how to minimize my risk.As the commercial so aptly says,”he makes money whether he is buying OR selling for me”.As the bulk of my funds are currently tied up in a company 401K with somewhat limited options,I have given my outside the plan limited funds to play with.
Following other analysts on longer term technical analysis, I formulate a short term trading plan and an intermediate term trading plan. To wit, I am currently short GLD, and was out of most mining stocks(platinum included) several months ago. Depending on the bottoming of this down move, I will go long GLD(using options) as well as long the mining stocks. Critically, at the next short term top, I do not intend to be ALL out on the equities, as I think we’re in a longer term bull market in the metals.
The same process applies to other markets, which I monitor daily.
I cannot get my head past the fact that the Fed are “hell bent” on destroying the dollar. Period! This surely can only mean inflation. Subsequently I am 100% invested in precious metals and commodities. What else is there to do when trust and faith have been obliterated in current financial systems and governments?
With no accountability in Washington, how can we be expected invest in our own country? Very frustrating.
Hi Martin: Iwould put about 40% of my money in gold 10%of my money in bonds 25% of my money in stocks and 25 % in cash
I lost most of my portfolio during the last year, so I took your advice and moved most of my money out of high-risk mutual funds into more safe and liquid investments, like CD’s. I was scared out of the market, and also lost my job and health insurance, so I don’t have anything to invest, right now, and I can barely pay my bills. I’m just trying to hold on to what little I have left. You may not want to hear the hues an cries of the middle class…Maybe you should’ve asked someone else.
They are gambling and playing the averages. Even a broken clock is right twice every day. When I do not understand the game I don’t gamble. And, I surely do not understand the game going on in the markets with stocks or bonds, EFTs or commodities or metals. I do understand risk. I do understand annuities. I am out of the market and into annuities. Treasuries? A disaster. Anyone who tells me he can predict the future I suspect. It cannot be done. So, it is guessing and sometimes the guess is correct. More often it isn’t.
I believe that mutual fund managers are like sheep and thus make decisions they can defend by saying all the other fund managers are doing it. I consider this a way to avoid doing their own job and still justify a paycheck. That is why I don’t use mutual funds anywhere I can avoid them.
I currently have most of my small portfolio in commodity related items such as energy trusts, and small to midcap mining companies. I am keeping about 40% in cash to use in options trading. Currently I won’t keep all or even most of my options money on the table at any one time. That way I can ride out bad trades with the good ones. I depend on researchers such as your organization for assistance in locating what appear to be good trades.
last year was my first year of trading. With your advice I grew my initial investment by some 80%. I believe this is no time to try “investing”. I am interested in profits on short and medium time frames.
I follow technical data after considering the fundamentals. I am not an expert, but seem to be able to tell the difference between a sales pitch and honest advice. Too many spend too much energy selling their “newsletters”. I find that a turn-off.
I really have no system and rely upon my financial advisor. He has consistently lost my money since 2007 over this down turn in which I have not recovered yet continually takes his percentage from my dwindling funds justifying his rationale. I am anxious to hear of a way to invest systematically and rationally without paying a financial advisor or anyone else. To me, the financial market a mine field – full of crooks and ripe for picking from hard working, long term saving people like myself.
Hi Martin,
Firstly, let me answer your question straight out — I would hope the the Pro’s are using proven tested methods based on years of experience — thats why I subscribe to some of these investment articles –now having said that, I am just recently retired and new to investing – I admit I only have approx $100K to invest — not much I know by your standards or the majority of your subscribers — but its all I can afford so I’m very cautious on what I do —
One thing I have noticed after reading numerous articles from yourself, D Fabian, Keith Fitzgerald, Alex Green, Mark Skousen, etc is that although y’all believe in sticking to the fundamentals when it comes to investing, your all very caught up in recommending certain stocks, common’s, bonds, ETF’s , and your all different, which certainly makes it hard for a new comer to decide which is the best route to follow —
Sorry, for the long winded message but you did ask for comments
I appreciate this opportunity and I thank you–
Gord
Add=on to above comment.
To answer your issue, I do not have a set allocation percentage. Current: 20% short all stock markets, other 80% spread equally short all other markets with 10% of the 80% long the dollar.
I really have no system and rely upon my financial advisor. He has consistently lost my money since 2007 over this down turn in which I have not recovered yet continually takes his percentage from my dwindling funds justifying his rationale. I am anxious to hear of a way to invest systematically and rationally without paying a financial advisor or anyone else. To me, the financial market a mine field – full of crooks and ripe for picking from hard working, long term saving people like myself.
1. I haven’t the slightest idea how they do their selections but obviously not very good.
#2 I am 84 years old and have been doing this stuff for 60 years and I try to end up with a plus at the end of each year. The problem now is that many of us are blind sided by the technocrats that push buttons for trading so that I feel that for us non tech types it has become a crap shoot.
I have been in the investment industry for 43 years. I have found Ken Fisher to be an excellant and highlyaccurate market forecaster for 25 years. So I depend on his insights to make my decisions about asset allocation as well as sector decisions. Usingt the MSCIWorld Index and the MSCI Emerging market index as roadmaps at leasat 50% of my assets are global equities.
I am a retired Ag bussiness person, I have been a farm operator for many years and durring those years have been in the dairy cows and for 25 years we had up to 30,000 laying hens. In 79, we got out of the chicken bussiness, and focussed our attention on the milk cows and storage and marketing of farm produce. In the 80’s we wondered just where the end of the tunnel was. We made a few changes and got to where we could see a glimmer of light. Now I have retired and our son and his family are running the opperation. We sold off some of the land and bought some more dirt. As one person told me, ” they are not making any more dirt now.” For now i am keeping most of our money tied up in dirt, What we have is mostly rented out and I from time to time invest some small amounts in oil and other items I think that energy is a safe choice, along with some tech.
Truthfully I have no idea, but if I had to take a guess I think they just go with whatever and try to make money for themselves not their client, themselves. I don’t think they do the necessary research, they just go with what everyone is doing and what is popular.
I spend 3~4 hours a day at my computer reading all the advice the pundits have to offer. I follow their line of reasoning an advice and invest! 8 out of 10 times they are wrong….you woulbn`t know this from their come-on ads. They cite stocks that HAVE GONE from 50 cents to 5 dollars…..how come I don`t know or was advised to buy at 50 cents? I should start my own NEWSLETTER JERRY
I have been out from the market a few years and because my age I will not go back. However I am very interested to buy euros and thank you for your messages especially regarding your dollar/eruro opnions.
answer#1 by the seat of my pants! #2 bio rythems pros probably use moving averages…
My approach to investing is simply to have very few investments that are as “local” as possible, no more than 6 at a time and watch them closely. I use the Goldielocks approach; some I can’t loose money, some I can loose most of the money, but also gain a lot and some just right in the middle. Although I’ve lost money on things I understand well in terms of everyday operations, I still only invest where I have good knowlwdge of how their profit is actually made, end-to-end, like real estate. So I’m not likely to invest in a non-US based company, naturally operating globally is good. I have no interest in any metals, but I like tangable items or simple / direct services that are efficiency multipliers and especially if they are tax efficient investments and a debt free company (rare but a big plus for me). Example: I made good money on a direct Ford stock purchase. I apologize if this doesn’t track with the question format, but I just don’t think that way, it’s too complex for me, too much to watch as closely as I like.
All The Best,
Chris
The reason for not responding before is that I have a relatively small nest-egg of cash. Too small to have qualified for participation in one of your previous offers. At age 86 my office bldg(paid for) gives me enough income to live comfortably. I have zero debt.
My only holdings are a small amount in SPDR GLD, the balance all cash, until recently in CD,s.
I have absolutely no idea or feel for how to invest this cash, and am apprehensively watching it devalue every day.
Leon
Dear Martin:
I am sorry I can not help you with my answers to your question. I am not an active investor at the present time. I am retired, but I enjoy reading your newsletter every day, and I would like to congratulate you and your team for all the wisdom you give away to your subscribers. Thank very much. By the way, I live in Colombia and went to school in the U.S.: Chemical engineering at MIT, and Economics at MIT and Harvard. Again, congratulations and, as you say, God Bless.
Hugo.
I think mutual fund managers and wall street brokers make investment decisions by simply guessing and shooting blindly based on corporate reporting. If it were anything more, their fund returns would be greater than the market index, and would certainly not loose money in market downturns.
I think that Brokers etc. base their decisions on YIELD< meaning what will yield them the most return.
To answer your question today, I personally do not believe they have any type of system in place, but merely will do anything that is self-serving. Many will claim this is too harsh and maybe they are correct. All I know is that the vast majority, especially during the last couple of years, could not even match the S&P returns.
I am currently using the life-styling system of investing which has become increasingly more popular in Ireland and the United Kingdom in recent months. Basically the asset allocation depends on your age; initially you have a heavy weighting in Equities and as you approach retirement this weighting shifts to less volatile assets such as bonds, fixed interest and cash. Outside of this I invest in satellite funds such as currency funds, commodities etc but the bulk of my investment is in the life-styling system.
I have been quite aggressive (all equities, no fixed income) but lean toward Dividend paying stocks and MLPs. I use Schwab’s rebalancing tools to determine my weightings in each sector. I’m well diversified but have completely avoided Financials plus I hold about 10% in gold mining stocks for the leverage they give me in the gold sector. In addition I use the S&P Sector Select SPDRs web site to see which sectors are out performing. I generally try to overweight those sectors. Right now I am overweight in energy/natural gas plus I hold about 10% in cash. I try to rebalance periodicaly. About 30% of my portfolio is in international Stocks. I do not invest in currencies because I have determined that without complex leveraging strategies it does not pay. So far so good.
King Solomon says in the Bible to divide your assets up into 6-7 places, and I haven’t found anything wrong with that advice. My rainy day $ is in metals because of what the Fed is doing to the dollar. I listen to what you guys are saying about the global economy and commodities, and divide a pot of retirement $ up into energy, energy suppliers, railroads, steel, copper, miners, and water, with stops at ~10% below. The only $ in U.S. stocks is in an annuity with no other options.
Martin,
This is the first time that I have written on a blog.
I have signed up for you emails to get information on what is happening to the fiancial health of out country.
My belief is that the brokers and pros have proven forms and models that they use to guide them based on the information available in reports that companies provide. The bad thing is that I don’t believe that the forms and models that they or you work as well as they have in the past. The reason that I believe this is because of the over involvement of not only our goverment but most governments around the world in the private sector.
With the fact that I can’t afford to invest any money in investments I think that I can sit back and observe things that are happening without the emotion of needing things to work so what I have invested isn’t lost.
The fact that I don’t invest any money may in the mind of most make my opinion worth nothing, but with that being said I will answer your first question.
I’m sure that there is plenty of money to be made with investing in stocks and bonds as long as they or the market doesn’t go down or completely tank. The larger question in all of that is when will that happen. I have been reading a lot from you research team and some of what I have read says that the market is far from seeing it’s worst. So when is that which is worst to happen.
If I had money to invest in anything I would do it in gold and silver. In the short term I might not make any profit, but in the long term no matter what happens in to our country’s financial situation or any others around the world gold and silver will alway have value. So when the worst happens the investment that is made will still have some value, maybe not what was hoped but enough to not be completely ruined when it happens.
I also believe what some of your team has said as well as others on Fox TV that the current situation isn’t sustainable and there will be a much larger fall that was experienced in 2007 thru current.
Thanks,
Brian
I know that Mutual Funds have people that review earning, profile management, how the company is poised for future growth, etc. I do however have a problem with Mutual Funds in that you cannot go in and out easily. I have invested in some EFT’s to avoid the this particular problem with the Mutual Funds.
Hi Martin,
In regards to question 1: When investing in the market I look for value stocks that offer a hedge against the dollar.
In regards to question 2: When investing in the market I look at how much I am willing to risk in any position first if the market moves against me. A simple system that seems to work for me is risking only 1% to 2% of my portfolio in any one position.
Example: $10,000 portfolio. Risk losing $100 = 1% of total portfolio. If the stock I am looking at is a $10 stock then I place a stop, say 20% below that at $8 so the market has room to move. That would be a lose of $2 per share if this position gets stopped out. $100 risk divided by $2 = 50 shares I would purchase in this position for a price of $500 plus commision. Then move the stop up as the market moves higher to capture profit.
I am a retired (close to 80) with less than 90 k to invest both personally and a partnership. I have neither the ability or the desire to wade through pages of financial data in which after doing so I would have no better idea on what to invest in. I subscribe to two of your newsletters (Stock of the month and Going green) which I review and make a decision. Obviously by my subscriptions I do not trade daily, weekly, and once in while monthly. Most trades I hold for at least 6 months. I have learned to be very conscious of when you reviewed your recommendations as I lost over 1k that I purchased at the wrong time, Did not start until February of last year. Although I have invested a little in the past and lost it all I am a new investor with no experience and rely 100% on what I read from you, Motley Fool, Jubak and a couple of others.
I do not have a structured system for investing. I try to read as many reports as possible from different analysts to reach a concensus position on these asset classes and weight the % amount invested based on the risk level.
Q.1 mutual funds
Q.2: Monthly I can adjust based on developments.
Since I am in your Weiss Inter Circle I have a problem in selling when more than one program is in the same stock since my portfolio shows a total number of shares. Sometimes I am selling someonelse’s recomendation along with the suggestion I’m acting on. Any suggestions? Listing each program’s summary moe often would be helpful.Thank tou, Weldon
Amber Dakar Reply:
January 25th, 2010 at 2:26 PM
Thank you for your comment Weldon. We shall send your suggestion to the appropriate department. -Amber
Nine years ago I decided to back a wind energy idea… The dollar shares are now $26.oo however as a partner share holder – everything is escro until the concept is sold and up and generating… It was a good retirement plan but; leaving me unable to diversify except for book writing because I have to support this commitment…
Thomas G.
1. precious metals = 50%
2. energy(oil) =25%
3. cash =25%
I read MANY financial news magazines and articles on a daily basis and I also know that financial experts such as those in Money and Markets, Peter Schiff, Marc Faber, Peter Chapman, David McAlvaney, and Gerald Celente (famed futurist!) that our printing presses are in “full swing” and that our governmental officials, at every level, have NO intention of balancing or decreasing either our federal deficit or government spending! Wall Street, the proverbial “back-stabber” is at this moment, attempting to go to court preventing the proposed “bank tax” of President Obama! The same “too big to fail” businesses and banks are, once agains, thumbing their noses at the taxpayer and our government! Rallies also occured prior to the Great Depression and it is no different at the present! In the long-run, this is what I see coming down the “pipe!” Double-dip recession due to the continuing liquidity problems of the banks and the worsening of the housing and commercial real estate markets (see Gerald Celente!), worsening of budget woes within every state and community, worsening of the employment market etc. HOW can ANYONE talk about “increased profits” and the recession ending (as Wall Street preaches all the time) when unemployment shows NO signs of easing up, decreasing, or getting better! Looking down the road…..Precious metals are the ONLY investment one should invest in BECAUSE the continual debasement of the dollar as well as OTHER world currencies as well! When the “shit-hits-the-fan” All of those people who invested in stocks, bonds, etf’s etc will find out that their investments will become nothing due to hyperinflation and the total crash of Wall Street! What YOU have in terms of barter will be nothing less than gold, silver, and food! It make take three years, five years or a bit more……but history will come into play……debasement of ANY monetary system be it by the printing presses or the dilution of currency leads to complete collapse of the economic system, anarchy, martial law, and dictatorship! What makes YOU believe that history will not replay itself within TODAY’S GLOBAL ECONOMY? Back then, they did NOT have CDO’S , credit default swaps, eft’s, Derivatives, etc. Not ONLY does this complicate the result of the “Great Crash to Come,” but it makes the “crash” more dire and there will be more suffering and more Wall Street investors jumping off skyscrapers or shooting themselves because of their faith in Wall Street and our US government!
I have an overall strategy for what I want to have in my portfolio in terms of bonds, market investments and cash. My fundamentals are already in place and I am pretty content with where they are at this time. I watch those allocations closely and rebalance a couple of times a year. This has happened over the course of about 30 years in the work force while I was working toward retirement. Of course, the market decline hit me, just as it did every one else, but I have recovered some and am OK with what has happened.
I have allocated about 10% of my overall portfolio to invest in suggestions from your investment team and joined your Inner Circle. While I cannot take advantage of every recommendation, I look at all recommendations that come through, analyze every recommendation, look at each company’s history for the past 3 years, look at the ratings of Morningstar and other ratings companies, look at my existing investments that I have made on your analysts recommendations.
After careful consideration, I apply what I have learned these past several months under your team’s advice – and I have worked very hard to educate myself – and I have a background in finance and banking, so I was not a complete novice when I entered this process, and then rely on my gut and available funds as to which recommendations to follow. I choose those things that I think will be the most likely to grow the fastest since this part of my portfolio is what I have decided that I can afford for more risk.
So far, that strategy has worked well for me. My basic portfolio is stable and I am not stressed that this money is more voloitile and I can handle the changes in value as long as the longer term trend in up.
I have very strict social criteria. I drive managers pretty nuts. I am in renewable energy and industries I believe in. I left my emergency money in double tax-frees, even though I don’t have much income, where it has been ok so far, though I know I need to get out soon. Internationally, I trust Brazil and China somewhat. I have been to China, and I was impressed with the work ethic, the curiosity, and the ability to get along in close quarters, although I read a recent posting on Seeking Alpha with a bit of alarm. An MIT economist felt that the entrepreneurial environment took a serious hit when Deng left. I wish I could remember the author’s name, but I think you could search that site and find it. I follow energy issues as a hobby, and despite how U.S. people beat up on themselves, I think we have some good companies who are still making things. In particular, electronics that will help with energy efficiency will probably do well. On the other hand, increasing research off-shore and with independent scientists on-shore, show the downside of big ag, big chem, big pharm, and big banks. I don’t want anything to do with those sectors. Where I live, there is increasing cooperation between city people and small farmers, though it is an intensely scary time for small farmers as monopolies try to hang on with the subsidies and special legal privileges they have wangled. I am a tough customer as well because I don’t much care for metals. I remember Julian Simon’s bet with some other famous guy, a ten-year bet that metals would not rise much because composites would take over some of the previous functions of metals. Simon won the bet. It is not necessary to make composites from leftovers from the oil industry. Increasingly, hemp and other crops will be used. Even though paper money seems to be swirling around D.C. and N.Y. and not getting around other places so much, we are an intensely inventive people. Enormous potential and resources haven’t gone away just because of the mind-boggling level of corruption in assorted governments. D.C. and N.Y. become somewhat irrelevant when they mess up on the scale we are seeing. I owe this reassuring way of looking at this to Ron Paul. I don’t necessarily agree with all of Ron Paul’s remedies, e.g. a Gold Standard, but his diagnosis is good, and his prescriptions for an end to military imperialism and violation of constitutional rights are also good. My advisor has to make me be diversified, and that is good and possible even within my strict criteria. We are in karma shake-out time. If ruthless methods have gotten a company to the “top,” they seem to be cruising for a fall, from my point of view.
I use recommendations from your group. I keep about 40% in cash type investments and wish there was some way to invest in those types (such as TIPS, etc) through my discount broker.
I do not buy stocks anymore. I buy gold coins, gld and everbank precious metal fund. However I think that gold is in a correction mode and right now I am waiting for the price to go below 1,000 to buy. I buy short term bonds. Currencies are too difficult for me right now. Energy is also very difficult. If oil goes below 60 I may buy some high yielding canadian or US oil companies.
Since disposing of a London house (I’m UK based) last spring, I’ve remained essentially cash-based. I was sceptical about the stock recovery, unduly so as it turns out, but I still feel another decline soon-ish is much more likely than continued rises.
I have also been nervous about sterling, so I put my cash 40% sterling, 10% gold bullion, 20% Euro, 20% AUD and 10% Yen. From that you can infer I’m more than nervous about the US Dollar, and I don’t have any USD-denominated commitments so I’ve not gone there.
Sterling has proven remarkably robust so far, despite our domestic political and economic disarray – the fact that all the major currencies except the upwardly-mobile AUD have similar issues is all that preserves it I suppose.
I’m expecting further sharp declines in UK property and a correction in equities during the year, and await those before re-entering both markets.
I wish I could have confidence in professional fund management. With a doctor, say, and a good education, you know you could understand what they were recommending if you needed to dig that deep, and the theoretical basis of their work is well-established and continually enhanced.
Unfortunately in the financial area the deeper you dig the more you realise the mathematical and statistical founding of the mainstream consensus is flawed, e.g. the Efficient Market Hypothesis, because it fails to describe reality. That’s not to say that other models are any better. The main benefit of the professionals is an emotional one – you have someone else to blame when things go wrong.
To my mind the most pragmatic approach is the least respectable – trend following. It is model-free and based on the data. If you are sufficiently diversified and manage your capital carefully the downside can be contained and the upside is enormous. It’s ironic however that for the average UK investor using vehicles like ISAs and personal pensions TF is inaccessible, and you have to do it yourself when it would be so much more convenient to have someone do the calculations and the transactions for you. TF is a way to answer burning questions that I have now, like “Should I be moving out of Euro cash, and if so where to?”
60% us oil and medical
40% foreign natural resources and manufacturing
hi martin,
in my opinion the wall street pros in the final moment are making an educated guess, basically a bet. i drew up my portfolio plan in 1982 to be balanced due to the lack of current info available at that time and i have stuck to that plan to this day which means when no was recommending buying certain out of favor investments (precious metals) i was. when interest rates were high i was buying SDG&E. thus when june comes around i will be using my Social Security money for fun. it seems to me that the really smart guys, like you, brainstorm. spare me the advisor who knows it all. God Bless bill
I think they are successful investors or traders if the following is in their resume:
1 Done their ten thousand hours studying and training to calculate risk
2 Used all legal means to calculate the risk of return. Charts, history, human qualities, market, supply/demand, general market feelings, etc.
3 Waited and watched other investor/traders move the specific market
4 Decided finally from all empirical evidence and the final irrational “gut” feeling.
5 Really exercises his/her decision.
VTY
Freddy Roy
Tampa, Florida
Q1. I am investing in bonds (Freddie Macs) in 2010, after discussions with Ed Jones investment advisor. A new offering has been issued with laddered interest rates at 2 year intervals (also maturity at 2yr intervals) starting at 2% and in 4 yrs, 6%; assuming the
government doesn’t call them sooner (which they probably will). If Helicopter Ben continues to sit on his thumbs, I will at least be at 6% interest in 4 years.
Q2. As I am retired, my investments must be conservative, so I invest in CD’s and
occasionally (as in this case), bonds. My current investment ratios are 37% legacy CDs and 63% bonds.
All of the “professional” investors are looking at exactly the same information on any given investment. Perhaps 5% of them dig a little deaper, and come up with some information that will lead them to more success than others. However, a big part of that added sucess is being on the right side of market timing.
the fund managers that I have read about have teams that go to the areas in question and see if opportunity exists. American Funds puts as much money into their research as Coca Cola spends in world wide advertising cost. Hands on like your team is the only way to know what opportunities exist. I thought MF managers had an incentive to grow thier fund as they are paid on increasing the fund size.
I’m in cash, except for gold and silver. No foreign investment — YET
The Mutual Fund Managers are interested in One Thing foremost, beating their Index. I don’t believe that they try to maximize returns or reduce risk. If they did – why all the hype from the MF Managers in 2008 when they lost gobs, but less gobs than the Index they tracked? They still considerd their year a “success.” Noone ever recommended to me reduce my exposure to stocks during 2008 (including my Financial Advisor). I had to do this on my own.
With help from you guys I started to get a little smarter – maybe not smart enough yet. But over the past year I have:
- Put money into hard assetts including Gold and Silver (had none in 2008)
- Moved 60% of my Bonds into Short Term instruments
- Moving slowly into TBT
- Moving money this week into MTP
- Looking at Gllobal Agriculture and natural gas
I am starting to understand that Mutual Funds aren’t really trying to make me money. They are just trying to beat their index (or Category). They are great when the Market is going up, but leave a lot to be desired when the market is Volatile or Falling.
I don’t intend to invest in any of these entities/instruments. It is obvious that the markets are permeated by an invasion of white-collar thieves that promote their products to an unsuspecting public. One case in point is that once the big banks began taking over brokerage firms – instead of trying to make money for the clients, they looked upon them as a resource to be harvested – selling them “house owned” bonds and stocks, etc. that they no longer wanted – all the while telling customers that it was the best they could do. Now they have taken the public’s tax money – with the aid and consent of their former (and possibly current) employees who are looking forward to a comfortable job at the end of their government tenure – and brazenly rewarding themselves with huge unearned bonuses. And then there are the corporations who are beating stockholders and lenders left and right by declaring bankruptcy – which is now just another business tool. The historic robber barons are more admirable than these guys – at least they built their industries – these new ones just worm their way in and buy off a board of directors.
It is obvious that they have taken over the government by buying off legislators, FDIC, the Treasury Department and the judiciary, so the individual investor has no recourse. Example – try to get your money out of Beal Bank since it took over New South Federal. While dragging its feet, Beal alleges to “pay” interest – sure, at an interest rate that is about 1/3 of what can be obtained in the CD market. If this is not white collar theft, what is it?
I only follow Safe Money recos. That’s why I still have srs, unwpx, dog, psq, eum,and sef. Currently at a 48% loss but holding for the next crash Martin taks about! Your faithful subscriber.
I invest very reluctantly and mostly by the seat of my pants. Sometimes I get hints from a friend who is doing well with his investments.
Martin, I believe most Fund Managers have one or more systems that they have developed over their careers based on experiences. But based on their overall performances they have as many flaws as advantages and they seem to regularly miss major shifts in market trends. Your own team of writers each have systems they rely on to make predictions but they do not always agree nor do they come out with reliable right answers. I believe the best that you can hope for in this uncertain world is a system that can marginally improve the odds against you because it is clearly not a zero-sum game, and winning is at best a temorary phenomenon. The analogy between Wall Street and Las Vegas is quite apt as only the house can be assured of long-term winning. So the Fat Cats get fatter while the rest of us struggle to eke out and hang onto some very meager winnings. The fact that some folks hit jackpots occasionaly or even win lotteries does not improve the odds for the rest of us. You know I speak the truth. :-)
Like Gene M, I believe that mutual fund managers rely on research teams and computer modeling of the markets and trends; Brokers largely sell what management tells them to, and I think the recent activity in the stock market is based too much on hype. That said, I am mostly invested in GIC’s , some Mutual Funds and the “noble” metals.
Money managers generally use research and analysis on the potential investments fundementals and or technical information
1) domestic or foreign stocks ?
I am long stocks whenevr I think to be in a bull market.
My favored indication about bull or bear market are the 13 ema versus 34 ema on daily charts.
My priority is to invest in high growth countires ( today BRIC and other emerging markets).
In the first stages of a bull market I invest 70% to 100% in stocks.
This percentage will diminish whenever there are divergences between the market and the long term indicators.(daily and weakly MACD,, RSI & stochasics).
(2) gold bullion and other precious metals
15% to 20% of my portolio is invested in gold metal. Permanently as an insurance against inflation. (during a general bull market I will buy also mines stocks).
(3) energy and natural resources
I invest up to 20% of my portfolio in commodities during general bull markets, and 0% of my portfolio during general bear markets.
(4) foreign currencies
I hedge my portfolio on the future market against a dollar depreciation buying suisse francs futures on a permanent basis..
P.S. Living in France, my reference is the euro
1) I try and find as many recommendations as possible before making a decision. If there is one I see that is first starting out, and it is an investment or a stock that I am looking for, and it doesn’t cost much money, then I normally buy it. Part b: I try and buy stock or commodities with the money I have left over.
(2) I normally don’t go over a tenth of the amount, so I am very conservative, in other words, I don’t put all the money in one basket. I invest in small amounts of gold, silver, oil companies such as cnooc in China. I also have ETF’s in China and Russia. I only have one stock from the USA and that is an energy stock. I don’t trust companies here in the USA according to all of the recommendations that I trust, including yours. Unfortunately for me, I don’t have much money to invest, so I guess I am waiting for a homerun on some of these stocks in the long run. part b: If I had more money I would like to invest in more ETF’s in India and Brazil.
Right now my wife & I (both retired) have invested all that we can. We have Apx foreign 5%
domestic 5% tangables 15% energy & natural resources 50% Bank CDs 25% comming due
in 2011.
To #2 Q Just a guess of weight & balance of what I read. I don’t trust Brokers nor do I trust anything wall street says, and 50% of what I read.
Sorry I do like and believe most of what you guys say.
Lew
RE: This week’s questions
#1 …All-important decisions?
Different funds – different models! Managers DO have a lot of research resources to guide decision making. After all, they are in fierce competition with OTHER funds!
#2 …Minimize your risk while maximizing profit? Yeah, sure… to a point (see above). However, funds must always be fully invested when the rest of us may go cash or short. Most funds are too big to move in and out without affecting the market to their detriment.
RS: Last Week’s Questions
For long term holdings – for yield, LLP’s, Gold, etc. I invest that part of my portflios that I don’t expect to need for 5+ years. Currently 60% in yields averaging 8+%. Also keep 10%-15% cash for new opportunities. Remaining 30% is for shorter-term opportunities.
Gold? Now 15.6% of total. Foreign about 10% directly with more from companies with high foreign exposure. Array of choices guided by fundamentals. Trigger pulling on the technicals.
Greatest weakness that has cost me significantly: Not trusting my plan. It’s the old addage, “Plan your work and work your plan.” The best, never ending strategy is:
I put 95% into digital Gold and Silver, and 5% into HUI mid tier mining companies. There is no other worthy investments and this strategy has kept my wife and I safe until yields rise and stabilize.
Martin,
I’ve modeled all of my investment decisions in the following manner: #1. On a macro level I pay close attention to the analysis of you and your Team at Safe Money. #2. Wells Wilder’s Delta keeps me updated on direction. #3. I utilize a spreadsheet to derive Ralph Vince’s Optimal “F” to proportion investments that make it through #1 and #2.
Bob Williams
Valdez, Alaska
i have made a little money in gld , but the problem seems to be “timing” especially since gold seems to be directly tied to the strength of the dollar !!
My experience with MF managers has not been good. I lost 50% of my capital before wising up. It seems to me that MF Managers use expensive proprietary computer modeling that is obviously not to successful since most funds do not do as well as their indexes.
I WILL NEVER INVEST AGAIN WITH FUND MGRS.BROKERS OR FINANCIAL ADVISERS UNLESS THEY CAN PROVE TO ME THAT THEY HAVE AN EQUAL AMOUNT INVESTED IN WHAT THEY ARE RECOMMENDING !! I’M ONLY CONCERNED WITH WEALTH PRESERVATION AND RISK DIVERSIFICATION. I’M CURRENTLY HEAVY IN CD’S, 10% METALS, 20% INTERNATIONAL MARKETS, 20% NATURAL RESOURCES. I’VE HEARD THAT THERE CAN BE SERIOUS TAX IMPLICATIONS ON ETF’S, BUT HAVE NOT BEEN ABLE TO LEARN WHAT THEY ARE. THAT YOU CAN POSSIBLY HAVE TAX ISSUES EVEN THOUGH YOU HAVE NOT SOLD SHARES IN THE ETF.
#1. I have been charting the market daily since 1960 and do my home work.
#2.I have invested in gold and silver mostly based on your recommendations. As for allocation,I have not considered that very much.
I try to follow the advice from the Alliance and Contrarian Portfolio on when, what and how much to invest. I also think there has been so little activity in Contrarian that there should be no new annual fee to continue with it until the following year – esp. since it is losing money this past year. Thanks
I do not use mutual funds. I concentrate on oil and gold (small caps) and look for companies which have production and likelihood of more. I was lucky recently when
Sinochem took over one of my oil companies at a good price. I also favour – thanks to
you – getting in to China and have invested heavily in HSBC bank which is already in
and going more heavily into China Their CEO is moving from USA to HongKong and I
expect a gradual improvement with very little risk – using them as a virtual ETF.
I assume that Money Managers (Mutual Funds, etc.) rely on tested technical means to evaluate investment assets.
RE: This week’s questions
#1 …All-important decisions?
Different funds – different models! Managers DO have a lot of research resources to guide decision making. After all, they are in fierce competition with OTHER funds!
#2 …Minimize your risk while maximizing profit? Yeah, sure… to a point (see above). However, funds must always be fully invested when the rest of us may go cash or short. Most funds are too big to move in and out without affecting the market to their detriment.
RS: Last Week’s Questions
For long term holdings – for HI yield, LLP’s, Gold, etc. I invest that part of my portflios that I don’t expect to need for 5+ years. Currently 60% in yields averaging 8+%. Also keep 10%-15% cash for new opportunities. Remaining 30% is for shorter-term opportunities.
Gold? Now 15.6% of total. Foreign about 10% directly with more from companies with high foreign exposure. Array of choices guided by fundamentals. Trigger pulling on the technicals.
Greatest weakness that has cost me significantly: Not trusting my plan. It’s the old addage, “Plan your work and work your plan.” Always STUDY LIKE HELL!
Good Afternoon,
Q: How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
I think they have guidelines to review the possibility of positive returns but they still use instink and gut reaction to the market and the Fed.
Jan 20, 2010
Life is simple if you choose to live it in a simple and reliable remembrance of past history. I invest only in commodities and I watch the natural curves of demand. My goal each year is 30 % plus. 2009 equaled 42.9 %. I invest in all metals and oil and gas. My
portfolio is now weighted in Silver and Gold. The next heavy weighting will be uranium.
The natural movement of industrial commodities could take me in and out several times per year. I am not concerned about how much I have to pay in taxes. I also do not allow myself to have any favorites or profit cows over 50%. I know we will see 30 year treasuries at a 10% return sometime in the next 3-5 years. I believe that inflation will drive all commodities during the next 5-7 years or more. Good Luck !!!! Richard
I get my ideas from Tony , Larry , and Claus,. Bryan Rich is really getting my attention with his dollar strengthing stratregy. Risk appetite has been with us since 3/9/09, but risk aversion could return soon.
I believe these guys are shooting just as blind as any amatuer investor. I also think thereis a herd mentality among collegues
Wall Street Pros use a combination of technical trend study; specific issue research; and momentum tracking. Unfortunately, some are also motivated by trades that benefit themselves and their firms instead of their clients.
#1. 1) I only invest in things that I sort of understand. Which is mostly domestic with a few foreign. few foreign. 2) Gold and silver to protect against inflation. 3) Energy and natural resources because the will always be in growing demand and they are very finite. 4) Don’t understand currencies. 5) Too much risk with too little reward at this time.
#2. I make the decision in each are based on my knowledge of the area combined with my assuption of the supply and demand.
When I invested in Mutual Funds I first looked at their previous history. Being a conservative investor, I then judged how much I could tolerate losing if things suddenly went wrong. Since then I have kept an eye on their progress/or not. The down times have made some difference in the payback but not to a degree that would initiate selling the funds, as of now. I would hope the keepers of the funds would also keep an eye on the success or loss of day-to-day or monthly progress and make their decisions in the same way. However, would appreciate your opinion on this.
Thank you.
I’m not an investor, rather a trader – in the 7 major currencies. I’ve developed a short-term strategy that’s working well. Manipulation and market rigging is less than it is with stocks.
Q/ How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
A/ Its my belief that Pro Fund Managers always go long as it pays off usually over decades, at least thats what recent memorable history shows us all. As long as the Market always goes up over the long run and that downturns are recovered at the most within 5 years, then thats as much as anyone can wish for isnt it?. Also consider this; to be too actively shifting around funds could be counter productive and lead to accusations of malpractice and loss of reputation. So I am guessing that conservative Investing in this way gets no one into trouble. As long as Investments are considered Long Term I guess this thinking is acceptable to most unsophisticated Investors.
But what if this time its different? It was rare to see any Pro Fund Managers suggesting going short or even going into Cash during Dec 2007 and through 2008. Maybe thats a good thing, as imagine the excalation in scale of the downturn if all the money left the Markets. But for me I would like to catch the “turns” or at least the meat of them, or stay away if it was financially unhealthy.
Pay attention to interest rate trends. Pay attention to supply and demand. Anticipate, not follow. Then try something you understand that seems to make sense. Then ruthlessly cut losses on a trailing basis and let profits accumulate. Forget allocation formulas.
I maintain a list of stocks that I’m interested in. I keep a watch on them as to news, momentum, and price. If one or more meets my price target with no adverse news, I seriously consider buying. I have two areas I trade in…one is dividend stocks for long trades, and the other is simply trades for near term profit with buys on dips.
I subscribe to 11 different financial publications and decide based on my
readings from these publications as well as other sources on where to
invest ( presently approx.38% in gold 40% in oil and natural gas the balance
in transportation )
Money Managers and Brokers form an opinion on what is going on in the world and make decisions based that opinion. There are at least as many opinions as there are managers. I have found my opinion to be as valid as those of the pros. I am staying with my target allocation and make my decissions based on my view of rewards commensurate with risk. When I get in it is for the long haul. I am not a trader.
If mutual fund money managers and Wall Street brokers and pros really had reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential investors would rarely lose a cent in the markets. These “pros” invest with only “profits for their services” in mind. I doubt they give a damn about their investors. Most claim to have “reliable” services, whether that be proprietary trading software or geniuses in the back room, but few of these “pros” protected investors from portfolio destruction in 2007-08.
The problem with most investors is 1. they are too lazy to do the work necessary to make the right investment decision, and 2. they are too proud to admit they have made a mistake and cut their investment losses quickly, or 3. they “pay” somebody to manage their porfolio for them and then blame them for their lack of success.
Investing succesfully is hard work. Consider it a part-time job at the very least. “If you want to get paid, you’ve got to do some work.” Not all investments are winners. Put in the work, pay attention, cut your losses, and enjoy the rewards.
Within the confines of a “prospectus” I believe the fund managers try to hold to a discipline. However most do not try to maximize profits. It seems that most mutual fund objectives are written to be a middle ground and with muddled language.
American Funds seems to try the best to indicate their positions and objectives.
I believe the mutual fund money managers use a similar “gut” feeling, but most times, they do have a system or set of “rules” that dictates their investment in particular securities and the money distribution throughout their portfolios. However, most Wall Street managers have whole research departments/teams, data archives, etc, that aren’t usually opened to the general public to assist them with their research and decision making of which securities to purchase. The money managers I’ve spoken with don’t have their money in their own funds, so they’re completely and emotionally detatched which gives them the ability to accept losses where the “little guy” who is trying to build up for retirement is strongly and emotionally attached to their investments and works harder to research and invest in better securities to ensure that future.
For years I’ve been using various mutual funds, mostly in my IRA. I’ve always hoped that the managers have the education and tools to assess the best companies to use in their fund. The little booklets they send to investors attempt to explain performance, but do not really address the managers choices. So, I’ve concluded that the public is supposed to blindly believe that the manager is making the right choices that are in line with the goals of that particular fund. Some of their choices are short term, some long. I have to wonder if the managers are, like congress, swayed by some type of company action group – you know, you put our company in your fund and we’ll give you this perk. It’s a scary thought and I hope it’s not true! Maybe it’s personal gut choices on the part of the manager.
I use a set of criteria to adjust my portfolio. They include: is the stock in an increasing group, can i buy an ETF rather than a mutual fund, are the stocks financially sound. I’m prefering altenergy, biotech, commodity {including precious metals}, and select stocks that appear to be doing the right moves.
How do I think mutual fund money managers and Wall Street/London/International brokers and pros make these all-important decisions?
I think they don’t really care as they will get a cut whatever happens. Sorry to be so cynical but Insurance, Banks and Investment companies are after what they can get out of punters and as long as transactions are taking place they will win. Sharks snakes etc come to mind. I am following my own path now having mostly lost out when funding long term savings/pensions with UK based institutions. I guess it may be the same in the US. All the best for 2010!
Mutual Fund Money Managers and Wall Street Brokers and Pros are like Wildebeest on the African Serengeti. Once the Lions get the herd moving, they pretty much all run in the same direction. Guessing and, Shooting Blind at least indicate an individual action. A Tested, Reliable Portfolio Structure looks good in print, but, essentially, they are all just Wildebeest. NO, THERE IS NO PLAN! I don’t trust em! No Sir, I don’t.
They simply see how much money they have to work with, and allocate accordingly
After consistently loosing money with Merrill Lynch and Edward Jones over a 10 year period, I decided I could loose money myself and actually feel better than paying someone to loose it for me. When I inherited money, I tried Horan Cap Mgt, simultaneously with encountering Money and Markets and Weiss Research, and in 1 month (Horan lost $1685 in Feb 2008 in AIG), thank you God, dropped Horan, and have been with Weiss ever since. I haven’t made money, but I haven’t lost anything like what friends with brokerages have, either – a big plus, in my opinion. I learned the hard way that brokerages are ONLY concerned with their best interests, not mine, and that it isn’t that I don’t have millions for them to invest. I have 2 acquaintances who had millions and now have less than half what they had, thanks to their brokerages, whom they continue to insist are their “friends”. Apparently the brokerages are more democratic than I previously thought.
I am currently allocating about 30% of capital in gold and oil ETFs because I am conviced that serious inflation will begin this year once the Fed raises rates. Iran will get a nuke and force a diplomatic showdown or military response. I invest another 20% in foreign ETFs like Brasil. The rest I use to play short term speculative stocks like ISRG. Since I don’t have a lot of confidence in my own prognostications, I subscribed to your newsletters for a more expert opinion.
Martin, I keep reading several suscriptions, study the markets and do technical analysys to decide when to buy or sell a stock or fund. For my liquid investments I keep around 30% in gold and silver, 10% in stocks (including precious metals stocks) 10% funds and 50% cash.
60% of my entire investmants are in a private real state company in my country, Argentina.
Regards
I am very much conservative when it is concern with my basic investment portfolio, then I trust only Bank FD’s, Govt. longterm investment etc, this is 25% of my total asset , rest I trust in gold ,gold and gold, so, as on date 25% safe investments, arround 10% properties, and rest 65% of my assets are in gold bullion , which I got arrount 400% return in last 10 yers, so if gold goes down to $ 500 I don’t have a probs, rather it will be my golden chance to buy more.
Some time if i get some extra bucs then I invest in stock market with somr fundamentally strong co. in india.
I am really old and since 1984 my doctors have told me on two occasons that I would not survive my cancer, heart and DVT problems. These past 26 years have not been pleasant but I am still breathing and have lived to see my posterity grow to 26 grandchildren and 31 great grandkids. How wonderful is that? These circumstances have motivated me to keep our investments in cash ready stuff. mostly gold and CDs. Had I known that I would have lived so long things would have been different. However gold hasn’t been all that bad.
Dave
Anyone who follows the media pundits is a fool. I am a trader, not an investor, because investing, as shown by any reasonable rationale, has not worked for the last ten years. My procedure is buy long what is going up, sell short all that is going down. It is absolutely menditory to use tight stops unless you want to lose your pants shoes, underware, etc. I do hold some high yielding bonds, but holding cash works well.
Martin, you have done an excellent job of warning the public of the pitfalls at hand. Since current yields are puny, why not hold cash and be patient, waiting for an opportunity. The current market, in case you haven’t noticed, is a bomb waiting to go off.
Uncle Davie
1 Wary of foreighn stocks
2 Gold Mining 52.4%
3 Silver 9%
4 Energy 29%
Structured Portfolios And Historical analysis
I am 89 years old and have been through the depression and the ups and downs of almost a century. The mess we are in now beats it all. Watching the market collapse today after the big Mass. win confuses me. Thought it would be upbeat today. I am in gold, copper, platinum.and oil. Four China stocks and 50% in cash. Took a 40% loss in the crash. Feel sorry my kids and grandchildren. WWII and Korean veteran. Hoping for the best for all of you who are coming behind me.
Any knowledgable investor knows that Mutual Funds have X billions to invest. They have to show growth and good performance otherwise they will strike out. Mutual Funds are too big to move quickly in and out of the markets. However the managers personal incomes are based on performance. So, they take chances or near chances (depending on their mandate) and try to hit home-runs.
They rely on Technical Analysis, Advisors and Best Performing Sectors to try and hit a home-run. So, today they`re on top and tomorrow they are not.
ETF`s are probably as good a place as any to put your money. Probably Income Producing Dividend Funds. Maybe Agriculture Funds as people have to eat and similar non-cyclical funds.
Personaly I`d rather have the fun and give my money to the Casino`s than let Wall Street Brokers lose it for me.
I think the world situation is so unpredictable, probably more than ever before. This is both in terms of economics and politics. Moreover, natural disasters seem to be increasing in magnitude and frequency, to say nothing of the terrorist threat, which de facto ‘rings alarm-bells’ in the sphere of personal freedoms so much taken for granted until recently. There may well be a ‘double-dip’ recession, but ‘artificial wishful thinking that all is fine’ lends itself to delaying what may prove to be the inevitable ‘crash’, all the more pronounced when it happens. Accordingly I dare not invest in stocks and shares. Indeed there is a virtual lack of confidence in investing anywhere, other than perhaps in gold and in the ‘guaranteed’ (as is the case in the UK up to £50,000 per Financial Institution) UK savings’ accounts. The problem with gold, however, living in the UK, is that being quoted in US dollars makes wise decisions more difficult. If the US dollar falls, then gold could well be cheaper in terms of Sterling, thereby detracting from profitabilty.
AS a ‘footnote’, it would help if this Site could also comment with advice more specific to UK and other European citizens, as opposed to only those in the USA.
It is conceivable that some mutual fund managers and others recommend the funds based somewhat on their early performance, and perhaps moreso on how much they, the fund managers and others, stand to earn initially from those recommendations.
“Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?”
There could be some of all the above. It is reported that many fund managers and other advisors commonly recommend diversification within a single class of investments, eg. paper, while ignoring other well-qualified investments that might not be as vigorously promoted to their business. Is this so?
will invest all my $3000 in foriegn companies. GSI is my favorite.
Dear Dr Martin
Thank you so much, I have small business in forex trade. I would like to know about best way to earn money.
Best wishes
I’m a 57 year old lady who loves to watch the market. Have over 250,000 in market. Pick my own stocks. But my dad and I subscribe to many news letters like yours. Don’t make alot of money off the trades from your recommendations. We don’t have the patience. Dad is 80 and loves to trade through me and E*trade. We both believe that the trade is in the commodities. When they go they go!! Have to have the stomach to watch the ups and downs. And don’t say put your stops in. MM watch for this and then you are out of trade. We have also done momo buying and selling only to find out by the time you pay the taxes would have done better staying in the stock. Have a 5m and 3m 2nd to die with AXA. that has been a nightmare. I have taken over picking stock there. Thought my agent had a fiduciary reponsibility to get me out during the 2000 and 2007 crashes. Not so, so I pick and get in and watch like a hawk. The grap that the MM pull everyday is unconshionable. If anything I have become a sinic (?) in trading. Even the news letters we get have proven that when they make a recommendation they are selling to us little people. We are bag holders. I hate annuities for all the fees they charge as well as mutuals. ETF are a little better but still fees to “other people” who run the ETF. Nothing for us guys. So Mr. Weiss it was very nice of you ask me how I felt. Thank you for the opportunity. Sandra Latey
I have no idea how the [pros]? make these decisions. Should be interesting if there is a
pattern, formal or what ever. Lloyd
I’m Swiss, 67 yo, and living in Switzerland, I’m graduated in business administration and I’ve been managing a small co employing 200 people. I’ ve always hated debts. I don’t have any and the co I’ve been managing has also no debt. I’ve started to buy gold when it was quoted 400 $ /oz….I was just thinking that the governments’ policy was going to collapse generating a huge financial mess….I do really appreciate your comments, quite rare actually, but I do share your opinion 100%. So about Wall Street and other stockexchanges….I do just not trust them! So I do guess that an honest financial analyst should work on solid financial data crosschecking them, but I do feel sometimes that information is biased and the recomandation or decisions serve some other hidden interests. I’m extremely conservative, and I sleep very well!
My personal investments are just concentrated in precious metals and in properties on the lake of Geneva area: a wonderful area to live.
Thanks for your interest . Thanks for your comments. All the best to you and to your fist class team!
Alex
As I am a small account trader, I have made the decision to focus strickly on futures. As a result of this decision, I have no idea about what is going on in the individual stocks world. Thank you very much for Money and Markets.
Dear Martin,
Start from the point that most of the professionals that you asked about are making parasitic bets on the outcomes of productive investments that others have already made. Except for some in the commercial paper trade, few of them are doing anything to provide money to companies that will use it to continue existing jobs and create the millions of new ones that this country must have in order for there to be a healthy middle class.
I have had experience with two firms that claim to seek absolute, rather than relative returns, by developing portfolios that are supposed to be safe because their holdings have little cross-correlation. One turned out to be primarily betting on increasing interest rates whch I did not agree would necessarily happen, and, of course, it hasn’t.
The other has three different major portfolio objectives, with three variations of each, or an array of nine different formulas for buying and selling mutual funds. The client gets to pick which of the nine he or she wants. The firm does a remarkably high level of churning, and I have to believe that its only assurance is to feed those who process the transactions.
Yesterday, a noted advisor said that if the Republicans win in Massachussetts, the market would surge. As I write this, the Dow is down more than 180 points.
As to proven ways to structure portfolios, I question the “proven” ways. For example, those based on the post-World War II history are not facing up the prospect of baby boom retirement stock liquidations.
In summary, I don’t think there are proven ways to engage in parasitic betting.
Thornton “Tip” Parker
Author — What If Boomers Can’t Retire? How to Build Real Security, Not Phantom Wealth.
Dr. Weiss, I joined the Million Dollar Contrarian Portfolio because I know nothing about investing! When you came out with the Contrarian Portfolio and were willing to invest 1 million of your own money I thought I could risk my measly 8,000. With life changes, I joined last year and immediately had to pull my money out before I could invest. So, I have not been able to take advantage of your expertise. I do not have the time, nor savvy, to wade through all the great advice on your site to know what ETF’s to invest in. The Contrarian Portfolio would have been perfect. It told me exactly what to invest in. This past year I have only been a voyeur. Sadly, as I am again just starting to save for investing, I do not have enough to stay with the portfolio this year. Believe me, I would if possible.
i check out various sites on the internet and balance what i’m reading to decide what could be the best investment. mostly, as a fiduciary, i invest for my clients. the age of my client is what determines how much of their money is invested.
Dear Mr. Weiss ,
I am sorry for not answering your demand earlier.I had some problems like back aches and stomach virus . I am O.K now .
My best teacher was my father who lived all is life in Brussels-Belgium and was a banker until the second world war started.
In the 1960s ,he became a gold investor because of his experience in the stock market in Belgium .Did you ever heard of Alibaba ?He had a “friend “working at his bank” who was also professor at the Universite Libre de Bruxelles .The name of his course: “Deontology in Finance”.He was one of the worst crook in Belgium.
I did learned my lesson here in the U.S. and lost all my money in one day some 10 years ago .Since, I did spend all my money in Art (art glass ,painting and sculplture).
It was a great way to invest and learn at the same time and my collection keeps its value .It’s a great hobby when you retired .The problem for me now is that I cannot sell anything in the present marke.Thus :
My conclusion today : I should have follow my father advice and invest in gold ,one ounce at a time.My father was investing one kg. at a time.
The answer to your question : I would invest in gold ,in gold stock in Canada ,China ,Brasil etc ………+ in energy ,food as you advice people to do.
My preferred metal is Platinum (I am an Engineer).
Reason I don’t invest in stock: there are too many lawyers in the U.S.(one million of them) .
I never met an honest brokers in my life and gave up finding one.
As an Engineer ,I like certainty .
I don’t get certainty when listening to the people in government ,the economists with one exception :Stiglitz .
Have a happy New Year 2010.
P.S. Today ,I have less than $5.00 in my wallet ,should have $75,000.00 next week and maybe $7.500,000.00 a week later.That why I stay in contact with you and your people .You are the best place to learn finance today .Your business is really the basis to start an enjoyable Hobby.Thanks.JJR
Just based on gut feeling, sometimes pick up some tips from brokers, barrons etc. No fixed rule for asset allocation. I think most money managers used education guess to gamble investors money. No one save afew were able to predict the housing bubble, and banks problems, they used their fundamental analysis like PE etc to buy the big banks and autos and get wipe out e.g. Bill Miller….well the stock market is a big gambling casinoes, it is especially true now.
I use Weiss and a few other services for information and ideas. I am retired and need protection from inflation. My retirement funds and SS cover my expenses currently.
My portfolio is Gold and silver 17%
Stocks total 27% (China 6%, Energy 12%, Agriculture 3%, random 3%, shorts 3%)
Cash 56% (53% MM, 3% foreign exchange)
I think professional money managers try to choose stocks based on fundamentals and try to choose stocks and areas they think will do well, however i am not sure they perform much better than the market.
I am 77 years old and am scared to death at the way the stupid idiots in Washington are blowing money. The US debt is climbing at an ever increasing rate. They make no effort to ‘balance the budget’ and keep giving the non-working class more and more. I believe that we (as a country) will not get out of this mess until we throw the Democrats and the Republicans all out of office and get some fresh blood in Washington. I have only a small amount to invest and that is in gold (GLD ETF) and Silver (US 90% coins pre 1965). I am trying your World Currency Alert, but as yet haven’t seen much happening.
Thx Martin. I have learned,in my own investing,to always keep a focus on the macro picture to help guide my decisions,as opposed to just individual stock picking.I think asset allocation decisions need a constant reassessing of market conditions and according to each individual’s risk tolerance…I recently read “Reminiscences of a Stock Operator” by Lefevre about Jesse Livermore and found it very interesting,how much rang true about market and crowd psychology from a century ago.
The events of the past decade clearly show that following Wall street and most mainstream financial magazines may lead to disaster.
Recall that famous Fortune magazine Oct 23, 2000 issue “Ten Stocks to Last the Decade”, listing Enron, Morgan Stanley Dean Witter and Broadcom which went from $237 to now $29 a share.
I try to follow the recommendations of Safe Money report and lately I’ve been trying to follow some of Larry Edelson’s advice in Real Wealth Report which are bit more aggressive.
Last year on Nov 25, right before Thanksgiving weekend, you sent us an alert titled Breaking news: New dollar collapse this weekend? saying the predictions in your video could start to happen as early as Monday Nov 30th which led me to invest in GLD and some mining stocks at peak prices, then the Dubai fiasco happened on Thanksgiving weekend and Gold dropped.
My mistake was to not buy gold earlier in the year when you started making recommendations and then buying in November at a panic. Now I see the wisdom of following the recommendations as they’re given and only keep about 10% in gold.
The hardest thing to do is controlling my emotions and not following the crowd.
Martin Weiss Reply:
January 22nd, 2010 at 12:13 PM
We’re all human beings, Liz. Just as we were putting out the Thanksgiving weekend alert, the dollar had broken down dramatically, busting through key support levels. Then Dubai hit. As you may know, we’re on top of most domestic financial disasters in the making and even some international ones. But Dubai? We had no clue.
More importantly, the key take-away from your blog post is this: Even more important than the right picks or the right timing is the right AMOUNTS.
• When you overinvest in one particular asset class (in this case, gold), the inevitable errors you — or we — make are likely to be more difficult to recover from. In contrast …
• When you invest reasonable amounts across several different asset classes, those errors should be far easier to recover from, and may even be immediately offset by gains in the other areas.
Even if you don’t agree with — or remember — anything else I’ve blogged here today, never forget this one point: How MUCH to allocate to a particular asset class or investment can do more to determine success or failure than almost any other single factor. — Martin
Q1a Dometic vs Foreign. have a split folio 1/3 Hong Kong, 10% Euro the remainder in cash and US.
Q1b Gold Bullion none, Palladium some (PAL), titanium some (TIE)
Q1c Energy and Natural Resources Some Natural Gas
Q1d Aussie dollar ETF
Q1e None
Q2 Some quantitative, changes by portfolio change in value.
I believe that managers use various ways to decide how best to allocate their resources. They are often restrained by either fund restrictions or the sheer size of the fund they manage as to which companies they may or may not invest in. However having said that and depending on the sector the fund is in, managers are always looking for results while maintaining some level of safety. That will lead them to invest in a percentage of established “safe” companies while the rest may be invested in companies that may have a higher level of risk but offer much more upside at the same time. The percentages invested in each will depend on the restrictions of the fund and the level of risk the fund manager is willing to take (and their reading of where the market is headed).
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Mutual fund managers on the most part have colleagues who evaluate opportunities. Some managers have large staffs and some are “one-man-bands”. Brokers, on the other hand, are mostly into selling stocks and bonds, so they usually react to their management suggestions.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
All of the above. Some are chartists and some are fundamental evaluators. My feeling is that the best seem to sense market trends and their suggestions (recommendations) are usually of positions which are in front of trends. The fundamental evaluators are correct in the long run, but you know what Keynes said about the long run.
Sometimes I dont think its any better than playing the roulette wheel in a casino. Considering that option, I would want to face the least amount of risk with the best odds of winning. That being said, I like good long term stocks that pay dividends, good stocks with value, safety and timing. I also like to diversify and play different sectors, like silver ETFs or other commodities. As far as bonds are concerned and the value of the dollar, and interest rates, these could also play a factor into diversified investing but I need to do more research in this area of cause and effect. Gee Dr. Weiss, maybe you could help me out with that.
The only area that I am comfortable with is the US stock market. I believe strongly that “investment professionals” have only marginal qualifications to construct or manage portfolios. First, I rely on Elliott Wave analysis to guide the direction of my investments. I buy when they say buy and short when they say to. I listen to folks such as yourselves to decide the best place for my money regarding individual currencies (ETF’s) and stocks. When you, or others, conflict with Elliott Wave, I generally sit out in cash. I do not do bonds.
I closed all positions in stocks, bonds, MM funds etc in September 09.
Everything went to cash.
Now I am waiting for gold to collapse to the $700 range to buy.
There is such misinformation from every imaginable source that I find it impossible to trust anyone giving investment advice of any kind at present.
Martin, you & your team have been good for me. Like other fixed income retiree’s, I’ve been really squeamish about getting involved in any investments after 2007-2008. However, I’ve about made up mind that if I don’t take a little chance, I won’t go anywhere. The beginings of a gold/silver coin collection, & a switch to a gold mining mutual fund are due to your team & my son. I read all of the posts, but especially like Toni Sagami. I will need some advice on how to transfer some money from a bank money market to one of the recomendations from him. Everett
I think there are two answers. The Mutual Fund guys obviously have to stay true to their funds characteristic, ie, if they are an emerging growth fund they are looking for growing companies in emerging countries. They couldn’t for instance just put their money in gold or oil or China, India, Brazil. They may have some of it there, but probably not the percentage they should. They have to diversify wildly because of the amount of money they have to invest.
I think the stock market pros that try to get my business are pushing stock their company makes a market in! Now I am happy my old UBS guy made me buy AAPL in the 80’s but he also “made me” buy others that lost me money and haven’t come back as fast and some not at all. They are not very interested in, at least it seems to me, to take the initiative that you guys do to find the segments of the market that will outperform others.
If I thought my broker was was rolling the dice based soley on “gut” instinct, I’d fire him…
I believe with the considerable upheavale in the domestic economy you had better study, study and study somemore. But even that won’t take you all the way. A good broker with years of experience is going to have a “feeling” for the direction an investment might take. But he bases that feeling on technical data, trends, etc. But in the end no one knows exactely what will happen with the market and how hard certain events will push the market up or down.
So in the end, it’s gonna’ have to be a leap of faith.
I tend to be contrarian and love to buy what is out of favor, but right now I am concerned about another dip and not enough time for stocks to come back. So for now I have been following the crowd into energy and metals, but like to get out before the bottom falls out and I am concerned like many others that the other shoe has to drop, but the government keeps trying to prevent that from happening.
I presume they use both Fundamental and Technical analysys. I also suspect many are to influenced by what is happening on the political scene and do not keep their analysis objective.
I have diversified my investment some what equal parts {5} and so far they have worked out well . You can always improve and I keep an open mind to new ideas ! However being a senior you must keep safety of capital in mind at all times . I would recommend to anyone with capital to consider including gold as part of there holdings . Paul
Martin, I have been reading your (and your colleagues) assessments and advice for some time now and have found it very informative. I have acted on it by buying gold ETF and China ETFs. My main problem is that I have so many different retirement accounts, managed accounts, etc. that I don’t have as much control over. I am very seriously considering consolidating my accounts into an online brokerage account that I can control completely. Lynn
I have worked in middle and backoffice roles supporting dealing rooms my whole life and most of the front office guys are just as clueless as the rest of us. They just BS better than the rest and have no qualms taking risks with other people’s money.
The small percentage who do know what they are doing don’t divulge their secrets. Me? I know one thing when it comes to risk mitigation – Gold doesn’t go down long term.
my mind is open
Like many others, I have not set up an allocation map that I intend to follow in 2010 … conditions change and I want to be able to respond to change. I have about 35% in big US Companies (Pharma, industrial, Agric), about 30% in foreign stocks & mutual funds (many of Tony Sagami’s picks); I have ~20% in metals and a small % in “fliers”. The rest is in Cash & money market.
I use a basket of about 500 stocks with abroad sector mix with historical data beginning 2002. I believe that other than historical/emotional perspective all other data is not relevant as use of computers/internet etc./Institutional HFT (High Freq Trading) has caused a time compression between change events and responses for public at large. I use a personaly developed proprietary blackbox autotrading algorithm based on common statistics WMA,BolBands,Japanese Candles(ie Mix of east and West) as well as some lesser know such as Hull MA. I refine my selection based on Volume and Current Market Conditions and then Postion Rank Selections for the day. Though “winning” trades are only 58.89 % with Avg Profit % 4.57 Avg Loss % -2.10 I find that I am profitable with strick sell rules that mitigate the emotional volitility whip caused by institutional HFT , news events etc.
(1) sorry to say politics is the influence. i like australia, canada and brazil in that order.
gold, silver, oil, with a few mlps and canroys as defense.
(2) half of investable cash in gold and silver bullion. fourth in stocks, fourth in cash. also a decent holding in farmland but see that as more permanent.
Martin, I have been an invester in gold since 1993. I have to give you credit,however, when I started reading your website. I have increased considerably in both gold and silver. My problem is I don’t understand stocks, or currencies. I have bought material from your staff, but that was on Social Security stuff and it was not of use to me. I do want to thank you for getting me into gold deeper than I was. Rick Stone
I read your investment observations from the UK….so helpful to establish a view of the ‘big picture’.
Apart from a limited number of stocks held in large international companies I invest by way of widely based international investment trusts. I am too lazy and long in the tooth to do otherwise!! Fortunately they seem to follow your research; but whether they will continue to progress in the future is in the lap of the gods.
Many thanks for all your fascinating insights.
The past 3-yrs. I have had a large amount of IRA money invested with a brokerage firm. I pulled it out last week after relizing that paying the management fees and loosing was no fun. I would need to get really lucky to overcome the losses. They get very defensive when questioned about their methods.
I am out of all investments except the purchase of some Gold & Silver bullion. I have been considering your firm for direction.
Money manager I expect use research and technical analysis either from inhouse or subscribe to a research group.
Do they have a tested/secure way of knowing were the market is going, NO. Much of the research is tainted/slanted on what is hot and what is not, because the search is interpeted by people.
However they do have more resourches and can make decisions on technical factors more that gut feelings.
I will invest in each of the 5 categories in a like amount of 10% of my funds available at the time of investment. Some of the balance of my funds will be used to increase my holdings in the categories that show the best returns.
I invest roughly equal amounts in lots of stocks that I think may double in a year. I use tight sell stops and quickly sell losers and let my winners run. My stocks come from Investors Business Daily and a variety of advisory services. I’m heavy on gold and oil stocks as long as the dollar is losing value.
I think that they are like a bunch of ducklings in a pond who can’t find their mother. Then when Mother appears they all line up in a nice row and follow her lead. That’s how I think Wall Street runs. Someone hears someone say something and that someone is going to buy 10,000 shares and away everyone goes—BUY BUY BUY! There is no means to their logic. It is just a guessing game. Just like playing cards
I believe there isn’t just one answer to that question. Everyone respond to their own “bias”, it could be their knowledge of a specific niche, their believes, their habits, their crooked mind going against their clients, it could be impulse or gut feeling but it also could be they hit the wrong keyboard.
1. replace, non/poor with current research showing possibility
2. based on Fed printing press/gold eagles
3.too complicated. weather/oil pricing/tech.
4.will oil switch to a basket of currency – Euro, natural res……
5.consider vunerability – credit rating
Currently 20% to 30%
I don’t know how Wall Street and Money Markets make their investment decisions. I don’t trust whatever they do. They are the cause of the recession in our economy. I don’t trust anyone any more. Why should I trust you?
Mutual fund managers or brokers have some formula to decide where to invest and
look a trends.
I have stayed out of the Market. I’m uneasy about the market and the nations future and I have never been one to invest when I do not understand the ins and outs of so much of what you advocate. I tried a few of your recommendations and lost money.
I’m following Clause’s recommendations, partially. The market is nobodys friend, way to risky and unstablr right now.
I think it is like a bunch of ducklings on a pond. They are swimming all around because thet can’t see their mother. Mother arrives and everyone starts to follow her in a line. Just like on Wall St. Then allof a sudden someone buys10,000 shares of something and everyone goes crazy BUY BUY BUY! It’s just like playing cards in Reno. It is all a gamble. No one Knowes for sure what they are doing. It’s a guessing game.
Martin, I am a trader, not a buy and hold investor. My opinion is that asset allocation is a risk management problem. Gamblers suffer ruin because they risk too much on any one roll of the dice. The dice go against them and they are out of cash and therefore out of the game. If the amount risked on any one investment is small enough then any one total loss will not end the game. Hence, avoiding gamblers ruin means spreading your assets over many rolls of the dice. For investors that means allocating small amounts over several sectors and economic entities; tech, materials, industrials, financials, health care, energy, consumer staples or discretionary, and also over several sovereign economic entities; the US, Europe, Latin America, Asia. This is diversification.
However, if the dice are fair, a win is as likely as a loss. Therefore you want to load the dice by favoring the sectors and sovereign entities that are strong and growing. Determining which sectors and economic entities are growing requires paying attention to economic indicators; GDP, inflation, popular sentiment and political will, among many others.
The exact amount of cash to be allocated to each investment is determined by how much you can afford to lose without hurting your lifestyle, and your ability to sleep at night knowing your money is “out there”. A rule of thumb would be to determine how much can be lost without impacting your lifestyle, and then spread that over about 20 investments that are spread over at least 5 different growing sectors/entities.
No one can predict the future of any one investment, but with many investments over many growing sectors/entities the odds are skewed in the vigilant investors favor.
Hi Mr Weiss,
well, i think you might be asking the wrong guy here as i am more than “green” to the world of investing. infact i think i might be “turquoise”….. green because im so new and “blue” because im know im missing out on so much opportunity. i started reading your material just over a year ago in order to get some education in this area before i jump in, so to speak. your material and that of your associates has been very helpful.
i will attempt to answer your question from this limted stance then: it is my view that money managers, wall street brokers and the “pros” may be making most of their decisions in a similar way to those who answered your initial question:
- the overwhelming respose was/is a feeling, gut instinc or the subjective over and above the objective and concrete.
- to be fair, i think there is a place for instinc and there was a mix of both, but the subjective far out weighted the objective.
- shouldn’t it be the other way around?
from what i have read and listened to in my short education i can see that “others” who are resposible for financially advising us are careless and greedy while others are deceptive – as we see in the news on a increasing scale. but to make decisions based on blood sugar level or fortune cookie happenstance is outright scarey.
i thank God that not all in the financial world are this way. i intend to hook up with one soon. thanks for pointing me in the right direction here!
DC
Canada
I don’t really know, but I presume they have a bevy of analysts that provide information and then the managers and brokers have various instruments from which to choose. I rely on most of your experts to provide the insite on what to buy, but it is a crap shoot as far as allocation is concerned. I’m pretty much in the “gut feel” camp. There seem to be many good investments available but I don’t have the time or the money to do it the way I would like to. Merrill M (Lewis)
Q. 1 I receive a lot of newsletters and as a result try to use my instincts in deciding what to invest in. Last week I invested in a stock and according to the analyst it was supposed to go to the moon. It went the other way and this morning it is down 50%. Can’t make any money this way. I thought that gold was going to be good to invest in but my gold stocks are just hanging on and even lower than when I first invested.
I try to allocate a certain percentage to the stocks I buy.
About the mutual fund Q. I really think that mutual funds stink and that those who head them are just pulling at straws hoping to hit good stocks. In this market Mutual funds are good investment to steer clear of.
I believe that most money managers have a model developed from past performances and is statistically positive. When the markets fit their model, they do well, if it does’nt fit, they don’t do so well.
Structured portfolios and asset allocation: It has been pushed by Wall Street for years that this is the best and safest way to invest. You had better have a lot of time, because the last couple of decades have’nt been to kind to this type of investing.
Investment Advisors: They are right sometimes and wrong sometimes. Some are better than the others. I take advise from others, but the final investment decision has to be my own
I am not a Wall Street Pro, so I have no personal knowledge concerning their methods for picking investments. I assume this question is setting the table for some further insight developed by the Weiss team. I look forward to what you have to say on this issue.
From what I’ve read age, risk tolerance and amount of ones capital is diversely allocated among bonds and stocks with the biggest percentage going to safer securities (bonds) and less percentage exposure in stocks, diminishing allocation as one invests in more speculative investments. For todays economy I’m not so sure about the safety of bonds taking up the largest percentage of ones investment capital though.
Martin I was probably in transition to Barbados and didn.t answer the first questions, but I will summarize: I invest for div. and growth with 20 stocks in the Financial, Utility, Consumer/Manufacturing, and Resource sectors. Following your views and comparing with some other news letters, I avoided most of the US bank damage, but not GE which I still hold. As a Canadian I shifted from general 25% ea. Fin. Utl. and 15% ea Cons/Mfg Res. balance cash to more utilities and pipelines (48% of portfolio) with 25% Canadian Banks 15% resources (gold stocks and oil and gas) 5% Cons/Mfg. Because my Bank and Utilities portfolio was built over 15 yrs. I enjoy 155 dividends on blue chip holdings. the imbalance between Util. and Bks. came about through elimination of US bks. well in advance of the mess. My strategy going fwd, is to accumulate capital in anticipation of a return to last mkt. lows possibly this summer but most probably the fall. Some of Larry’s advice has been good some less – eg. GLD not as good an investment because US$ drpped faster than the holding grew. BUT Goldcorp an excellent Can. miner put even much vaunted Barrack to shame. Tony’s stuff always seems to miss the mark on timing too early in/too late out. China in particular. Some of your Brazilian picks are doing excellent Vale, PBR, and Cpl Larry’s China picks were great also FXI, and PTR. All positions that I intend to maintain long term and add to as mkt, adjusts and over the next 3-5 yrs. I expect to see things gradually improve, but I believe that there has been a world wide erosion of trust and confidence in the US that may take much more than 3-5 yrs. to repair. As you are well aware perception is extremely important to the market and when the same politicians that allowed the debacle to occur, and the same management of the watchdog agencies are in place the best you can do is cautiously look East and further South. I believe you and the team are on the right track. Tks.
They have a big dart board that they change out whentoo many holes are on one side that indicates to them that they have not hit the target as often as they would like.
And they have opm to lose and get paid to do it.
I have a few hundred shares in acouple dfferent stocks and they pay dividends the broker kept calling like a boken record to sell them off and buy his preferred stuff, who would gain and who would loose? Well I finally pulled away that broker as it was not doing me much good took what I had to Scottrade and looking to your sight and others for insight into which direction to go.
Have left investing to other to long now need to get educated as to the better direction to go and hope Obama and his elite faternal order that is drive the USA into oblivian would just go away.
At present 10%Gold wafers/bars
for the rest , cash, natrual Resources ,ie fertilizer,ores etc.
Canada is now producing one cent coins that are not solid copper they are COPPER PLATED.This leads me to start looking seriuosly at copper miners/smelters . I smell a shortage of this metal that is larger that people realize, so if it can be kept quite there won’t be a run on it!!.
I would like to think the mutual fund managers use some forecasting techniques if only they could be correct all the time! I only wish that I would have invested in the T Rowe Price Asian fund more. I think mutual funds are still the best way to go!
Judging from results in great majority of Mutual Funds, I would say it is only guess. The few that excell in their investment I would say have a very good system that works.
investors and brokers are just as vulnerable to the discloser of information that any company or investment qroup releases to the person or group of investors that they what to invest in the stock, then instict and a feel for what goes on around us has to go into wether or not that it is a good investment. And with a leep of faith for the unknow facters that one can not see or hear, we hope for the best for all.
sincerely,
Carol
I allocate 50% Foreign stocks, 30% small cap, and 20% domestic stocks. I like precious metals like Gld, SWN. Sugar on SGG, short Euro on EUO, and no bond whatsoever.
Its a tough question especially since no matter what assett class you pick there will always be an advisor or expert that doesn’t like it. So then the question becomes who do you trust and listen to who has a really good track record in addition to your own research. Unfortunately, be it a newsletter service, wallstreet advisor or other financial expert each has an interest in your money not your success. I like Benjamin Grahm and a few others for advise and for technical analysis I listen to the only bear out there right now. You picked a top for the Dow in 07 but the advise I recieved from you was to sell everything even in the first few months of 2009. Track records are important.
I invest in stocks on the TSX and dow (OIL ,GOLD, COAL, Silver ,natural gas and some high tec total 70%) corporate bonds 30%.My bonds are giving 9% on average plus realestate (rental property). I have started to buy silver coins now. Every time i sell a stock i try and put some of the profits in corporate bonds. I only will sell a stock if i make 20% or more. I do not invest in ETF’s. I do not believe in mutual funds. My Stratagy is quite simple read wiess email to get a macro and micro take on the economy and then try to invest in solid companies that fit the the profile. ie encana ,teck etc
My approach to investing is much like other aspects of living.
Reading, studying and trying to be as informed as possible. To
understand where we are as a nation, our world view and how
the world views us. There is no shortage of a variety of ideas and thoughtful people such as Richard Maybury. His “US & World Early Warning Report” is daunting. Dr. Stephen Leeb is a
reliable author on the scarcity of precious metals. My investing approach is to keep it simple and don’t outlive my money. Sarah
Although my investing at present is limited to purchasing a few silver coins here and there , I very much enjoy having access to the research and ideas presented by Martin Weiss and Team . Perhaps at some time in the future I’ll be in a better position to expand on the investment instruments that are available . Thank you for your service …
I have focused my investments 30% natural gas/oil, 30% silver/gold, 30% Asia & 10% S.A.
My preference is in the natural gas and silver on the first two.
In Asia and South America, I am selecting mostly stocks, but I do own a ETF for each.
Dr. Weiss,
I would like to believe mutual fund managers invest according to their prospectus guidelines. Assuming you mean those with broad mandates, I think some are bottom up and focus mostly on fundamentals of individual holdings while others doing top down many be more inclined to overweight sectors they believe will out-perform. How far they go out on a limb should also be somewhat knowable by looking at their history and the prospectus.
Wall Street brokers (indeed all brokers) do what they are told and the process is unknowable due to the enormous conflicts of interest of their brokerages. That is why I avoid them.
Pros, defined narrowly as certified financial planners, make client specific decisions based on long-term goals. Their overall asset allocation probably rebalances annually.
My personal allocation to stocks is 40% in large cap (slight value tilt), 20% in small-caps, 20% international, 8% in REITS, 10% in Energy, 2% in Metals/Commodities. This allocation decision has slowly increased international exposure and commodities in the last two years. I am a CFP owner of a small private registered investment advisor firm and all my clients have the same stock allocation, although the percentage of their total portfolio invested in equities varies. Our holdings have recovered unless the client is not making regular investments, freaked out and sold, or has a very high allocation to stocks, e.g. 80%+.
I could go on but it gets boring.
All the best,
Christi Powell
I do not have a method re: %age asset allocation, but follow suggestions given in “Safe Money Report”. Have not been able to buy into all recos, but am following other newsletters too.
It is interesting that most of your responses end up making allocation decisions by instinct or gut feel. I read your newsletters and those of Porter Stansberry and colleagues and then usually agree to stay with the recommendations of the Private Client group at Schwab, and these typically are not very imaginative and are generally long only strategies and do not bring inverse strategies into play, and I continue to be confused. This is one reason my wife and I are coming to the Money Show in Orlando, and we look forward to seeing you and your people there. In these times, we need a strategy for long, but we also need a strategy for short and inverse when things are not going up. I criticize Schwab for a tide strategy of raising all boats or vice versa, but I seem always only to get the long strategy, and we need something better. Ian
Since my account is not as large as I would like, I make my decisions based on what I think will make the most money for me over the longer period of time. Right now I believe that is commodities. Real Wealth Newsletter and its accompanying E-mails have helped me a lot making my decisions.
be a contrarian or be a victim…..
ignore the pundits who have a vested interest in optimism….
I saw all this coming approx. six years ago and decided NOT to trust stocks and keep my assets in property and precious metals. I still see problems coming when china realizes that the U.S gov. is not going to get there/our fiscial house in order at the end of five yrs. which is about three years out All the people in the W. house and Con. Sen. are pushing a Progressive= Communist Agenda. that will wreck our great nation.
Russ
I think they guess and try to get everyone to follow them.
I’m frozen stiff, with 70% in cash and don’t have the balls to do a damn thing. I must be a US Bank???
I’m not sure where they get their infos. I was hoping they read/blog extensively trade journals & web sites like yours; money magazines, monitor what’s happening @ Wall Street; & that they study patterns & trends to make decent decisions & recommendations. Also, I’m thinking that they also consider their past experiences.
Comments pertaining to mutual fund managers….I feel….
Most, NOT all mutual fund managers don’t even own shares of the fund personally or their family. The decisions are swayed by many factors…anaylsts SHOULD do their research, but they also….do what’s best for exposure of the fund performance to the general public to attract investors.
I have invested in mutual funds over the past 20 years….that I choose NOT by advice of any broker. Timing is everything….had over 50% gains and then incurred great losses versus the individual stocks. I do NOT care for mutual funds because of that fact. The normal public should educate themselves on the fees, selling procedures etc…especially from sales pitches of any investment firm. Many funds can not be sold anytime the individual investor wants to.
I prefer ETF’S & individual stocks, I’m very diversified and selective.
I think they guess and try to get us to follow them in their trading.
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
The smart ones physically reasearch a candidate list of companies, poring over their financials and develop a short list of good candidates. Once they have the short list, they physically go to the companies and interview key leaders to make an informed decision. The less than smart ones just use a dart board.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
The tested reliable way for looking at long term growth, viability, earning’s potential, etc. from a company is driven by the fundamentals. Items that are publically available from quarterly financials and annual filings will give a good indication of where to start, but they cannot give a complete picture. Only once you get on the ground and talk to the key leaders can you understand such intangibles as who is actually running an organization (the disinterested founder/inventor or the brought on “management” CEO who does not necessarily fully understand the product or service being sold but is good at managing, or a 3rd possibility of someone who does it all – John Chambers @ Cisco). You can also get a feel for intent. Does the company intend to branch out in a different direction, possibly sending manufacturing offshore (or possibly bring it home), getting into a new product line or ramping up R&D budgets that had languished for years.
Martin,
I think what happens during fund managers decision process is the do either fundamental and or analitical analysis on at least the companies that comprise the bulk of a fund (perhaps all of them) and then looks at trends. But why are some managers better than others if they all do the analysis or at least know who to do that and look at trends…they must finally make an educated guess at a move, and “push that button”. There is no “magic”, however there must be some “what looks good” going on…that is then a guess, since they can’t tell the future!
I read and try to understand what you are saying. However when it comes to understanding Investing, I’m illirate. I lost $ 50,000.00 with TIAA CREF Retail before I could get my money out. So I’m real “Goosey” when it comes to High Resk investments. Just don’t know what I’m doing.
We can only do the best we can with what we have.
The mutual fund managers and pros use historical data, stats and future trends.
They have tested and reliable ways.
#1 Any stock that has a history of profit and is going in the right direction I will consider.
#2 I will commit 10% of my portfolio to each stock selected.
Hi Martin,
I’ve enjoyed your publications for a couple of years now. You’d call my portfolio “contrarian”. It consists of:
25% bullion
7% large mining stocks
30% junior mining stocks
10% tech stocks
18% foreign ETFs
10% commodities.
My allocations are based on reading and research, but nothing scientific about the percentages. I’m convinced that “buy and hold” is not a good strategy in today’s market and I’d rather take some risk rather than to watch bonds lose value due to inflation (which I believe will heat up this year. As for mutual funds I have no faith in them whatever. They don’t even keep up with sector averages and the fees are exorbitant. I believe the managers make decisions based on their commissions.
I try to gather as much expert advice available, and do as much research as possible to determine where to invest. Typically when three of the five or more trusted resources I have give the same advice I generally move in that direction.
To determine how much to invest in each area? Well I am a fairly aggressive investor (or try to be) so I typically try to have the majority of my money (75%) in stocks with the highest, quickest returns. But the direction of the market usually dictates where my money is invested.
I no longer invest with mutual funds. I used to assume they did their homework using tools available that the average investor did not have access to. Their tools failed them in the latest downturn of the market and that was enough to convince me that I could probably do as well on my own with a little help from people like Mr. Weiss and others. Last year I recovered over 100% of my mutual fund losses from the market downturn. I am, however, invested in riskier market instruments but have learned to live with that level of investment.
Hopefully, most money managers use charts, company valuations,
long term moving averages, etc.
However, i think some of them go by herd instinct. If one popular
money manager buys a stock then others follow.
With $300,000 to invest, I am leaning towards:
$100K in Vanguard Total Bond Market Index
$50K in Vanguard Inflation-Protected Securities
$10K in Vanguard Life Strategy Income
$10K in Vanguard Target Retirement Income
$20K in Vanguard Tax-Managed Balanced
$10K in Vanguard Wellesley Income
The remainder in a locaL money market fund.
I am 68 years old
Depending on the type of mutual fund that is run by a money manager I think they use a combination of fundemental and analyitical analysis.
Money managers also have to keep close watch on what is happening throught out the world and narrow down the investments for there mutual funds.
I think fund manager do have tools and experience to use in their day to day picks.
I don’t think they are tuned to todays markets conditions and goverment actions.
John
I don’t believe there is much quessing when it comes to investing.
I believe most investors are convinced by data that is presented them, however, I’m not sure how much guessing is involved in
recommendations received.
Martin :
I first want to say that I am most thankful to you and your untiring devotion to being “HEARD” in this market place . I have followed your work since the mid to late 1990’s….
You are one of my heroes . I asked God in 1994 to bring to me sources of information that I could rely on that were sound ….because at that time I was going to the financial abyss because of lack of adequate desire to do my own due diligence and a continual flow of BAD INFORMATION . Because of God’s goodness and your vigilance and faithfulness…….God SAVED me financially and you helped in ways that still to day are a wonder to me ……
My wife left me in 1998 and cost me quite a bit of capital …..I was prepared because of your
insights to BE SHORT FOR what seemed like and eternity prior to the stockmarket decline of the turn of the century …..Since the dotcom bubble and much info about the 4 riders /5 of the apocolypse …….I have grown a large distaste for the incredible and continuous steps taken by bankers colluding with politicians over the past decade…….The more information that I gleaned from my followings and listenings……..the greater my COMPLETE DISTRUST OF the FINANCIAL INDUSTRY has become ….Again much of this growing awareness and attitude of defense I give credit to you for………There are some things that you do that sometimes have not worked out for me ……..and look like overmarketing of security programs for your followers. I do not fault you for that as this is going to eventually turn into an enablement to your followers. I have developed a TURTLE CRAWL in my approach ……..while taking on a business venture that has kept me away from my computer ( I love the research and time i invest in informing myself but when left to myself without the added structure of my present job /management position in my family small business, I have less time to over DO IT , OVER INVEST, Over speculate…….and or gamble ; finding the appropriate balance is a task relative to overstepping the LINE OF GREED) . Fortunately for me and as a SIMPLETON, I have been very lucky over the last decade to have chosen the most easily managed investment course of my life which was to pile into gold (not etfs and silver) . I have not had to buy or sell or talk to anyone , pay any commissions , or cap gains taxes……At one point when armed with enought info….going back to the late 90’s on my silver….I asked myself the question……….what about diversification…….the answer came back ……….With the four/ five horsemen of the apocolypse riding roughshod over the economy and WITH RECKLESS ABANDON………the safest place for me although undiversified is in THIS ASSET CLASS………..In light of last year’s developments , my position / attitude is VALIDATED to the 10th power.
I don’t know what else to say in this preface other than THANK YOU !!!!!!again and again and again .
Over the past decade , you have assembled together a tremendous team and braintrust and I am also so thankful for them and for their continual contact with me via the internet….
I have lived very modestly over the past decade and with my large family of 5 sons , this has and will continue to allow me to deploy my capital wisely and as I begin to spend more time in research ( as my other duties are less time consuming as a result of the economic cycle we are facing) I am gaining more confidence in my own feel for where the HOT MONEY is moving …
based on little …..
I suspect that over the next few months Gold will find new highs and I expect to take enough off the table to eat up my Capital loss credit with the IRS…..and thereby be able to deploy …
to CHINA…..(picks your team outlined in your recent webinar).
Brazil(etfs) , India(etfs) and currencies…..
I believe , I am going to become more trusting of my own instincts as i use the information at my fingertips….. to SYnthesize Small steps toward diversification that enable more growth without misstep.
Within the past couple of weeks , I have witnessed a couple of trends , one massive movements of money in to Bonds………..and also considerable sums leaving the Canadian currency …..
I believe that the metals and energy are going to be moving up ….over the next 36 months .
but there are months when these areas are silent and trending sideways or correcting …
This is a good time to sell into strength buy puts and deploy the other capital in to other TRENDING MARKETS………
Now back to your question ….
THe mutual fund managers ……..don’t have a vested interest in making my money grow….
Their decisions maybe based on independent due diligence but the percentage of the men and women who are saddled with this responsibility ….do it with less commitment that I do …
The elite who have bonuses on the line ……are few ..and now their bonuses are based on what they are doing offshore…….not with their stockholders money or small clients money performance.
Some of them do their investment by CLUB ROTATION OF COMPANIES….bought and sold .
Some of the reco’s is based on what the MANAGEMENT at these companies orders them to research and TOUT….
IT’s a VERITABLE SNAKEPIT out there …….I told a close friend to BUY GOLD in 2001 and before ….Morgan Stanley is helping her manage her 401k ………her stockbroker asked her why and I gave her many reasons ; he told her (i’m sure ) ” WE ARE THE PROFESSIONALS: don’t listen to your peepsqueek boyfriend”……..She’s down 50% probably more….
It’s very sad to me ………because of my own revelation and where the catalyst of change begins: within…………
I was reading Market Wizards in December 94 after Christmas…..on a specific auto ….
the interviewer asked the trader ” what was it that made you become a great trader” ?
He said that he was looking down into his baby’s crib…….and wanted to make sure that HIS KID NEVER ASKED HIM THE QUESTION of WHY HE WASN”T PREPARED and take proper precautions to make sure that his baby and family were PROTECTED…..
Everyone is responsible for managing and stewarding their own THINGS , ASSETS , MONEY.
Everyone is responsible for DOING THEIR OWN RESEARCH and TAKING PERSONAL RESPONSIBILITY over this FINANCIAL REALM……
Everyone has the same ability to acquire vast sums of info now because of the INTERNET…
IN order to get out of the mess that they are in , now, VAST NUMBERS OF PEOPLE must be encouraged to take back this responsiblity from Wall St and to TAKE BACK their assets under Wall St management and OWN THEIR OWN VERY HOPEFUL and MANAGED HORIZON and DESTINY……….find out where the money flows are moving and park and repark and repark their money inside these TRENDS…………..
You must TEACH the people , young people , married couples, middle aged people and retirees to do this and to take back their lives…..I must also do what I can to also TEACH THEM and therefor be and become a little hope and little part of the SOLUTION ……one person at a time.
My GREATEST REGARDS and ADMIRATION TO YOU and the TEAM,
John Bower
I dont believe Mutual Funds have any special knowledge to employ in diversification. Diversifications purpose is an attempt to minimize overall portfolio losses due to unfavorable changes in portfolio elements due to future unanticipated events. Portfolio segmenting into sectors is used to facilitate aportitioning is one technique to reducing catastopic loss. However the purpose of the portfolio is to maximize gain.
Mutual fund managers probably invest their funds by a combination of observing trends in sectors as well as individual stock movements. They must also take into account news about finances,legal actions, new product or process developments or other pertinent information. Of course the overall economic trends will also dictate the amount of liquidity they may want to have at different times
To determine where to invest I listen to the professionals and look to see who has the best earnings after a sector has been beat up.
I try to keep 20 percent in cash for unexpected buying opportunities.
I worry about UK pound and currently have been buying gold mining shares.
I think the majority of the fund managers truly do have some kind of a personal system for analyzing stocks for their fund. Much like the systems so many people have gambling in Vegas. Some times they are right but more often they are wrong.
I have lost most of what I accumulated over the past 20 years to medical bills and now am just like so many others just trying to survive. There seems to be nothing safe to invest into with this present governmental policy so I would say invest into tooling, raw materials and personal education. Or perhaps sell your soul.
I use mutual funds exclusively. I like to think I have chosen a small “elite” number of managers who have their own money on the line, have an above average long term track record that consistently outperform the index, as well as have a highly consistent record over 5 year periods (using the Fund Counsel Quotient as a framework). Although I have no idea how they make “these all-important desisions” and although not right all of the time, I believe the ones I use are not just “guessing”, but do have a plan. I remember John Templeton stating that he was pleased if he was correct 2/3 of the time.
Hi Martin
I read as many financial publications as I can for information on trends and continue to study trading rather than investing. I think the markets are unstable so never buy mutual funds as I can’t get out of them immediately.
I currently feel the US Brazil UK Indian and Chinese markets are overvalued and today sold my gold and silver etf’s and stocks (though not physical which is my insurance policy)as I anticipate a strong USD rally which will likely push down all assett prices. Once the rally is over I will go back into precious metals and resource stocks which I can hopefully buy at lower levels. I have already converted GBP to CND to buy these stocks. I will only buy India/China when there is a substantial pullback I don’t believe the Chinese numbers. Am currently short Eur/USD and China.I think we will revisit the lows of 2008.
Approx intended allocation
PM stocks 20% with stops
US defence contractors, UK pawnbrokers, liquidation companies 20%
natural resource companies Oil/gas Ag, timber,potash, uranium, rare earths 20%
Emerging markets 20%
cash 20%
The buy and hold guys use about the same methods described above. I have three paid advisors including Larry Edelson and Tony Segami. What they say, I do.
I would like to answer last week’s question. I looked at what I can live on. I do live rather frugally. Then imagine that I could lose my retirement income. Based on that, and guess at a possible inflationary period, I try to cover that amount by using hard assets to equal that.
Of cource I follow your sugested trades without question. For additional trades I go throug the following several hoops as follows:
a) From a signifcent streem of e-mails from woudbe trade helpers, and and other free sources, I skim through to get a general feeling of trend of certain trade areas of interest
b) From that I get a sense of which holdings I should consider to sell, hold or expand, and whether I should look for taking on new holdings in specific areas.
c) For every hold that shows up in b), I then check it’s value history up to present and as many writeups I can redily aquire.
d) From those resiults I make my decisions.
I feel that representatives who handle mutual funds and 401K’s don’t
give out sound advice. I find myself at this stage worrying more and
trying to keep afloat. I feel let down.
I think that mutual fund managers and some brokers rely on past performance to develop models of future performance. I also believe there is some equity or FI analysis (i.e. statement and corporate analysis) going on, and I also think they have access to information that the public may be ignorant of its access to or does not know how to use it effectively. This includes information on risk, portfolio structuring and product selection.
The classic rule of thumb used to be 60/40 (60% domestic stocks, 40% bonds). Now that commodities, currencies, and foreign equities are common and important portfolio elements, my sense is that they all recommend allocations to these asset classes based on their own analysts’ models and recommendations.
I don’t think the professionals on Wall Street have a clue. On average, they seem to be trying to find under valued vehicles (a purely subjective exercise), but where the rubber meets the road, I think they are as clueless as all of the rest of us. I think they spread their investment capital over several hundred investments so that no one decision will torpedo their portfolio. Then I think they hope for the best. After their money is on the table, they go on as many business talk shows as possible and “cheer lead their bets” to the nines. Just my subjective opinion…….but there you have it.
Martin Weiss Reply:
January 22nd, 2010 at 12:18 PM
Yes! One big question, though, remains: Suppose you’ve done a good job choosing the best investments, including reasonable allocations to stocks, gold, commodities, currencies and bonds? What do you do when virtually ALL asset classes are falling in synch, as they did in 2008? Possibly a good subject for my next blog! — Martin
I buy based upon the fundamental analysis, projection of future as well as technical analysis of the charts of the asset.
I believe the fund managers have to follow their label – large cap, small cap, growth, value, whatever. An army of number analysts cull the universe for ‘opportunities’ and presents their recommendations to the ‘committee’ who decides what actions to take.
Frankly Sir I’ve never trusted fund mgrs stock brokers or anyone in the marked,although I’m very new at investing I think its pretty obvious to anyone who’s paying attention that these guys are all short sighted greedy, foolish and self interested. I prefer to reley on my own intellegence and instincts, investing is’nt rocket science,other than educating yourself as to the mechanical info related to how the markets work,specifics of particlar investment vehicles and moving averages and so forth all a person really needs is money,patience and common sense. The markets are generally maniptulated by large investors on the inside,the best a small $ guy can do is ride along or make quick strikes based on watching trends or new technology be it industrial or scientific. It does’nt take a genius to see the writing on the wall,generally the market just wants our money to play with in risky ways,its best to hide in weeds and keep a low profile,of course that strategy is based on my age,if I had started at a younger age I could afford to take a few more risks,at this point I’ve done a very good job protecting my position and not getting burned by what to me where obvious storms coming over the hill, seriously these morons thought giving home loans to anyone with a pulse and a ss# was’nt a very bad idea and whats more amazing is that they all thought that gravy train was’nt going to derail,these were the big bonus best and brightest,it is to laugh,that type of mismanagement does not inspire me with confidence,thanks but no thanks I’ll trust my own judgement.
Dr. Weiss :
I would never just use ‘my instinct’ to place investments. Catagory or individual stock.
I study you and your team of specialists , mostly , along with some other investment reading I do and then try to assess what you have said to essentially establish the sectors and percent in each of those sectors that I buy.
I don’t trust any of the Wall Street gang or other so called investment advisors. I know that I have to be informed with people I do trust and finally rely on my own judgements and research using those tools for my information and investment criteria.
Some Fund managers only invest in stocks that they are covering. They have a list of the companies that meet their criteria.
I do not trust most mutual fund managers with my money. I believe, probably wrongly, that their analyses are too superficial, and that they depend on a consensus of other managers. Anyway I have a cynical belief that they are more interested in their pockets than in mine.
I guess portfolio managers have and use a system.
They really do it but I guess their systems are mainly designed in order not to let the fund diverge much from the corresponding benchmark.
Few of them are willing to run the risk of beating the market since the performance just being equal to the designed benchamrk, its OK for them, for their bosses, for their commissions, and they pretend it will also be good for their clients.
Thank you very much for your insightful information.
I invest in lots of stocks that I think may increase. I use tight sell stops and quickly sell losers and let my winners run. Many of my stocks come from a variety of advisory services. I’m heavy on precious metals as long as the dollar is losing value.
I have no idea as to how to build an optimal portfolio. I am not qualified nor do I have the expertise to even try.
they follow one another.as wellas the flows of money
I think that mutual fund money market managers and street brokers try to read the economic indicators, and they review as much research as they can find on the economc trends and current economic news events. But few get it right, because looking at Mutual fund returns, they are terrible.
It seems to me that Wall Street gurus, money managers and trading pros WITH SUCCESSFUL PERSONAL PORTFOLIOS carefully analyze the market, making sure that the price paid for the investment and the quality of the investment has significant short term gain and/or long-term growth…now that means, based on my insight, this description accounts for a select few…I would like to learn the BASIC formulas for calculating values in each market, one market at a time…and know them like my own thumbprint…to be able to quickly and precisely choose the best buy or sell…
I’m a retiree which probably colors my investment strategy which is
1. Most of my money is in inflation protected securities and short term investment grade bonds.
2. Some money in an energy fund
3. Some money in an emerging market index fund
4. The rest is cash
As a UK resident I have discovered (through past successes!) factor one to keep in mind is the problem of taxation of capital gains should one be successful!
Thus, should one make a large capital gain requiring a large amount of tax to be paid, make sure you have the money to pay that tax on one side.
Do not reinvest it and lose it!
Sort out your tax position first.
So, here I invest in a self select ISA.
I trade a lot in UK stocks.
Recently about 40% energy, 20% mining, 20% diverse others, 20% cash.
Additionally I trade a small amount in the USA, mostly energy.
This may well change, for other sectors may become the place to be.
Long term view: the world is a mess and will always be so.
I am suspicious of gold. As far as I am aware long term it has never done better than housing. So paying off my mortgage is more important than gold.
If I get the feeling the market is likely to crash I can sell off assets fairly quickly and reduce my exposure to capital loss. Not that I am much good at that!
Although a friend said that when Rockefeller was asked how he had ever made so much money he said, ‘I do not know, I always seem to buy too high and sell too low’.
So, perhaps, that is what we should do. Do not be afraid to sell.
Re: How do you know how much of your money to invest in each area?
First, does the stock have a reliable history, for example a well known S&P500 company? If so, study the the financial data and charts and try to buy a minimal unit when the price is low.
Do not throw lots of money at anything.
When the chart says enough is enough, sell.
Well, that is what I should do!
But, lots of other factors have to be taken into account.
Interest rates, short sellers, bank failures, company failures, etc.
Where are stocks going in the future? On average they went nowhere in the last ten years so they probably go nowhere in the next ten!
Best wishes from Phil Bertrand
I’m 71. I have used Financial Advisers, Stock Brokers, etc. to help grow my 401K’s and IRA’s, but never really made any major returns on their advice and still paid their fees and commissions. I finally cashed in my stocks and bought Silver in 1998-1999. I lost nothing in this past stock market crash and silver has steadily gone up. I have added some gold bullion and coins to my portfolio and am not investing in the stock market.
I think Mutual Fund managers, Stock Brokers may say they have a “structured plan” to increase your earnings, but I believe they only promote the investments that they can make the highest fees and commissions on.
I had Wachovia as a broker just before the market last crashed and started courses with Investools. Once I learned how much I was paying a broker to buy and sell lots of $5,000 to $20,000 trades for me, I let them go and began to handle all my own investments. Just after I cashed everything out with Wachovia, and started making my own investment decisions, the market crashed and I saved myself over $250,000. Best move I ever made watching my own money…no one else can can watch it better than yourself.
It has taken me over two years to become educated enough to have a comfort level investing and trading on my own. While I haven’t made a ton of money, I have saved a lot by managing my own money.
I read charts, love candlesticks, and take advise with subscriptions to Real Wealth Management, and just yesterday, subscribed for three months to Resource Windfall Trader. I am very excited to see how Resource Windfall Trader pays off.
I am a very conservative investor and take baby steps with every move, testing the water before jumping in with both feet. Making your own investments and trades is not for the “faint of heart.” I have new respect for good money managers.
1)I invest primarily in high volume futures(Metals, NRG, AGs, Financials) because of liquidity, leverage and the security of segregated funds.
I keep in mind the fundamental trend and use tech analysis to guide entry and exit.
2)Since futures are leveraged, I only need a fraction of assets to use as margin.
The remainder is in banks and hard assets.
My primary concerns are 1) bank+government stability and 2) counterparty risk.
This is why I welcome and admire your efforts to educate and inform.
The majority of my investments are in precious metals or companies specializing on that feild. I genelly don’t invest more than 5-10%at the moment.
I think it’s a combination of things such as studying consumer idexs, historical data, investment trends, along with economic information on main market drivers (like housing and banking). By looking at these elements it seems one my be able to have an accurate and rather relyable system. At least if I had the resources and info they have readily abalible to them, at least that’s how I’d do it.
I think the best have formulated algerithms they run baised on the catigoriez I mentioned above. It seems complex to me at the moment, but as they say information is power. You have the history a d anylisis of investing paterns, it just seems a logical use of that information.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
There is always guessing when it comes to financial markets. That’s why we/they aren’t all in the top 10% of performers. Mutual fund managers use all the tools they have at their disposal, but still make ‘educated’ guess as to where the markets are going.
Clearly, fund managers of every sort use statistical analysis based on recent financial history combined with current events, internal and external risk factors, cashflow and other measures of financial strength as well as future expectations based on internal and external industry factors as their method of investment selections.
I only wish I had the time and resources to apply similar investment tools to improve the strength, growth and mitigate risk within my personal portfolio.
Hi Martin,
I just make sure that I do not exceed 5% for each particular equity. Right now my largest equity group is in international and emerging markets with about 23% each followed by large cap at 12% and mid cap and small cap at 13% and the rest in bond funds. I like to research and invest in international and emerging markets – $10 and below stocks.
I QUIT INVESTING, MY HOLDINGS ARE AT THE BOTTOM. WHEN THE MARKET REALLY GETS STABLE I MAY VENTURE OUT AGAIN.
i have switched from all US ETF’s and stocks to 40 percent foreign ETF’s. Most of the US large cap stock have sales in other countries markets too. My US is large cap stock and ETF’s of 40%, 5% small caps, 10% US energy, 5% US health care. I did this because of the actions of the Federal Government and US corporate mentality. I also realize that the US is a smaller part of the world market going forward. I believe that the US is focusing most help on Large corporations.
Portfolio-builders often, I fear, haven’t any systematic way of constructing a wise one.
I, too, am clueless, and sadly, haven’t enough funds to even consider investing. But if I did have funds sufficient, I would trust Martin Weiss’s information more than most “financial advisers.”
Gut feeling, I suspect. Also, most financial advisors, take the lead from their superiors (or else!) which means very little to us little guys. I also suspect that the top dogs in these financial insteitutes are trying to push items that will make them or their firms the most money. True, they hope this unloading will not wipe out us little fellas.
I think most of the pros employ some formula for distributing $s among various asset classes, Rick Edelman comes to mind. I have no idea how they get these formulas. Can you enlighten me how you’d do it? I’m a subscriber to Safe Money and the Contrarian advisor. RW
Amber Dakar Reply:
January 25th, 2010 at 3:16 PM
Hello Roy,
Thank you for your question. Investopedia.com has written a timeless article entitled “Five Things to Know About Asset Allocation”. This article outlines five points they feel are important when contemplating asset allocation.
Please click here to read the article.
Best,
Amber
Most fund managers follow the crowd. If the markets produce a gain for them, then they are a hero. If the markets drop, then they can say “not my fault, everybody was affected”.
John Clayton
My problem in investing in gold,bonds,stock, ect is that I can not eat them. I will need always to convert them to our devalued $$$ or any other currency (controled by the government) in order to buy groceries. What good it will do for those that hold bonds,stock or gold buillon now in Haiti?????
Brokers will do with their connections like lawyers,doctors,detectives, ect.
Is not what you know but who you know!!!
I enjoy your articles very much.
I invest based on demographic trends with the majority of my funds allocated to younger
fast growing emerging markets. I prefer energy,gold and metals as the foundation of my
portfolio.
Our broker seems to pay attention to history and has a lot more faith in our financial and political system than I have. He suggested tax-free bonds, but since I don’t understand finances well, I did not want to invest what little I have in either state (CA)or US bonds…both seem shakier than the future of a teenage shopaholic with dad’s charge card. He also believes in mutual funds over the long-haul, but we are senior citizens and are afraid since we already lost so much that way. We are interested in numismatics and tried investing a little in Mutual funds based in the Orient and So. Hemisphere, even though they are more volatile. I don’t think we can look to history for a good outlook with this administration. The Progressives are to anti-free market to suit me.
Shooting blind…? Guessing…? How silly…! Yes, they have tried, tested, and proven ways… Since they are working with OPM (other peoples’ money) and not their own, their primary goal is a bonus no matter what it takes…! Their job is simply to sell, sell, sell…
History proves the market will allow you to be lucky if you just happen to break even (discounting inflation). Think you’re investments are doing great…? Hah… the next recession, natural disaster, or government administration will level the playing field so that you get to start over.
Brokers will offer stocks, ETFs, managers bundle products that sound great or funds that seem to have a great mix that are an easy sell.
Brokers and managers are nothing more than overpaid salesmen that have moved-up from selling hybrid cars… They have a special knack for stretching monetary and factual minutia, inflating profit potential, maximizing the greatest number of investors, and minimizing everything concerning risk. They have no other interest than to sell their products…
Seriously now, do you really believe they have a humanitarian interest in seeing others profit…? It is all chance and educated guessing on the part of the investor, and to win, you need to be the better guesser or just plain lucky.
Want a great investment…? Let’s convince Congress to take the Federal Reserve public…!
Will Rogers had the best advice about the stock market. He said,”The way to end up with a fairly small fortune in the stock market was to start out with a fairly large fortune”. He also said, “Buy a stock when it is low, and when it goes up, sell it, if it does’nt go up, don’t buy it”.
Martin, You have done it again!Hitting the nail on the head.I have to agree with alot of the respondents,I go by feel and gut.I know i should have entrance and exit points@ the time of trading or investing.Some core assets are just that core holdings ie gold and silver.My money map reporter newsletter Keith Fitzgerald suggests a 50 40 10 allocation in selectareas and a moving 25%trailing stop.I don’t like the details as crazy as that sounds of having to do anything in my life mechanically or technically.I believe a combination of art and science necessary in investing .More art though.I am also a macro /theme based trader who does not hold alot of positions but rather concentrated positions in well funded low debt and competitive moot around them ie Benjamin Graham/ Buffett approach.So i know i am rambling but thats my story and I am sticking to it.You are doing agreat job with your service Martin,1 thing though ,I believe we all get what we pay for but some of your more elight service need to come down abit Sincerely ,David Casciano P.S. my favorite advisor with Weiss is Larry Edelson ,I think he has that rare combination of fundamental and technical excellence yet keeping it simple!!!!
Martin,
Your question:
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions? Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
# 1 I believe they do make an in-depth review of the companies that they have in their portfolios.
#2 These managers are purchasing several companies which should have the tendency to spread the risk.
#3 I have tried to stay with 3-5 star mutual funds which I believe have a proven performance record.
#4 I have started to purchase some ETF’s based on certain markets.
#5 My portfolio is diversified between foreign & US stocks, Foreign & US Bonds, Gold, Oil & Gas, and some agriculture stocks. I have also purchase several shares of ETF’s that are shorting the S&P 500 and REIT investments.
I hope that answers your questions.
Most of my money is in money markets right now as I await a market correction. I have money in a mutual fund family with money in China Regional, Natural Resources, Precious Metals, Emerging Markets, and Government Securities. I have two annuities, one in an IRA the other in a Roth. They pay a bonus of 10% on any new money plus a one year rate that is better than current CD rates. I have money in an IRA that I use for stocks, mainly commodity related stocks and high dividend stocks. I base my decisions on financial publications
I would hope they’re researching these companies thoroughly. Making sure these companies area financially sound and with minimal risk. Companies that can survive economic trials such as the fall of 2008. I wouldn’t make an investment with a mutual fund without first believing in that company (as we have good banks and bad banks); same principles should apply.
What it truly comes down to is the experience of the fund manager and their ability to make calculated decisions i.e. “GUT”. Not much different than the feelings I have for the Weiss team. The difference is that I can at least get out of specific equities and sectors with little difficulty. I too understand that Weiss team members actually visit many of the companies which they may or may not recommend.
These are reasons I invested in the Weiss team and I hope they truly have their hands on the pulse of our current economic challenges. I’m concerned that we can have another sharp drop in the market “W” shaped recovery and I can’t afford to have money tied up in mutual funds w/o the ability to quickly exit.
Mr. Weiss, do you believe the market will experience another sharp drop in 2010 and how significant? Thank you!
When somebody tips a share, is it some think they want to sell? Looking at the under performance of many mutual funds, gives me the impression their managers delight in buying dogs. As I cant believe they are so incompetant I wonder if its fraud.
I always invest in all of those categories. Using a set % breakdown,each year I adjust all categories up or down. Then each quarter I rebalance & adjust the % breakdown. I read a lot on world economics ,as well as stock trends .
There are as many techniques or combinatons thereof, as there are money managers. Some use technical analysis which is backward looking and depends on history repeating itself. Others use fundamental analysis to buy under-valued stocks and hedge their bets with options, stop losses, and other protective vehicles. Some try to predict general trends and then recommend when to get in and when to get out. Some, like the bigger mutual funds, are limited in what they can do but all depend on the deceit of an efficient markets. And they all make recommendations that are so ambivalent they only prove one thing; “The market goes up and the market goes down”. This means that, like a broken clock, sooner or later every one of them will be correct. They will trumpet when they were right (or, even close) while the number of times they were wrong, DEAD WRONG, will be ignored no matter what they cost people gullible enough to believe them. The only one of value was Ben Graham.
Martin, I try to read alot about the economy and trends from people such as yourself. I look for good companies with strong fundamentals and certain ETF’s. I watch Gold, the dollar, Vix, Dow, and financial stocks like GS to get an idea of the trends/charts. I look for stocks with great stories like AAPL with earnings and major presentation coming next week. I look for money flow and try to find the highest volume calls and puts 6 months out or more. I then use technical analysis on month, week and daily charts and determine if they fit position, core or swing trades. Money management is important so as to not have all your eggs in one basket. When trading options I try to use 10% of what I would use if buying stocks and go out at least 4 months longer than anticipated depending again on style. Sure do appreciate all you do. Thank you!
I cashed in my my stock account early last year and put the money into a money market at my bank at 1.96% interest. No Risk, except not fully insured by FDIC as amount is over what they will insure) I know there are stocks and mutual funds out there that can make me some money but I don’t know enough about how to go about picking the right one to make an investment. I already lost money in the stock market and I can’t afford to make any mistakes on future investments. any suggestions for me.
thanks, Donna Sutton
After a couple years of following your recommendations, I decided to quit trying to decide what, when and how much to buy and I leave that up to you.
I particularly remember one instance back in the nineties when you said to close out one stock and it saved me $20,000.00.
In deciding what investments to make I read numerous paid advisory newsletters covering domestic and foreign stocks, commodities and precious metals as well as various foreign and domestic corporate and government bonds. I further utilize technical analysis and Elliott Wave analysis to determine the various market trends. Additionally I follow public news sources to assist in my evaluations. I never take aposition, however, based upon media news. I attempt to remove as much emotion as possible from my decesions and always use trailing stops on all positions I take as well as profit estimates to determine sell points.
Please read and get back to me………thanks
Hi: I invest in utility stocks and a little in small energy stocks. (egas: pds) I could uses some help.
#1 (1) I receive a # of newsletters and decide where the strength is in stocks as well as reading financial papers; (2) Same applies as in (1); (3) Same as (1) but also gut reaction to company briefs. (4) No bond or currency interests.
#2 Try and allocate money as my gut dictates but try to diversify.
#3 I think that or at least hope that fund managers reseach the company before including in a portfolio. Wall Street brokers I think, after having been a broker, that they sell what lines their pockets.
I decided about 20 years ago that I have just as much chance of making money as most fund managers. I do not like to go along with the crowd. I read a LOT. I subscribe to several financial newsletters and magazines and when the newsletter writers all agree on a stock I check it out. I try to keep abreast of the world news. But, I have to admit, I am very confused at the moment. I keep a large portion of my retirement money in cash which I am concerned will dwindle with inflation. Also, it is very difficult to find someone off of whom to bounce my ideas.
Those questions are easy,Marty.As I learned from many years of reading what the late,lamented Bob Beckman had to say,fund managers follow what each other are doing like sheep ! They are terrified of going out on a limb because if they do that and they get it wrong,they may lose their jobs ! If they follow the crowd and get it wrong,they have a ready-made excuse – well,everyone else was in xxxx too.
The vast majority don’t have a special method for sector allocation.A few clever people like George Soros do know how to spot what is value and what is not -and,if necessary go against the crowd.
I believe most fund managers follow the controls of the company they are working for.
They use information about GDP of countries, sentiment indicators, and history of the kind of fund they are managing. They have got to get money into the fund no matter what other markets are doing but good ones are always looking at the trends and other fundamentals of the worlds markets.
AS A SENIOR CITIZEM, AGE 89, MY PRIMARY INTEREST IS INCOME. THIS LEADS ME TO HIGHER YIELD BONDS AND WELL-GRADED CORPORATES WITH GOOD YIELDS. AT THE MOMENT ON THE SIDELINES.
I have been investing in food fuel and precious metals since 1999. Overthat time I have managed a respectable 15 to 20% compound annual growth rate. I finally got fed up last March and decided to self direct everything in my IRA’s and 401k. I now have recovered all my investment and am working on getting the overall returns up. I was up about 25% last year. I have also moved a few assets to muni bonds as a non taxable play.
Mutual funds are a waste of time. The mangers have no incentive other than to protect their gains for their annual bonus and then the floor falls out. They drop precipiously and then take years to recover. Not an appropriate method of investing for an experienced investor.
I use a mixture of listening to advice from Weiss services and a few others. However, apportioning allocations is all a bit of guess work and gut feeling. I have generally stayed away from Bonds which might or might not be a mistake.
You’ve included a broad range of people in your question. No simple answer fits them all. Some use quantitative techniques. Some look for undiscovered companies. Some specialize in sectors. Etc. Like the rest of us they do the best they can. Each has his/her own approach to making decisions. (I wouldn’t be surprised if some of them read your material as part of their decision making process.) They are also under a great deal of pressure not to do worse than their benchmarks. So that too contributes to their decision making processes.
No, they are not just guessing, they have educated guesses which mean they are blending their knowledge with their feeling when they make a decision.
I plan on investing in energy, comodities and silver on the pull backs. I am in some domestic and foreign stocks.
I like to use percentages of my portfolio to invest in a certain item.
They must research each stock, taking into account thearea if its growing, product needs, management in place and history.
REF : Question on Mutual Funds
——————————–
Dear Dr Weiss,
I think that Mutual fund managers are also like us. They do not have much experience in the turning tides of the market. If they were having the capability to judge MARKETS, then the portfolio of any investor would not have turned -ve. They would have judged the trend and sold of the protfolio. They are also fishing like ordinary blokes in the market and to some extent can show favours to some companies by promoting their stock
Mutual fund mgrs lose money constantly for their clients–they don’t have a clue.
The pros who make money are the big banks like J P Morgan who control the prices
of gold and silver by their market manipulation. All personal opinion.
Martin:
I believe that investment professionals, Wall Street brokers and mutual fund managers usually employ asset allocation frameworks for portfolio structuring with prescribed percentage ranges for each asset class. They tune the actual capital allocation within the range for each of these asset classes to conform to their views of the relative attractiveness and risk/reward of each asset class.
This sounds very systematic but actual execution and management tends to be more herd following or embracing conventional wisdom. Truly creative asset allocation thinking supported by rigorous analysis and portfolio back testing is a rarity amongst the Wall Street broker and mutual fund crowds, with someinvestment professionals and hedge funds positively differentiating their work and value added on this front.
Best Regards,
Brad
I invest in domestic and foreign equities and energy equities at a reasonable amount which I rebalance yearly. I do not feel comfortable with gold and foreign currencies. As for bonds, I’m in a holding pattern.
I avoid Mutual Funds the majority loose money and I have lost too much in them
At present about 55% of capital invested in cash. also I have about 35% of my capital invested in rental real estate earning about 8%.
Because of a european pension I have Euro’s coming in which are advantageaous at present.
When I invest I make sure the company pays a dividend of at least 3% or more.I buy some stock by gut feeling like Apple in small quantities creating basically my own Mutual fund
Hi, this is a PS: to my earlier message, I expect to be double long in the dollar and double short in Gold & Silver at the appropriate time !!!
Thanks for letting me mouth off…
RRH
Martin,
The systems money managers employ are as varied as the number of funds that are out there. Many years ago, I read “The Money Masters” by John Train and was struck by the fact that these successful traders/investors used totally different systems but they made money. The keys to success: belief in their system and money management.
The key is “know thyself” and then find a style/fund/manager that meshes. I’ve seen it demonstrated that you can give someone a system that is successful for one but others will screw it up. Person and style didn’t mesh.
I will only use mutual funds/money managers where I have no choice (401K, pensions etc.) but even then I resent the money they take.
Dr Weiss:
I believe there are a variety of ways that Fund Managers determine where to invest. Some use contacts within the industry, some use mathematical equations and timing charts. Some have an army of assistants to evaluate the trends and political direction of the major industrial countries. I bet that there are some plain old fashion guessing going on too.
Mainly in small stocks and S&P500. But really I don’t have funds to invest now.
Hello Martin – enjoy your teams’ wisdom & experience. As far as question#1: am deciding by
prayer and much study of the market and investment pros plus common sense. Diversification
is a biblical principal in Ecclesiastes 11:2 “give a portion to seven , and also to eight: for thou knowest not what evil shall be upon the earth.” This is Gods’ wisdom and I follow it very closely.
As for question #2: also diversifying with portions into domestic stock mutual funds (20%), foreign currency stock funds (25%), domestic bond mutual funds (10%), foreign bond mutual
funds (20%), gold-silver-precious metals by 3 methods = (15%), energy-nat’l resources-commodities = (10%). Of course tithing 10% first before investing is FIRST!. Thanks
I’m pretty sure that most of them use an asset location based on their internal assumptions of what is going on in the economy and the market place and then are probably better at rebalancing than I am.Noone has a crystal ball and the fact that so many managers differ from eachother most likely is a reflection of their own biases.I am terribly overweighted in the energy field for a number of reasons and need to slowly rebalance.
I did not receive your questionnaire!
To answer your questions(s), There are probably numerous ways: earnings, valuations, stochastics, fundamental vs. technical, etc…. My gut tells me to listen from a ” RELIABLE, DEPENDABLE, STRAIGHT-TALKING, EXPERIE4NCED INDIVIDUAL WITH A PROVEN TRACK RECORD!!!!!!
seat of pants
I suspect most fund managers have a very clear, rigid system in place to make their investment decisions. There must be some regulation that says an institutional type investor needs to have some sort of systematic, repeatable decision-making process in place. Maybe it’s valuation, maybe it’s combination of technical and fundamental analysis, maybe it’s based on high tide…whatever it is, I suspect there must be a “system” in place.
They also go with the herd. If it is said that whatever sector allocation would be preferential at the time, they do just that. Allocate individual shares by their rating. I wonder who does the actual research. I get the impression they all copy each other.
It has been my experience that only a few really have technology or true experience on how to make money. Many just shoot the bull with something that works sometimes. To educate ones self you must continue to learn and examine not only the market but technques. Many times the market is being controlled and manipulated, that must be observed as well.
To answer the question about how mutual fund managers make their asset allocation decisions…a bit of background first. After noticing that my “money managers” (who get paid a hefty fee) “helped” me earn $75k in REALIZED losses in one of my investment accounts by SELLING a bunch of stuff in FEBRUARY and MARCH 2009, I decided that I needed to take a more active role in the managing of our money. To this end, I subscribed to at least 20 newsletters, etc. and read several seminal books on investing. After having done this for about six months now, I have concluded that my “investors” must be pretty clueless, and lazy, for investing only in mutual funds and for selling at the BOTTOM!! So, now knowing much more about what is available “out there” to invest in, about how both fundamental analysis and technical analysis must be done, and about returns that are possible in both up AND down markets, and comparing this information to the returns earned by mutual funds generally in the rough 2008-09 period, I would have to conclude that mutual fund managers must be about as clueless as my investment advisors! Thanks to Weiss Research for assisting in my education through information provided in some of the newsletters in my collection.
I read the W.S.J. daily, read Taipan,and from these sources get a feel for trends in the market. I do not have a systematic approach.
Hi Martin,
My answer to your question: Some MF managers are pretty smart and others don’t have a clue. More or less like the rest of us, I would say. I listen to you and your crew for fundamental advise as is reflected in my portfolio: Gold Mining & Silver ETF’s,about 50%, China,12%, Natural Resources,14%, Misc.,6.7%, and Cash 17.3%. I don’t buy Mutual Funds anymore mainly because I generally don’t agree with the allocation of funds that they employ.
Martin: Greetings! I usually rely on advice from my bank’s securities dept for 2% p.a. However, I am feeling somewhat abandoned again and they have just made a $12,000 error in my end of year RRIF statement and have not yet apologized in writing and have not yet sent me a revised statement. I am in their hands and they discount frequently my suggestions – which may be fine of course. I am still about $20,000 down on my pre-crisis situation. I am one-third in cash right now on my cash account (to take me from age 91-96) and my no-risk Retirement portfolio has ceased to bring in more than about 7%. I did dally with another firm last summer after my big panic in March 09 (but they tried to force my hand and I scarpered!). No one, except you people, seems able to say they saw it coming! idm
I am trying to invest conservatively with a combination of gold investments, agricultural and food stocks followed with foreign srocks. I particularly like Claus’s approach and am following his portfolio program with interest.
I assume the higher echelon investors utilize the many measuring tools and indicators along the same manner on which Claus evaluates the markets continually. What many marketers put out do not appear to be based on the same principals.
Due diligence and gut feeling. Petroleum, silver, real estate. Thinking about self-directed IRA.
I had hoped to do this using buy and sell orders from the Million Dollar Contrarian Portfolio. That has proved quite disappointing thus far. So I try to sift through all the Weiss info I receive with your predictions for 2010 being the strongest factor. Falling dollar, rising interest rates, inflation, rising costs for materials and natural resources, Brazil and select Asian markets will outperform US, etc. Assume US market is short to medium term bull, but watch carefully for a serious bear trend while keeping large cash position. Did I miss some? Due to corrections in some of these trends, January has been blah to date but losses are minor. Will it improve?
I will be averaging in to the precious metals with about 25%. I will average in 5% into
currency, oil & gas stocks foreign & domestic 15%, 20% dividend paying stocks
foreign stocks mostly. I have little faith in the $. 35% treasury only money market.
I ready many sources, study the charts, determine my timing, then act.
What I believe. I invest in very few individual stocks unless it’s clearly a bull market and stocks are universally trending upward. As far as I am concerned individual investors should stay out of individual stocks because: Individual stock investments are generally a zero sum game and investors who do not know the dynamics and up-to-the-minute market circumstances most likely will lose, especially when they are competing against the information gathering capability of hedge funds and big mutual funds. I will take a risk on a very few stocks unless I see promise that I don’t think others have seen. Unfortunately, I lose most of the time. Right now I have more equity money in China telecommunications and etfs and Brazil index etfs. I have one balanced equity mutual fund which I have held onto in the US. I won’t own more because I believe the market is rigged against me and the only people who make money are those who handle other peoples money and rip off the customers with fees. We have a total of approximately 20% of assets in equities.
We have approximately 25% of assets in cash equivalents and treasuries. I am not totally convinced of it’s safety, given our shaky financial system. We only have around 3 to 4% in gold because gold is highly volatile and I believe when it drops one has to move with the speed of light. And I can’t move that fast.
Most of the remainder of our assets are in bond funds made up of mixed investment grade securities.
You asked how I know what mix to have. The answer is simple. I don’t know. I believe there are thousands of investors that were smug in the belief of in their “Knowing”, who lost fortunes. I believe the best insurance is diversity, diversity, diversity.
Since i am a Canadian, i invest most of my money in the Canadian Market,
I never invest more than 20% of my portfolio in one category and max 5% in one
Co.
I invest also in the us market when the canadian $ equals or is close to the u $.
I never invest in gold bullion since i do not understand this market it, feels more
like speculation than investing.
I invest in energy companies, but study closely the stock i invest in and pick only
Comp. whith good dividends and cash positions permitting to keep paying such div.
I do not invest in currencies..this also feels speculation to me .
I have 55% of my portfolio in fixed assets, all in short terms. .
Growing up in the Great Depression, has made me very leary of the Stock Markets and all other investors in our time. I am very aware of what is happening with the Financial situations and was not surprised when the Housing markets, Banking industry, and all the others have had problems. I do remember the hard times people had in the 1929-40’s years, the struggles that some of them had because they put all their “egss in one basket” and were devistated when they lost all they had.
So with all that has happened in the years from really 1950’s until now, it has been just up and down with the financial industry and I don’t trust any of them, I guess I go by my instincts and so far have been very fortunate with my selection of moving my money to different places, althought I am afraid they are no longer safe. Maybe if the world could ever settle down to being just what they are and not try to take over every nations financial system it would come back to a “real” world again.
Looking back it has always been this way when it comes to money and trying to live a normal life, I don’t think any government will ever have the answer for us.
As for the Financial institutions, they just guess like the public does.
I believe their investment decisions are based on company earnings report, current trends, technical analysis and history.
Fund mangers, I believe, utilize fundementals first and technicals somewhat later in their decision making. They get paid a lot of money, but tend to teeter in their decisions due to wanting to keep their jobs and still have their funds look good. Their staffs may produce some rampant info to them since they are playing with OPM. While I have had a mutual fund for many years, I sometimes question some of the companies they have purchased/sold. Still, it has made a great deal of money. I do believe that there are better ways to make profits in the markets, however a mutual fund can be a fairly solid base for an investor if its past and present performance has shown itself beneficial to investors.
True professionals in any field rely not only on finely honed analytical skills that are tied to specific information related to their field of expertise, but also consider the individual goals of the clients they serve, and being human have some biases which are the result of past experience.
Mr. Weiss:
I would put $$$ on usefull Starteg metals. A hole lot on 60% Water,& any corp. that has any thing to do with water. Let become biger as time goes on. Also Rattler Energy.com & Green Ernergy. IBM, Intel,Any thing in maintance of the intersturer. Inda, China. Mining.
Lost my $$$ in Lemon Brothers. HAAAA new name for them. Now have nothing to work with.
I keep you news leters as a log of with is going on. As well as what you think is going to happen, & why you think what that. This is one of few times I get on a blog. As I dislike blogs.
Water Water Water. We will see “BIG WARS” over Water, before I die. I am 62 now.
Oil will be 2nd to Water for investing, then food supplies.
Upper Managers are shaving the maintance to pay for other things not needed. Then coming back asking for bonding or what ever to replace what was not maintaned. At 1500% higher cost than just doing the maintance. Mainting is anything is not done much any more. Intersture is in bad shape. Will come dew all at once. Tread skills have very few working them. Plumers, eletriction, power oprts, linemen, all the way down the list.
Do some resurch on Hoover dams life span. In lest than 5 yrs lake Mead may be bone dry. No water, no power. Check the area of inpaced (ms). If we start now. We will not be able to take up the full slack. In short fecal will hit the fan in more than one place at the same time.
Grid locked.
I would have to say I don’t know. They may pour over statistical data, but when it come to how much to buy and at what price, they are shooting from the hip.
RE: How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Mutual Fund Managers are bound by the policies stipulated in their prospectuses. Unless the fund is chartered as a contra fund they are clueless in a down market.
Non-full service brokers make no such decisions — they just execute trades.
Full service brokers make the decisions in their own best interests — not the clients.
Pros trading clients money — ditto.
Pros trading their own money (and I) rely on multiple sources of info, critically assess the info, have detailed trading plans (including asset allocation), adhere to them, look for an edge, and accept full personal responsibility for their decisions.
Hi Martin,
Firstly thank you and the entire staff for enhacing my knowledge about the economy at home and gloablly. I have learnt so much from reading your emails I feel much more intellgent about many topics.
My opinion : I would like to believe there is a system wall street pros use as all these invetsments are so intertwined there must be a sure way of having a cause and effect to gain desired profits and minimize risks. I agree natural turbulences can interfere with the best system but political and economic conditions must have a predictable rhythm or the foundation of cycles would not have been making these predictions for so many years..
If there is a system I would like to know as after reading all your research I am just wanting to make myself a multi-millionaire as my grandfather said ” one man’s dirt is another man’s gold” and the next two years will be the best time to reap huge profits,so please share with us the way to achieve that goal .. Thank you
It is difficult to know where to put your money and how to allocate funds to keep balanced. I read a lot of newsletters, Barrons, listed to market comments to try and gain knowledge that allows me to make a good decission. Of course I want to make as much money as possible so I sometimes take a higher risk but I do so with smaller amounts of money. The important part is having knowledge about a company financials and understanding them. You have to know what is coming up, new things and opportunities for the company you are considering investing in. This is a lot of work. It is homework. You must educate yourself. I believe that Weiss and Weiss does this work for you and for that reason have placed my trust in learning all I can from their newsletters and online webcasts . In so far as how much to put where. You have to be diversified. I take my funds and split them into 3 parts with 1 part being say 50% comfortably safe, lower risk and the other 2 parts of 25% each split between foreign and domestic that may be a higher risk.
Greetings Martin,
It seems to me that Wall-Street Brokers go by their feelings as well! I base this on their poor track record. As for the local brokerages I would give them even a lower mark.
JP
For me NOT a problem…I have no money to invest so there is no problem..! I am land-rich though and intend to stay that way. I have a small income.. and the ability to make enough with my hands to keep me alive. I love your column though Great entertainment, watching the struggle! Keep up the good work!
Rod
I assume those higher echelon investors utilize as many technical tools that are available today and apply this information to available historical information as much as possible, then make an intelligent decision. Then some of them give the benefit of their evaluation to customers at a price!
I think most of them subscribe to a computer model of some sort. They can input goals and based on computer analysis have some weighted vector. I don’t like this system as it just keeps the pot churned and stocks bought/sold to keep the flow going. In the end, the only one making money is the manager and broker. Unless it is such a bull market that a blind man could make money.
I suspect most of them make decisions based on technical and fundamental analysis for individual stocks. Each firm must has access to an economist who they follow for general macro trends. Each individual advisor or group has his or their own approach to investment success, whether growth, value, etc.
In the current environment, a lot of previous experience is not going to be very helpful. In addition, as you know, Martin, trying to forecast what the Fed will do and the accompanying results, is difficult.
Brokerages etc, make money by causing trades to happen. They put clients into stocks that make them the most commissions.
Unless you have millions you are not provided any meaningful advice…..lessons learned. One can generally do much better doing his own research thus making his own investment decisions.
Martin, 70% bonds and 20%stocks and 10% money market
Martin, I believe their in bed together minus a few rogues and that might not be a fair statement but after watching my own portfolio under their control thats my assumption. I have since took control with your company and affiliates advice and am learning all I can everyday because I don’t trust them. I am sure they research each other to keep the machine going but at the expense of the investor and they still get paid.
Investment people sound good but many do not produce profitable results. So, I pick my own things to buy or sell and then I have no one to blame but myself if I lose money.I have had three different brokers over the years with very modest returns. Because of the paper money problem, I think gold will survive. If the interest rates are raised, more people and businesses will be in bigger trouble so they will have to be low for now.The Investors Business Daily has great editorials and tells you what is really going on in this country.
I have no special way to allocate my investments. I read a lot of financial journal and periodicals to get current information. From this i select stock from the recurring recommendations found in several of these periodicals. I invest an amount with which I feel comfortable.
Financial and mutual fund advisors each have access to various types of information and charts that they feel allows them to make recommendations and structure portfolios with a minimum of risk. The investor, who normally pays for these recommendations, has been stung too many times to rely on them fully.
Last August, we found a company that takes charge of your investing for a fee – investing off shore. Results have been amazing. Will it last? Who knows.
My real belief about this subject is that (1) they get an AWFUL LOT of “insider information” that is never acknnowledged and never made public; (2) they really DO have a lot of uncommon “smarts” that they’ve developed over the years, the older ones who are “dying off” pass them to the “youngsters,” so the dynastyis kept alive, but nobody knows who’s dying and who’s not, or even who’s dead and who’s not; (3) a great deal of it is just dumb (and I do mean dumb) luck; (4) some of them probably have psychic and astrologic “advisers” in the closet next to them. When they poke the sword into the keyhole, they hit something, it goes “Ouch!” or “Ah-h-h-h!” and the respective response influences the day’s activities: Up or Down on any particular buy or sell. I know that sounds silly, but I don’t think it is any sillier than some of the actual methods they use.
Martin – I am seventy five and have never managed my accounts but have two financial planners. When my father died I decided to take the cash inheritance and do my own trading and opened an Etrade account. I read your free reports for about six months and then decided to give you some money when you started Contrarian. I now have three accounts that I am following with you. I also purchased several accounts which I dropped and was refunded. When I am told to do some things and I don’t understand the language I know I am over my head and get out. Sometimes I am unable to act immediately for medical and other reasons so I then follow the stock for a few days and decide whether to ignore the advice or go ahead at that time. I also call Etrade for help in understanding how to move ahead – example: I put in two limited orders for the first time yesterday. For the most part however, I just do what you say to do.
I plan to attend the Florida convention and hope I will have an opportunity to meet you and other staff. I am finding that the “do it yourself” model takes a lot of time but I am happy to be learning how to analyse the advice I get from your staff.
Since I am very active volunteer in Rotary, the oldest service organization, and am coordinating the international grants for this Rotary district (45 clubs), I have been to Asia (but not China) several times and visited projects. I now have a number of very good friends there. The Rotarians in Asia seem to be at the very top financially and are actively helping those at the bottom, living on $2 a day or less. My personal interest is helping women to become equal partners in all areas of their lives. For me, this starts in funding education centers that offer classes for literacy, reproductive health and economic development to enable women to become self supporting if needed. In one Bangladesh village where we are starting such a center, about 50 women thought it was important that they kiss me in gratitude and they did! I am telling you this because at a recent meeting at the Rotary headquarters in Evanston, IL I announced that I would be donating my profits from working with you at the end of five years. So, you can see why you must make sure I do.
In something you published, I read that Tony Sagami was a Rotarian also. I hope someday to meet him. Maybe we can get a commitment from other Rotarians who are also interested in our work in Asia.
More than you wanted right. Barb Maves
I am sure that Mutual fund managers and Wall street brokers have computer systems to enable them to know what to invest in and when.
I have tried some of the systems advertised for a small invester and found them lacking.
I hope you can lead the small invester toward a better allocation of their investments.
I had Wachovia as a broker just before the market last crashed and started courses with Investools. Once I learned how much I was paying a broker to buy and sell lots of $5,000 to $20,000 trades for me, I let them go and began to handle all my own investments. Just after I cashed everything out with Wachovia, and started making my own investment decisions, the market crashed and I saved myself over $250,000. Best move I ever made watching my own money…no one else can watch it better than yourself.
It has taken me over two years to become educated enough to have a comfort level investing and trading on my own. While I haven’t made a ton of money, I have saved a lot by managing my own money.
I read charts, love candlesticks, and take advise with subscriptions to Real Wealth Management, and just yesterday, subscribed for three months to Resource Windfall Trader. I am very excited to see how Resource Windfall Trader pays off.
I am a very conservative investor and take baby steps with every move, testing the water before jumping in with both feet. Making your own investments and trades is not for the “faint of heart.” I have new respect for good money managers.
I believe that most mutual funds use technical analysis to make their decisions. And I believe that individual investors must also use technical analysis. A thorough knowledge of technical analysis is most important. This, combined with the fundamentals will help. But, please, remember that Wall Street is a casino. And you are playing against the house.
Dear Martin,
Clearly fund managers are relying on years of experience, broad research capability, and well developed investment theories as to multiple ways to profit from multiple and ever changing market conditions helping mere earth walkers such as myself to profit and learn. The question was sort of a “push”poll wherein we were directed towards the obviously correct answer.
The fund managers are not shooting blind but may be constrained by company policies from risking capital, so their client accounts may not be building capital as fast as those of competent, intelligent, visionary leaders. I want to be venturesome.
For the next two years I am willing to devote 2 – 4 hours/day and $100,000 learning to manage risk yet to profit handsomely from the market. I’m glad I discovered your organization. I like your team and I am looking forward to learning from you.
I missed last weeks questions but I’ll take the opportunity to try answering them now.
question #1 1. I want to get my money out of the dollar into stocks of countries that are experiencing growth. The more I grow the more money I can then contribute to helping my own neighborhood grow. I want investment strategies that are logical and draw upon an appreciation of many global market influences. At this time I am a neophyte in this kind of knowledge. 2. I have a distinct interest in metals. I have a stake in the small gold dredging operation of a young friend of mine off the coast of Nome, Alaska. Receiving my share of this years “cleanup” was one of this years most satisfying pleasures. I am also keen on lithium because I have a stake in a friend’s electric bike store in Baltimore and batteries are going to rely on more of that metal. 3. I am bullish on natural resources, especially insofar as they resolve environmental problems rather than contribute to them. That said, oil is in a category all its own. 4. I am very interested in learning the carry trade, the predictable ebb and flow of global currencies on global currents. 5. I do not know much about bonds, but I am interested in maximizing my profit potential during the next 2 years. I only need to learn how to invest in a few markets and I have never had a particular interest in bonds. I could be convinced…I don’t know much about bonds.
question #2 Portfolio diversification is obviously a goal. I get excited easily about all the opportunities there are. My current thinking is that if I’m willing to devote hours each day to actively working in and learning about the market, I might just as well invest small amounts in multiple opportunities that I watch carefully. I must admit, I have a wary fascination with penny stocks and might like to diversify with very small holdings in a number of them.
Sincerely,
George Ripley
**************************
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
**********************************************
Last week, I asked you to jump over to my personal blog to answer two, simple questions …
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Question #2: How do you know how much of your money to invest in each area?
Ever since, we’ve been getting great investment insights as our readers weigh in on these two all-important questions. Plus, I’ve also jumped in personally to add my responses and thoughts on the blog. But the answer our readers have posted most often will probably surprise you:
The largest number of our readers decide which asset classes they want to own — and how much money to invest in each — mostly by sheer instinct!
Professional investing is probably done using several tools, some objective, some very subjective and some interpersonal. I suspect that Mutual Fund (MF) investors use tools to “predict” a stock’s future performance and these employ all kinds of statistical screens. The subjective is the ability of the MF investor to use personal experience on the direction of the market sector as well as the individual stock. I’s noticed that my ability to predict grows with the number of years I have been investing. The third is probably the most influential and that is relationships with brokers, fund managers, company personnel and market gurus. The “gut” feeling mentioned by many of your readers is better termed experience within the investing arena.
Good Luck, Martin
I sure enjoy your approach to communication. It rings true to my mind.
Norman Sterchele
I think that the advisers on Wall Street have a plan for the allocation of their funds. However, they are influenced by others too as to what is going to be a good investment.
Perhaps we should all look at Brooksley Born and her statements to Congress and Alan Greenspan in 1996. We were warned of the pending financial derivatives debacle and deregulaton by Brooksley Born highly intelligent woman who was head of the Commodity Futures Trading Commission in 1996. This warning was at least 10 or more years in advance of the financial meltdown. Did anyone listen? Why didn’t Congress and Alan Greenspan protect our economy when they had the accurate information? What do you think will happen in the future even when we have the accurate data to avoid a major financal crisis in this country?
I think money managers have a system or a set of systems. There are many systems and the managers use what they believe is approptiate for their fund’s objectives. Managers differ in what systems work best for them: there is no “one fits all” system for an objective, so a manager’s personality and talents influences his/her investment choices.
From: Dr. Weiss Jan 20, 2010
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
1. Retired in the 90’s put funds into several mutual funds for diversification picked by an advisor. We disagreed on 3 of 5 funds, but took his advice. The ones I wanted did well, his didn’t. Funds went negative but a $40,000 bond kept me on the positive side. Cashed out and went to CD’s
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
1. I’m sure they just don’t throw darts at possibilities and had economic predicting ratios and trends that classified information. Now the flow of information and display is extraordinary with the internet but information must be transformed into intelligence before making a decision. Where the art, mathematics, and experiences diverge is beyond my ken.
I should have had the likes of Weiss research years ago. The people at Weiss Research are top drawer in intellect and integrity in my book. This is my 80th year so as a Great Depression kid my paradigm finds making millions off economic market fluctuations philosophically difficult to comprehend but intellectually very interesting. I use your economic charts for discussion of the state of the union with my Congressman
Bill Mullins
Since you ask for my comment, Martin,
You would normally think and expect the these fund managers make sound investment decisions based on any or all of the above rational commentators. If they don’t make profitable investment decisions, then eventually they would likely be fired and/or the participating investors will invest elsewhere. I personally, at the stage of my retirement age and a small investor (for now), do not invest in mutual funds as my investment interest is not focused on long term. Instead, I’m interested in short term profits like investing in currency options, promising cheap stocks and ETF’s. I try to strive to make at least 15% or more on any of my investments within a couple months and then move on to another investment. And yes, not every investment have been profitable, but then again making over 160% profit helps your moral to stay in the game. “If only we all could have an real accurate crystal ball” ;-).
I just bought 500 lbs. (8000 oz) of silver and other precious meteals, I do own land that I am fixing to sale and move the proceeds into some investments. I was looking into Costa Rica’s grouth.
They use very detailed technical entry and exit points, and long term indicators to represent strategy. My efforts are being frustrated right now by the huge volatility in the market. I have been seriously whipped around by gold (IAG) over recent months and by various recommendations on TBT double short 20 year TBILLs (Street Authority has been very unhelpful on this – unactionable recommendations).
Wall Street structures portfolios to enable them to follow underlying averages. However unless they can go to cash when they need to, or go short, they also follow the negative trends in cases like the past year or so. Many Mutual funds have this problem. I am now unwilling to step into such high levels of volatility, and more likely to move to high dividend, oil groups like PWE which have far less volatility. Even FXA is getting whipped around for me right now. What to do is the question and I am not finding good answers.
I am hesitant to deal in mutual funds. I am sure there are good ones, but too often, I feel trades are made to window dress and not with the investor’s best interest at heart.
Mutual fund managers follow the herd. They do (religiously) diversify there stock selection but give very little thought into what sectors of the economy are doing well and which sectors are doing poorly. I do not think they do enough research or the right kind of research on any one stock they select to buy to be effective.
I believe that the successful Fund managers sincerely do have many systems in place to be able to relatively accurately forcast and adjust to economics and market trends.
To be honest, I have no idea of how most of them ACTUALLY do it. I do know what they say and it usually involves computer models and “proprietary” information. Please inform us as to the reality!
For most of my advice I have a couple of different brokers and I tend to follow their advice.
Technical indictors (such as bogus government figures) that lead them to believe where the economy is going, and charts. If they are investing in stocks, they will research the companies they are investing in.
Dear Martin,
thankyou for this opportunity, firstly with respect to my choice of allocating funds to either equities or resource stocks or other investments. I suscribe to a varity of stock advisors such as your Weiss Group and others. See if there is some common ground and embark on such aquisitions as they may recommend. Together with dealing in bullion both silver and gold and property investsments not just in the UK but in Australia. We have managed to weather the storm so far. The hardest lesson I learnt was not to panic if a stock that should be sound devalued quickly I found that they would likely climb back reasonably quickly given time but they did have to be a viable stock to begin with. i.e. gold over the past 90 days, quite a ride. As for property provided one isnt to heavily geared and position position position is essential that too should wash its face with its rental income. You have asked how do i think professional stock traders choose their stocks? Well frankly whilst there are undoubtably brilliant stock traders for the most part if my life insurance pollicy growth is anything to go by, they do not achive to well either; unless ofcourse they have fully researched the company its liquidity its prowess in the market and its overall viability within the 50-200 day moving averages, but even then in this climate and element of luck seems to matter greatly. Thankyou. Clive
I do not think these great experts do much different to most ordinary investors. They do lots of calculations and read each others ideas and yet only very few fund managers do better than the footsie
So in most cases one might as well make mistakes for free oneself instead of paying some one else to making mistakes for you.
Kindest regards John
I do not have a calculated way of investing in various sectors, the only thing I make certain is that I diversify my investment, otherwise, it is just guessing. As per sectors, I only invest those you mentioned in #s 1,2 and 3.
Given the nature of men and markets, both of which I would say are marked by unpredictability, and both of which are in subjection more to God’s plan than ours, it just depends on the man. A professional (like you are talking about) probably does quite a bit of thinking. He probably studies theories and trends, philosophy and history, psychology and the news. But how he puts it all together is his own individual process.
I’m sure these managers have a method but since most all of them don’t beat the S & P index over say 10 years, then i’m not sure their methods are all that good.
Mutual fund manager use technical charts and analysis, along with macro economic data and gut feel. However, the future is unknown and unknowable.
So while the managers may have lots of experience, they cannot guess where the next 9/11, or earthquake will hit and how this will affect their portfolio.
My concern with mutual funds is the high fees that they charge and most investor do not realize they are dealing with a financial headwind of some 2% compared to an ETF in the same area. In the long run a manager will not consistently beat the market, so you might as well buy the market/index (the market ETF) and concentrate on your asset allocation – where people like Weiss team can help.
For asset allocation, I would recommend a 60% equity / 40% fixed. For the equity portion – a minimum in the US equities – say 10%, 25% in Canada (where I live), 30% in China and EAFE, 10% Brazil, 25% in gold/resource ETFs.
For the 40% fixed – this should ALL be invested outside the US, in Canada, Australia, New Zealand, to get the benefit of the strong currencies and away from the sliding US dollar.
Gerald.
ya i am a long term investor .dont mind to invest whole of my money in investing in shares i aqm investing since 1980 when i am just 19 year old.i had seen a lot of ression,but still alive .lost a lot of my money too whenever i had long in satta market i.e.[future market].i had a problem that i only access in india how u help me .please let me know .waiting for ur reply .thanks for carring me.
I read as much as I can and invest on self presevation and the limited knowledge I can obtain. I believe all financial services are there to make money for themselves and I rarely trust their individual advise. Weiss’s commentaries have made me look at things in ways I haven’t looked before, so am still investigating and preparing for the worst.
Fund Managers, Stock Brokers and Pros all have the bias toward what makes them the most money whether in fees, commissions, trades or returns while using today’s sophisticated technicals easily available them. Investment guess-work would be inappropriate for their clients’ needs or for themselves because reputations and profits are at stake. Main Street investors are becoming more financially educated with higher expectations from but less trust in financial professionals.
Assume most have a system, firm-wide or fund specific. OTOH there seems to be anecdotal evidence that winners are piled into near end-of-quarter window dressing period. Mutual funds, hedgers, trend followers? Imagine as well that “looking good” (for reporting purposes) helps keep portfolio managers in their fancy duds, cars, properties, club memberships, funding kids private schools, fractional jet ownerships etc. Pressure to perform, at least in firms that base hiring, retention and compensation on it.
I believe they have ways to minimize the risk. But there never is any guarantee of results.
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions? Are they just guessing? Shooting blind?
It’s unfortunate that most of my investment money is tied up in my company’s 401k plan that is with Fidelity. There are only about 30 mutual funds to choose from. In regards to individual stocks there are certainly many programs to breakdown trends, history and such. I would assume that mutual fund managers have similar tools to analyze the holdings in their funds but I have no idea.
I use suggestions from Weiss publications.
i think they talk to each other & whoever sounds the strongest they follow,— like sheep going over a cliff. abe cooperman
With reference to your second question issued today 20 Jan 2010, I really have no idea how these people arrive at their investment decisions. I can only assume they use analytical methods of some kind. The Weiss Team appear to have a sensible system though it seems to be split into several compartments for obvious commercial purposes. I am seriously contemplating limiting my investment portfolio (and therefore advisory subscriptions) to specific areas such as precious metals, commodities and energy – especially in today’s circumstances.
Martin,
The methodology used by fund managers varies, but uses an asset allocation model derived from “correlation” of asset classes. In general, that amount allocated to each asset class is dependent on the type of fund , i.e. aggressive, conservative, balanced etc.
This is also depended on the fund being a “top down or bottom up “style manager/ fund.The general economy and which class is in or out of favor is also a big factor.
That is my opinion and I’m sticking to it.
John
mutual fund managers ,most of them , have a short time to try to make money and in return puts a lot of stress on them . They may have a methodology but don t always follow it because of the pressure they have to perform . They know investors will compare their return with other managers and all this together force them to react instead of following their supposedly methodology .
My father was in 2 mutual funds for twenty years. after his death, we discovered that his total profit was 16.00. More than anything, I believe that they just need to invest. They do not really have a plan, or good information.
I am English, retired and live in England. I read a lot of Weiss issues and use them as a broad, general guide to determine what areas to invest in, whilst keeping investments as much as poss in pounds with the exception of gold. I have not paid much attention to % in categories, which I should rectify and look forward to your advice which will be much appreciated as have been winging it. Have less than 25% in gold, and pretty much same amount of cash as investments. Have shares of global water,oil, JP Morgan India, Atlantis China Fund, a Pharma,Utilico emerging markets, Pacific Assets Trust, global diversified mining company and a multinational utility company. Also have quite a lot of indexed linked UK treasury gilts, which make me nervous although I am advised I should be pleased to have them. Any specific advice for those of us in UK would be much appreciated.
I would imagine the professionals use technical indicators, risk analysis, have informed views and structure their portfolios taking into consideration past performances and world wide historic economic situations. Presume they arrive at a balanced % asset allocation by determining which areas will be most/ less productive and safe in the future & dividing it up mathematically to suit. In the past few seem to have got it right and at present there seems to be huge, completely opposite differences of opinion as to what to do and which way things are going to go. Without the gold standard, there doesn’t seem to be too many comprables, although Japan offers some insights. The scale of countries with really serious economic problems that could trigger each other, market sentiment and culminate simultaneously seems unprecedented.
Many thanks for all your work.
I’ve made my money on less than 3 or 4 stocks. Watch them and know what they will do. Had a little Emerson Electric out of the midwest, ticked up 3 points every winter, down in summer. Got into the Baby Bells when they broke up and bought Walmart, (Sam’s Club) in the pinks. If I don’t understand it inside and out, don’t buy, and use stops always. Right now, I was renting but neighborhood going downhill so bought a BK house for a great price. Now, since this is a new ballgame and I seem to have some fear in my gut, I’m out of everything. Just 1.2% interest at Schwab Bank. But I sleep better. Rarely lost anything. Read about 10 of you guys and wait till I feel I can feel 100% sure. But right now that’s not happening. Brazil, India, China, don’t know. In a waiting mode, living cheaply and happy. That’s all that matters.
Through my personal financial adviser I ask for options and the choose funds based on volatility ratings, choosing low volatility, and reasonable gains. This gives me diversification and slow steady growth. As for how the gurus reach their decisions I suspect there is no magic formula but rather experience and personal inate abilities to sift a lot of info much of which is speculation and some down right false. If their track record is good I give them some credence.
I only use mutual funds for a portion of my investments. I use American Funds Group for that portion because of their multiple manager concept, and very long history in the business (from 1939). Those funds are in high yield bond funds, foreign bond funds, and a foreign stock funds. The balance I handle myself because mutual funds broadly fail to react to current trends… they often are locked into an investment sector/strategy, and don’t seem to move quickly when things change. The answer for me is preservation of assets in bad times, with modest activity in market sectors when those markets are trending upward.
Mutual funds managers seem to be hamstrung by the basic definition of their funds. For instance, how many fund managers can react to the current commodity opportunities? Very few unless their fund is advertised as in that specific sector.
Much better to pay a fixed fee to an advisor… where the fee is based on the value of your account. Those people have “chips in the game”.
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions? –
I do not know for sure, but I have always assumed that they have to justify their fees, so they have a bunch of fancy models and MBA’s crunching numbers. Generally, the larger the fund, the more senior the manager, so one presumes he/she can also rely to some extent on experience gained. The presumption is that “they” know more than “we” do, but most of the managers fail pretty consistently to even match the broad indexes, much less exceed them.
Portfolio construction starts with a good view of the “macro” economic situation. Add to this the “position” of the stock market relative to the current situation. Looking back to prior markets, most analysts can determine what part of the economic cycle we are in and what equities do best at that part of the cycle. Next, they view the construction of the S&P 500 and determine which stock sectors to overweight, even weight and underweight.
Analysts build a discounted cash flow model for the equities they follow. As quarterly earnings are made public, they compare them to their model and adjust their “fair value accordingly. Good analysts look everywhere for ancillary information to help them determine what is happening in the economy — retail sales, auto sales, truck and rail car loadings, meetings with company officials as well as customers.
i just follow the advise of your group. havn’t been sorry yet. thank you and your group.
I always assumed Mutual Fund Managers had all kinds of charts and graphs that track the stocks they have in their portfolios. Maybe they do just follow the crowd– or go with the crowd.
I try to have a diversified portfolio of Green Energy stocks, metals, (which I am down in at the moment except for a modest position in Silver, (SLV), Mining natural resources, manufacturing, (mostly vehicles). However a lot of investment in these stocks is gut feel though I do try to maintain some balance.
One thing I don’t have is physical posession of gold or silver or Platinum or Palladium except in jewlery.
There you have it. I have about 25K in cash that I maintain for emergencies if they should come up.
I am worried about the future of our economy. It appears to me that the dollar is going down to worthless and there seems to be no plan to prevent or lessen its effects at all. Do they know something we don’t? It seems as if Wall Street is going along with the attitude that everything is going to straighten out on its own.
There you have it my crazy outlook and what I am doing about it. I really don’t know what to do about preparing for the coming depression. I am afraid that owning gold metal is not going to help much. The government will probably pass a law and seize it all and a law to seize all IRA’s & 401K’s and fold it into the social security system and inflate the dollar to worthless value. Its not a pretty thought.
Martin, do you think we will get out of this mess or is it inevitable that we wind up a 3rd world country with no money thats worth anything and a society that will turn to criminal gangs to get by?
I could go on and on here but will stop at this point.
Regards,
Ronald Thompson
I think they do nothing more than make some reasonably intelligent guesses. They get paid large salaries regardless of their results.
Those of us who work for a living and with only a few thoussand to invest here and there don’t stand a chance. We can only hope for a rising tide that will lift our boats along with the yachts.
I have no idea what I am doing. I have some precious metals, some bullion and some other investments that my brother takes care of because he has a lot of professional training. I have only made $ with the metals. My other porfolio is down due to the last year being a “Cybal” for investors. Really discouraging. If he cannot make the investments work then I sure won’t give it a try. Katherine
The answer is both. Some study, chart, analyze, and consult before making a decision. Some have excellent predictive tools. Many simply guess or follow the crowd.
The last eight years we have been de-leveraging, paying off debt. This saved us from some of the commercial and residential real estate market disasters we have seen others experience as a result of the Fed/Government created real estate bubble. We are invested and investing primarily in income producing real estate. When real estate is not encumbered with too much debt it can be a great investment. As we anticipate amazing monetary and credit inflation in the future we will look for a bottom in the income producing real estate market pricing and perhaps take on a little leverage at that time to increase our portfolio of holdings. We believe that until we see private sector job creation out pacing job destruction we will continue in this deflationary depression. We also believe that our government is currently doing all the wrong things. You don’t spend or borrow yourself out of debt. Our out of control, unlimited Federal government is the greatest wealth destruction organization of all time. It has become organized crime, stealing from the producers to give unearned benefits to Wall Street fat cats and to the growing dependent class. That is a prescription for bankruptcy and tyranny.
I don’t doubt that you and your team of advisers have great knowledge and makes some excellent calls on what to invest in beyond real estate. I relish your thinking.
Wall Street Brokers and Professional Analysts are not in the business to make me money. they are in it to make money for them. I have had account managers call me up to sell me a companies preferred stocks that they obviously wanted to get rid of because the companies went bankrupt within a very short period of time. This left me with a $50000.00 loss and a bad taste in my mouth. I of course removed my entire portfolio from their brokerage house. I never take advice from anyone. I read several different newsletters and buy stocks that I know will provide me with either a good dividend or an opportunity to buck the crowd with stocks I think are essential to life in our society. ie, energy, gold, silver, food etc.
In answer to your question I think that they have the herd instinct and follow one another in as much that if some guy does a hard sell on one particular house and they bite, the rest of them note this and follow suit on an equal percentage basis.
Best regards
Tony Smedley
Dear Sir,Based on your advice and that of other investment advisers is how I invest .As to how much i will invest at any given moment,it depends on how I am thinking at the moment.robert
I have a working knowledge of investments and risk, however I lack the depth of knowledge and experience in all the different market segments that you and your staff possess. I therefore rely mostly on your recommendations for most of my investment decisions. Although I am deversified in a number of different funds and ETF accounts, I am concentrated (75%) in gold and other precious metals, natural res, oil, natural gas and agriculture. The balance: 20% short term treasuries, 5% in foreign growth and income.
First of all mutual fund money managers don’t have much choice. For the most part they are restricted by the fund prospectus(objectives). They just select within these confines. Wall street brokers have not done much better as we have seen their numbers shrink and have never made much money by taking positions. Some have lost big such as Lehman. An individual should manage by objectives and within the level of risk tollerance for their time horizons. Being older and retired I have a high need to avoid risk. In times of the great uncertainity that we are currently facing I believe that current levels of cash reserves should stay way. When the outlook becomes more clear a adiversified approach would be appropriate. These thoughts are from an exprofessional. Before retirement I held a CFA designation and managed in excess of $10 billion for a major money management firm.
I am not sure but I think that I would put:
60% in energy and natural resources and the other
40 % I am not sure.
I am 90+ years old and therefore more interested in security of my assets than in long term investing. It seems to me that my answer is in the precious metals.
I think the experts use their gut just like I do.
I believe they study what is going on. Get advice from a variety of resorces and make the best decision at that point. To be honest, I feel if they really did have all the answers they would be retired from all the money they are making. In any industry there is the top 5% who really know what they are doing and do their due dilligence to profit themselves and their clients to best of their ability. I think it takes alot of time to understand the global Market and most people dont have time for that so we hope our advisors are spending their time wisely. If they are not then you find a new one.
I have read all the responses. Excellent teaching tool. Should have had this in Econ 101in the fifties instead of 9 years of physics!!!!!!!!!!!!
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
How I decide to invest in stocks or gold or whatever is by research on the field. Sure it takes a long time but all my investments are long term. I invest in gold because I have a friend at the Perth Mint and he said to do it. I have been good on doing so. I invested in the Sugar Market SSG because you guys said that it was good. I have been following you for a year now and things are coming to fruition like you said. I won’t invest in any currencies or bonds. To low of a return. Not enough time to follow. All together the way I break down the cast in buying is research, knowledge, and gut feeling.
“I really don’t have a methodology when it comes to asset allocation. I buy one stock or one ETF (Bank, Reit, energy) at times that give a return between 3 % and + in dividends. I have 1 stock in gold and 1 in oil (no dividends).
My stocks are in USA (30 %), Europe (10 %) and Canada (60 %). No bonds.
I do believe some investment advisors want you to invest certain ways because they work for companies that do have stakes in those investments also. I do believe there are investment advisors out there that do examine past market tendancies and react accordingly, but they sure are hard to find.
I believe that brokers and managers use both.Certainly they analyze all aspects of the market to include the usual aspects: earnings, demand for products and services etc. They also must look at a broader range of items such as: national and global financial situation, geopolitical pressures and the intent of national politic (if such can be made). Only after analyzing all of the above and assuredly feeling somewhat befuddled, their gut instincts take over and they make their ( in their minds) sound decisions !
You asked how the money fund managers and the Wall Street brokers and pros make their asset allocation decisions. From my perception, they compare trends of reports and business effecting events and look at the most affected stock sectors, drilling down to industry groups and then sifting among those results for companies that they feel “the market” will like, or not. Just because a company has a good product or profitable business process does not mean that “the market” will be looking at it. So while the fund managers move to the next likely target, the brokers get on the stick and start calling clients. The pros watch the ebb and flow to find their place in, and out.
I have tried to use input from a number of sources to determine how I alot our investments. I read and suscribe to Sean’s and Larry’s newsletters and “ETF Profit Stratagies”. I also read Claus’ postings “5T Wealth” and “Streetwise Gold and Oil” and finally the Contrarian Portfolio Blog (member). Once I’ve read these I try to arrive at a weighted consensus regarding which market, sector and specific etfs or stocks to invest in and which direction the market is headed with only a slight view to hedging or balance and my emotions. I’m not a very sophisticated investor so options etc and anything too leveraged are not on my radar. Since March I’ve been able to keep slightly ahead of negative territory and still believe strongly that we will see a major downturn sometime in the not to distant future. The majority consensus from the above sources and their technical data support this so most of our resources other than our experimental venture into the Contrarian Portfolio are still in a Treasury account in short term notes or spread out over 5 star ranked banks.
Still bidding my time,
Patrick
I only invest my 401k Amounts. But I use charts with 10 and 20 day moving averages. I find that the 10 day gives me a heads up when prices crosses it and when the 20 day is crossed I pull the trigger, both on a buy and sell. It works really well for me. It’s simple and works consistently. I’m retired and this works so well that people have asked me to notify then when I’m making my moves. Made 7.5% in 2008 and close to 25% in 2009, conservatively.
Financial managers use research to weed out the obvious losers, then probably take an educated guess from what is left. All this is assuming that the manager is not pushing something for their company.
My broker is still following the buy and hold mantra. I am ready to cut him loose. He tells me, “see I told you not to panic and just hold on, the market came back.” That type of thinking just doesn’t cut it anymore for me.
Here is a great quote I came across:
“When it comes to investing, hope is not a strategy” Dr. Stephen Leeb
I read as much as possible. I still do not trust my self to invest and make any money. One day I read that ‘the stock market will crash’…’the dollar will be worth nothing’…that we are going to a global currency…then I read that there is a fortune to be made…so where to begin? Some of the information sells FEAR…to ACT NOW OR ELSE…BUT THE MAIN INCENTIVE NEEDS TO BE BASED UPON SOUND INFORMATION. Thanks for any sound advice. Need to start with a small amount of money to TEST THE WATERS…Again, thanks.
Well…I decided to look at physical bullion in 2008 (after reading one of ’Money & Markets’ articles and others like it in 2008) I have since then been selling my real estate portfolio as to reduce my debt load. The cash proceeds have been converted over to Physical Bullion. I have also invested in the following: Commodities, Natural Resources, Gold & Silver miners, Rare Earth Miners/explorers. And finally, I accidentally opened up a bullion business in the process selling precious metals along with providing information on Global Economic News. This was done because I was overwhelmed by the number of people asking me where they could buy precious metals and how did I know why buying precious metals was ‘the right way to invest in the current economic climate’.This all start with ‘Money & Markets’. Thank you Martin & Co.
My portfolio consists of Physical Bullion at 60% (Gold, Silver, Platinum & Palladium).
Stocks in Resource & Commodities and Precious Metals Miners at 10%.
Real Estate holdings are at 30% though I’ve been aggressively selling and would only like to hold about 10% in real estate.
Other things I have done is to convert approximately $20,000 into different currencies. This is a hedge against the U.S dollar and UK sterling. They continue to devalue and will continue to do so long term. Apart from that, there are several other areas and sectors of great interest, namely, Biotech, Green Energy, and Rare Earth Metals. These are all sectors that will have a strong bull run for many years to come.
Thank you and best regards!
Hi I do not invest my hard earn money only in England.I buy bonds in blue chip companies with Isas in that way you dont lose your money on long term and I dont care what happens to the stock market? have a nice day.
d
For the money that I decide to invest, I take my age (42) and decide that 42% will go into moderate risk investments. I have usually tried to diversify with mutual funds, but have never made any money with this diversified, buy and hold approach. I have always broken even! Therefore, I’m considering picking a handful of stocks that seem like winners rather than. By the way, the remaining 58% of my investments I put in conservative vehicles, such as CDs or bonds.
The money that I decide to invest depends on my current level of security. I am currently unemployed but have a nice savings cushion. I might decide to invest a fifth of this cushion, divvying it up according to the method described above.
1-20-10
Professonal fund managers and brokers have a plethora of tools and staff available to them. They use research, on site investigation of companies, discussion with colleagues and fellow staff members on trends, current conditions, and future direction of the markets.
But ultimately it becomes necessary for them to take all of that information, discussion, investigation, and decide which investments they will choose for their clients. It comes down to the human element, after all. Consistently making the right call on the right investment at the right time, I guess is how I would express it.
Serious mutual funds take serious advice from credit ratning instutions,like standard and poor,
to see the market growth and profit potiential, to see what investment to keep in the portfolio
and which investments to get rid of immediately,to poor investment potiential. it serves no
purpose to keep in the portfolio any more.Hope you are enjoyed with the answer.
have a great day in the sun shine state FL, best of regards,Kristina Martinsson
I review information from FT daily, I email Jim Rogers occasionally, The Weiss Issues daily, EuroPac.Net daily, AIER weekly, Money Map weekly, Alpha Reports weekly and Simon Black & Casey Reports daily. I jump around in The Economist, Morningstar, Market Watch and Forbes periodically. After all is said and done I trend the FT economic daily maps and decided to decide or pass. Most decisions seem to profit as expected and a few don’t. I believe this is a better working arrangement than the blah-blah speaking heads in the main stream media.
I am all into gold , physical metal and gold backed IRA . Completely out of the market , which is manipulated with HFT platforms . If one is part of Goldmann-Sachs , or Govt-Sachs , I guess one knows what the market will do , because they are the ones propping it up and manipulating it . Don’t believe in diversification . Jim Rodgers thinks diversification is bunk , and he has done pretty well for himself. Hang on for the currency collapse and financial worldwide armageddon . With the currency devaluation , after paying capitol gains taxes , one has to make a killing in the market to break even . Why take the risk ?
I think most fund managers have their own system which saves them time and is probably a bit self protecting. I am not confident enough to invest much ( and do not have a lot to invest , being retired) but I try to make a rational decision fater getting as much relevant information as I can. But at the end of the day it is often not clear. Hence so many investors talk about feelings
I think they wait,to see what the trend is then jump on it,tried and tested i do not think so, regards John.
Hi Martin, good questions, as a Financial planner, I see my role as not of a money manager but more of managing people. I am not the one picking the stocks in a portfolio as per the money manager’s job. Rather I diversify a portfolio based on my clients level of risk tolerance and time frame for retirement income.
Even though I do invest money for them with my advice of research of investment firms , money managers, and past history performance. I understand that at every point in time one sector is going to outperform another. Either materials, financials,industrials,gold, real estate,China, US, Canada, Brasil, Europe, or emerging markets.
By diversifying an investment portfolio with different money managers and different mutual fund investment firms, hopefully it will provide for a sound wealth building program.
How much of each depends on the risk tolerance of the client and the mandate of the
individual fund.
I do not have a systematic way of monitoring every day to seek the overweighting or underweight of sectors or foreign investment firms. There are systems that allow for a daily re-balancing to keep the mandates and risk tolerance.
Can you report or comment on your Million Dollar portfolio and results from the onset ?? Has this portfolio been active or passive with your stock or ETF picks??
1. D & F stocks 15% 2. Gold/PM/PM stocks 15% 3. Energy/NR 10% 4. For curr 2% 5. bonds 13% 6. Real estate (all paid for) 25% 7. Cash/eqv 20%. This is my current mix and do not forsee a lot of change since I’m in the retirement mode and spending a lot on travel while I am phycially able to.
I try to stay away from US stocks,as I am sure the stock market is due for a big crash,and I am not so sure that China,gold,and other commodities are not in for a big crash also.
Hi Martin, I am very skeptical about funds. My gut feeling is that the fund managers are really more interested in their profits than in mine.
I have invested in stocks over the past 15 to 20 years mostly trial and error and either losing or breaking even.
I have made some really good profits on stocks from the companies my wife or I worked for and then it was basically a gut feeling and placing a lot of money at risk.
Now I am invested in, what I call my test portfolio, all junior gold and silver mining stocks and one mature gold stock. This portfolio is up around 115% and I am planning to buy more shares on the dips.
Tore
I believe they take full advantage of
A) A large staff of qualified analysts who constantly follow trends and money flow, and
B) Access to key money movers who are usually ahead of the curve.
The individual investor has neither the necessary connections, expertise or time.
I read a lot then use technical analysis to trade in ETFs using only a small amount of my portfolio.
I’ve been a collector most of my life so using that knowledge and especially after the stock mkt went south I continued to be more seclective in what I bought.My age is a factor in how much I well need to live out the rest of it with enough to be comfortable.Using the information you have given me has helped to maybe spread out my investments from what I have done in the past.However at this time I feel good about how I have used my assets to live the way I want to.Your information has been helpful and given me a broader vision of what I can do to protect what I have.One problem that still bothers me is the DOLLAR and how to best use it to my best interests.
Most Mutual Managers are required to invest in a particular asset box and to put most of their fund inflows to work leaving enough cash to handle outflows and their fees. In that case the crucial questions of how much in stocks vs. bonds vs. cash is left to the investor. And also in that case it is very difficult for them to consistently outperform the corresponding index.
Hi Martin:
I no longer have faith in Mutual Funds; my opinion is that mutual funds have had their day, and the Fund Managers that ‘run’ them, concerned only with their commissions. I am not in Mutual Funds.
With the unknowing in today’s markets, I invest in 8 +/- stocks at not more than 2% of my available investment funds
agricultural producing land, dividend stocks, industrial bonds, tips, gold, silver, speculative commodities, bank cd, cash, also own a business. The best investment of all over 40 years of investing is agricultural land, but must be highly productive. I always look for an investment that is not in favor with the public.
I believe there is no sure way allocate investments. I have put 50% in precious metals and the rest in conservative stocks over seas. No bonds of any kind!
Thanks
Don Gonser
I feel fund managers, brokers and other investment types use charts, and data info to make selections on what to buy for funds but on individual basis they go into the product deeper. I do think there is a sheep syndrome where the market follows itself to slaughter. So typical in the dotcom era where everyone said stay in it, tech is where you should be. It will be back. Check the prices of some of the biggest movers of the day, Oracle, Intel, and tell me what they are worth today.
My only issue is, and I told my portfolio manager this, is that in todays economy he has to think out of the box. It’s his money he’s dealing with and he has to quite following the crowd.
Emerging markets did fairly well in 2009 for me, but it was just luck. Even though I try to read investment advice from conservative to wild-eyed pundits, I have no idea how wall streeters invest. I’m sure their methodologies are better than mine. I try to look at the global macroeconomic picture and then figure out what to do, or not to do. I’m afraid my investment decisions are just WAGs (wild a– guesses). That’s why I try not to invest too much into any one thing, and I cannot afford pricey investment brokers.
The professionals use the market fundamental tools and security analysis tools to make educated guesses. Problem is that very few of them ever beat the standard index funds and they all charge much more for their “expertise”
Right now I am defensive with only a total of 25% at risk. I’m in gold, commodities and canadian index fund.
Mutual Fund managers and “pros” put window dressings on the funds, then bait the investors into buying. There are no reliable charts, barometers or gurus that can predict a fund’s performance, but enhancements are used to entice the unsuspecting investor. The bottom line is to make money off of greed and ignorance.
I do not understand ETF’s but wiish I did. Are government I bonds – Inflation bonds, a good investment. Why does the fed limit sales to individuals to $5,000?
Amber Dakar Reply:
January 25th, 2010 at 4:01 PM
Hello William,
According to TreasuryDirect.gov:
“Effective January 1, 2008, the annual (calendar year) purchase limit applying to Series EE and Series I savings bonds is $5,000, issue price, for each series. The limit is applied per Social Security Number (SSN) or Taxpayer Identification Number (TIN). Individuals or entities may purchase up to $5,000 worth of each series in paper form. In addition, individuals can buy up to the same amount of each series in TreasuryDirect online accounts in electronic form, or a total of $20,000 (issue price) in single ownership form per calendar year.”
“The purpose of the savings bonds program is to provide individuals with a way to save or invest relatively small amounts of money in non-marketable Treasury securities. Individuals with saving or investment needs in excess of the savings bond purchase limit who desire the safety and stability of Treasury securities may purchase marketable Treasury securities (bills, notes, bonds and inflation-protected TIPS), which are currently available through TreasuryDirect (and from securities dealers and brokers) in $100 increments. Because there are significant differences in the ways non-marketable and marketable securities earn interest, are purchased and redeemed, etc., savers and investors should carefully compare the terms of the securities, and their personal investment needs, prior to purchase.”
To access TreasuryDirect.gov’s full FAQ page please click here.
For more information about Series I Savings Bonds please
click here.
Best,
Amber
Over the last 60 -90 days I have made the decision to, and have acted upon acquiring significant positions in precious metals and in emerging markets. I have done so in the form of ETF’s : GLD, SLV, FXI, EWZ, and IFN. Have experienced more volatility during this period of time that I anticipated, however feel confident in these positions at this time, in spite of today’s decline ( 1/20/10 ).
I think they use various systems, however, I do not think that many are relevant to the economic situation we face today.
I use a Money Manager but like to keep informed on investments they are making and discuss changes
I presume fund managers identify different risk profiles for clients and use tools such as beta-type risk analysis, charts, macumba and ‘their’ perception of future economic environment to build composites that fulfill those risk profiles.
Then they roll the dice.
I’m still waiting for the other shoe to drop so I can finally make some money with my Million Dollar Portfolio subscription.
The Pros use an analysis system to give them what they think will be the best earning investment for their money allocated
I would hope that as professional they use computer models and research to make decisions. I make mine on a combo of computer research (the financials) blog/newsletter comments, and personal “gut” feel I like to get advice from people who have actually visited the company or their exec – paid managers should at least be doing the same but then again I only have limited money in funds (IRA mostly) the rest is DIY – I trust myself more than anyone in life
BTW I assume this is headed in the direction of Weiss research is the way to go :-))
MARTIN—-I TRY TO DO IT IN SECTORS OF MY CHOICE AND NOT ANY ONE ELSE. BIG CAP PHARMA, U S, EUROP. JAP CHINA AND SWISS TOO. 2. BIG OIL BOTH US, CHINA, BRAZIL, CANADA,AND PETEO EXPLORATION LIKE APA, APC ETC.. 4 PERSONAL NEEDS LIKE PG AND CL, VARIOUS BEVERAGES -SODAS AND BEERS. FOODS. POWER GENERATORS AND WITE AND PIPE TRANSMISSIONS. SELECTED RETAIL BOTH IN HOUSE AND ON LINE. AUTO PARTS, DATA TECHNOLOGY,SOME GOLD LIKE GG, AND BIDU IS NEW FOR ME. COMPUTERS AND PERIPHERALS, HEALTH IN GENERAL, AND NATURAL GAS. I HOLD MORE THAT ONE OF EACH SECTOR–LIKE ALL MAJOR BIG PETRO.I ALSO DO TWO BANKS AND GE AND UTX ETC. I REAT AND LOOK AND LESTER AND MY WAY WORKS. MOST OF THE ADVISORY SERVICES I USE TELL ME WHEN I SHOULD GET OUT
My assumption has always been that mutual fund managers and professional brokers make their predictions and build portfolios based on a mixture of myriad hard analytical and forecast data that have at their diposal, and their experience and history with market factors.
I think that most of them have some kind of inside info whether it be in the private sector or the government. Also there is some amount of info that may determine what they choose as in weather, seasons, natural disaster, some form of military action somewhere, etc. So basically thats what I think.
I have a very poor view of investment advisors these days. My Broker has run my life savings at the turn of the century to currently 40% of their value. I am convinced that these professionals work for a brokerage firm that lists the assets that put the brokerage firm in the best position to maximize their position on assets and direct their sales force (their brokers) to include these investments in their client’s portfolios. There is little, if any, consideration of the profitability of the client in these decisions.
I wish I had answered the other questions in your Blog. Based on what I have concluded, I know there must be a way to deduce how to buy stuff on your own to protect for the future. I am about to come by a large lump sum (approx imately equal to what my current investments equal) to invest. i intend to follow the advice I am receiving from Uncommon Wisdom because I read the “book” and I believe the advice based upon business cycles will be some of the best advice I can follow. I intend to invest 30% in Gold and Silver, 45 – 50% in foreign markets and the rest in “chosen favorites” of my choosing. Thus, Mr Weiss, your advice will be directing 75% oof my investments and 25% will be my best guess on holdings. If I beat my Broker over the next year, he will lose control of a lot of my investments and I shall self-direct those as well as the lump sum I am receiving. I am 62 and still risking most of my portfolio in the markets. I must be crazy. The reason for the high (30% as opposed to your recommended 6%) investment in precious metals is I believe Bernacke and this government administration intend to dilute the dollar. Ownership of precious metals is a giant hedge against inflation. You all have demonstrated to me that this will continue, so this makes sense to me.
Last, sir I wish I had the availability of the high cost of entry to receive all your products for free after the one time payment to you. I refinanced my house last fall and paid the closing costs to continue on my liquidation of debt and did not have the resources availability at the end of the year to pay the normal end of year house taxes and insurance, the closing costs and your investment opportunity. I do not use credit cards for long term debt so I was not in a position to accept your offer. I shall pay for that decision for the rest of my life.
I don’t care how they decide on what they do, I don’t listen to them. If I did I would be broke too, or making 3% annual return. I am fully capable of making my own analysis and decisions; but I do read everything I can from analysts and once in a while see a real nugget worthy of further research and examination. Enjoy Money and Markets.
I think most of them follow the crowd. If everyone is wrong about the market, too bad. The government will bail them out. But if they set their own course and are wrong, they will probably be looking for a new job.
We do not have a sophisticated system, we read, make a decision and then work with whatever funds we have available to invest. No percentages involved although we try to ensure we are not overweight in any one sector of the market.
Thank you for the opportunity.
I remember hearing Louis Rutheimer on Sunday evenings saying that we pay money managers to under-perform the market. I remember reading that Mighty Magillian fund was losing billions as people left the fund because of under-preformance. I can “Google” Bill Miller and I find out that of all the account managers there was only one that consistantly was able to beat the S & P 500 performance until 2006.
No, I have no confidence in fund managers. Thanks….John Bernard
Years ago, Martin and his father had an investors meeting that I attended. At the time, I was looking at taking (for me) a large position in FPL because of the relatively large dividend that it was paying. The Weiss team tracked several industries; utilities were one of these. They explained the div. distribution formula of utilities and said that FPL would ABSOLUTELY cut the dividend due to the current div vs. earnings. Well, I did not buy FPL and the very next week, the company cut he dividend and the stock fell out of bed!
These guys have had a clear vision of what is really happening. I no longer use a money manager for my Schwab accounts. I follow what these guys tell me. I went to the side lines in early 2008 and missed the last big down turn and jumped back into my holdings last July( preferreds,energy, natural resources, royalty trusts ect.)-pretty much what Martin’s team is backing. Works real good for me!
Good morning Martin,
I have very little faith in Mutual Fund Mgrs or Brokers, they give me no comfort.
I joined your services because I have a gut feeling that your team is working in
my best interest while having the best research info available and preparing me
for the financial challenges ahead. Your webinar forums are very informative
as well. Larry’s ” recommendations in 21st Century Trader have been good to me.
My trading experience is limited as is my investment capital. What I would appreciate
is more “hand holding”, what to purchase, when to buy and sell.
Kindest regards,
Candace
Dear Martin: I have been studing your information you have been sending me for over a year now and I must say I am very impressed. I feel very comfortable with the thoughtful analysis that you and your staff put out and would have no trouble having you over see a very large investment. I would trust your advice to alocate the funds in the most optimum way. With the way our government is being run I am very fearful that if I don’t do something soon I will loose alot of value and be left with very little. I want to protect and grow this investment as well as achieve a portion for income.
I think they are flying blind, I think they think they are making educated guesses, but I truley believe they are making these educated guesses from faulty information and statistics from the past.
We have been living in a bubble for so long, very few have a sense of reality. They were trained during this time and will want to remain in that “warm and fuzzy” bubble or as Courtney Love would say “Inutero”, and I say it may require a Ceasarean Section to get us some fresh air and save our selves and our country.
In addition to the positions I have as indicated in my blog above, I feel many factors with regards to the near/moderate term outlook of our economy, dictates that investing in domestic commodities would likely prove to be a very prudent investments. My problem is that I do not know what securities to invest in. Looking for advice from experienced investor/trader in the commodities sector. Appreciate Response……………………………
Dr Weiss; I personally keep @ 35% cash/liquid assets; 30% in equities (financials,
commodities, tech, and energy) 25% in mutual funds/Preferred Stock, 10% in gold
(coin, and ETF’s). Any investment is held @ 3%, added to if a winner, dumped as a
loser/stop loss. How mutual fund mgrs and large money mgrs invest I don’t know. I
suspect their ‘teams’ are using high powered computer programs, and in the sectors
they feel most comfortable – place their bets. Lots of professional talk, not a lot of
common sense and much herding/being herded.
I had most of my money in mutal funds.They trippled my money in three years wow,then in 08 lost 1/3,then another 10%and also found out he was doubble dipping me on the take.I move to a annuity which is safer,but as I read from the best they suck too.I bought 10K in gold and 5K in silver,for what it is.I trieded commidies,that was a loss,I
took 10k to play the market to get started.Got some good tips,got some bad one’s.If this Administration is trashing the dollar,I would think,take all your money and buy gold?Everyone had a differend idea differen way,and claim after a crash,that’s not where they had their money.I made money in china,but as I read some say china is a bubble,big building,shopping mals empty gost towns.Who knows for sure?Is it a fake ecomomy?The fiscal fiasco must stop now,and get some accountabiality.
Hi Martin,
I just want to tell you how much I enjoy reading your issues. I’m new to the investment world and there is much I don’t yet comprehend. If I have a decision to make I follow my dads philosophy. I frame the question, acknowledge not knowing and sleep on it. Works more often than not. The answer is always so tantalizingly close outside my reach.
I get how the markets are bracketed by fear and greed, but nobody has mentioned how they are driven by pure laziness. That should answer any question about how managers make their picks. That plus following the current party line.
I also want to congratulate your choice of Claus for your own adviser. I don’t think you could have possibly made a better choice.
I don’t have a portfolio that can be divided yet. My first buy will be into silver shares. That much I know. More to come later…
Martin,
My firm belief is that most don’t have any more of a clue than I do at this time. If they really did fully know, then we wouldn’t see nearly the drop in value during financil downturns. I have learned from your company’s e-mails more in the last 9 months than I did with a financial advisor in ten years. I further believe that Hedge Fund managers are very good to excellent compared to mutual fund managers. Unfortunately I along with 99% of investors can’t afford to use this avenue of investing. Would be nice if we could!!!!
Thanks for enlightening many of us.
Dick Newlin
I think the intent of your question and your question are unintentionally divergent. The investment characteristics of a mutual fund’s investments and that of the mutual fund manager are not necessarily tied together for the duration investors may hold the fund. There is little doubt that when Peter Lynch left Fidelity, that the investing characteristics changed. I believe most people look at a fund, or family of funds, and do not pay attention to the change in decision makers. So their funds approach changes, even if they once had the rare individual who is consistent and systemized.
If we accept that a fund and its manager are synonymous, I think there is little doubt that most are not worth their fees. What is it, Swenson reports eighty to ninety percent can not beat their index? With so many good strategies that work OVER TIME it is difficult for me to understand how fifty to sixty percent can not beat a passive index. Lets think about this, with all of the analysts on staff, all of the company, competitor and customer visits which are performed. All of the charts and technical’s which are analyzed – all one has to do is overload on one stock that outperforms, or pass on one stock that is going to under perform -and you can beat the index. With all of the resources available to all of these funds, surely more than 1 in 10 of these guys can guess right.
This makes me believe most are chasing performance, thus they are changing strategies. I think most are jumping from style to style to keep marketing happy and AUM growing -instead of letting long term performance be their marketing. I am sure most will give some detailed well reasoned explanation as to why they did what they did- but I would bet you the cost of your subscription that most could not say what they will do in 6 -24 months – under different circumstances. In other words, most do not have a plan which would let them take advantage of opportunities which present themselves. To me this is a plan for up, down and side trending asset classes.
If they do not have a plan, then they are using their gut to make their choices.
Hope this helps,
Larry
Martin after reading (how much do u invest in differant things) I disected each stock bond and other investments into each class. I was a little supprised. I have started to adjust some of my allocations.Im going to take some money out of PTTDX (a intermediate bond fund) and put it in a short term fund or short term investment grade bond fund. Thanks for making us aware of how easy it is to get off base. I have most of my money invested with the recos of the Mil. dol con. port. and Safe Money Report. In regard to your current question.How do the pro invest? They are pretty methodical.I believe they study charts,phases,demographics,financial reports from Companies and the big economic picture of the country as well as many other things. They dont guess or shoot blindley. Maybe at times there is some speculation Regards CW.
follow Larry’s REALWEALTH Report, I am studing to learn market trends to pick other stocks in Oil&Gas sectors, retail and other sectors. I have some bonds however REALWealth report has 50% of my dollars. Mutal Fund managers have so much money to invest quickly,I don’t believe they study the market too closely. I know there are exceptions.
I lost a lot of money in the crash-I thought foolishly that gold,silver and uranium shares would be immune-how wrong I was.The things I have learnt are that timing is critical and to make a profit you have to buy cheap.My portfolio has partially recovered-I had to keep the bombed out shares but sold those that were in profit and so I have plenty of cash.I anticipate that the stockmarket is significantly overvalued-Tho` not the precious metal shares.When the next crash comes I shall buy in.
I believe most of the Managers go by experience. Some travel and visit the companies by phone or in person. Some pay a special trader who is a good gambler for some advice.
The problem with the managers is that they are not good in timing and research. At the end one has to depend on what influences us the most on what we read and hear and take the consequences. Unfortunately trusting in Managers are disappearing.
I think they have the advantage of visiting the CFO’s, and actually walking thru a company to see the operation. Obviously, they have much statistical info to back it up, but many of the old methods of stock analysis does not apply today. I think Buffets method is more effective. Know your company, its history and personnel, and roll the dice.
40% in a safe “guaranteed” money market type of account call it cash with 4% earnings.
10% in coin bullion, gold eagles, silver eagles and a few platinum coins.
30% emerging market spread using the bric with a K and A for good measure.
20% US stocks, just in case I’m wrong about the obvious failings in the US.
It appears that brokers are selling whatever the company can make the quickest profit on. I don’t trust their suggestions. I think fund managers follow the recent trend and they hope to keep the fund assets to continue their fees. It is a combination of guessing and hoping. It seems to work for THEM.
I believe the majority of money managers have an allocation system they use for diversifying a portfolio. However, I don’t think the old way of doing things will work for most of us going forward. The future is unpredictable, and at best, being manipulated, so it is more difficult to try to apply old ideas that worked in the past. I am listening to Larry, Sean and some of the others at Weiss, but to a lesser degree, and allocating based on their recos. So, gold, silver, oil, gas, contra currency plays such as UDN and MERCK, as well as China, Brazil, India ETFs. I am also investing in dividend-paying stocks. As far as percentages go, I am not giving it too much thought at this point. The markets are changing too quickly. I am taking profits more readily now, rather than playing the buy and hold game anymore. Buying on the dips, selling on the rips has become my new mantra (thanks, Sean).
I assume that fund families have large data basses to draw from, and have computer programs set-up to select “good” stocks. And I assume they follow their own favorite “indicaters” to guide their timing. Their downfall is that they have no “sell dicipline”, and most are committed to staying fuly invested even when the market turns against them.
I’m thankful for your insight and candidness in sharing with us, how to keep our uninvested funds safe. Thank you very much.
It seems that all the hype and advise is a little bit of guessing, investigating the resources thoroughly, and gut response. I have very modest investments, made more so sincce the grat crash of ‘08. Primarily through your urgings I put part of my investments in US Treas. Money Market. Since I have more than myself to make the decisions, I have been stymied. However, if I could depend some of the legitamate Asian funds, perhaps I’ll start rolling again. I am somewhat intimidated however, by your pronounced negative views of the nation’s future.
I only trade stock- foreign & domestic including energy and nat resources – no bonds- no excitement, no bullion etc to costly with storage and service fees – currencies are still a little scary to me
I try to stay around 50% energy& Nat res & 50% other areas for lack of a more logical approach
I think it is a combination of all three but with heavy emphasis on gut.
I follow the recommendations that you provided in your newsletter and the recommendations from Larry Edleson, Tony Sagama, and Claus Vogt. I am a very small fry right now, but my total value is slowly increasing so that I will be able to do as well as your Dad. The managers of today do a lot of study with very sophisticated instruments and techniques. The results are not always 100% but the probabilities of success are greatly enhanced.
Question #1
I have been scared to invest in forgein markets, and domestic markets alike, therefore I am overweight in presious metals, I have no idea how to make decisions on forgein markets, but I do know our country is headed down a dead end street! I am open minded and willing to follow any common sense advise!
question#2
I don’t know how to determine how much money to invest in what market, but I do know that listening to brokers only makes brokers money, thus my over weight in metals!
Most Fund Managers and those considering themselves expert in the investment field give investment advice and share allocation on the basis of a veneer of individual research and a lot of exchange among peers – larger operators are guided by favoured investment companies and sectors handed down from the floor above.
From a personal point of view – I will read a lot of relevant material, web research, listen to peers and aim to decide for myself. I am not into sitting tight -never drive in where you can’t back out !! – and be ready to do so.
I have been a broker in a major wire house for 37 years. Your information is one source that I use. I believe in asset allocation and I think precious metals/natural resources should comprise 5 – 15% of one’s portfolio. As for the bond portion – I feel we should be shortening maturities and staying with high quality corporates and muni’s. I do not feel hyperinfl in right around the corner.
I subscribe to a publication from one outfit that thinks we should be buying canned goods and weapons and investing only in physical gold. Everyone is entitled to an opinion.
When it looks like there in no light at the end of the tunnel and all hope is lost, something like a Republican winning a Senate race in Mass happens and things start to change.
Like most people here, I try and pay for sound advice and research and then make decisions based on instinct. With the fundementals so out of whack now, it is hard to clearly decide the best place to go. I sold all of my mutual fund positions in February 2007 because I had a “feeling” things were about to turn bad. The mutual funds I was in flew SOUTH for the spring just after I sold and have never returned to the levels I sold at. I moved the money into self-directed IRA accounts and have managed to grow my money using ETF’s in gold and silver. It has not been always successful and some blood-letting has occured in the process. Fortunately though, I am still way ahead of them!
The mutual fund managers at NML seem to pick their favorites and then just ride the roller coaster up or down and let the market take over. I don’t see much market timing on the NML managers part. My self, I follow Larry Edelson on timing. He called the bottom exactly. Asset allocation. 10 % gold 10 % US stocks 10 % asian, 20 % canada $, 20 % land speculation, rest cash waiting for something good to come along.
i play all the dips in a bull trend.when there is a retracement in oil, gold, silver, and the dollar-i go long.no long term investments.
I have about 10% in precious metals. 80% in money instruments and the rest in bonds for now.
I have dipped slightly into stocks, stayed with a 10% gold mining/gold ETF/bullion allocation, and kept a sizable cash reserve for an emergency fund. I have maintained a small position in foreign currency through CDs. Otherwise, I have been watching for job growth, and that just hasn’t happened.
For years before the economic slump, I invested well enough by doing my homework. However, since the obvious manipulation of precious metals & stock market, due diligence has not been reliable. Without jobs, there can’t be any recovery, yet the stock market shows uncanny growth while huge banks are claiming losses in the billions. Add to this situation the “gold-plated tungsten” found in depositories around the world, plus I’ve recently read where FDR’s confiscated gold coins containing an alloy were melted down into 22carat gold bars that are not fungible. Is silver the only honest intrinsic remaining? What’s a girl to do?
I have decided to place 85% in C.D.’s.
15% is in gold and oil.
I have sufficient income and a large (for me) nest egg. Will die with a surplus.
the professionals have anocean of informatiion and experience at working through the conditions of all available stocks and bonds. and the companies who issue them. the rest of it is making the best possible use of the information. the rest of it is gut feeling and the fortitude to hang in there.
Professional money managers (Mutual Funds,etc) have troops of stock analysts
access to stock info the normal retail investor lacks.
Investment Decision for domestic or foreign …use Index funds ..lowest expense ratio
allocation: Domestic 75% 25%
Gold and precious metal….none..missed the window on the run up…rationale. I was not interested in paying regular income tax rate on metals versus capital gains on equities.
Energy and Natural resources..Picked up in Indexed funds.
Foreign currencies….Have not participated. Never thought US dollar would be falling in value.
Bonds….No purchases.
Hello Martin,
When I am investing for my self I have the lattitude to use my gut.
However if I am responsible for investing for others I will do as much due dilligence
as needed to produce the maximum gain.
Bob K
My husband and I dont have a lot of money, and we have no idea in how to invest, we are afraid to possibly lose what little bit of money we have.
Jackie
LAST week’s questions: After I have updated my allocation among (1) short/mid-term investing/trading growth stocks, (2) 3-5 year buy and (hopefully) hold, and (3) income producers, I decide on sectors/geography, etc. per fundamental/economic outlook , plus per technicals for the short/mid term positions. Now it’s resource/commodity-based producers (miners, oil & gas E & P, manufacturers, etc.) supplying emerging economies in countries with strong currencies and treasuries [NOT the USA]. THIS week’s questions: fund managers “march to the beat of a different drummer” from my
priorities.
Martin: Years ago I remember Peter Lynch commenting on how he approached determining what companies to invest in and what not. As I recall these pros have staff, computer programs, and contacts in the business world we little guys have not. I believe responsible money managers use these contacts to their advantage. Probably no guessing games and dart boards to point out candidates. It takes hard work to understand a companies income statements and balance sheets.
I rely on your staff to apprise me of likely investment candidates for my portfolio. At 78, I have a much less risky outlook, ….some of the time.
I have no faith or trust in any of today’s money managers, Investment gurus, Financial Planners, Wall Street or Mutual Funds. Having lost over $400K with a multi-billion dollar Investment Advisor here in California, whose only mantra was buy, buy, buy and who wouldn’t have seen a bear market coming if it hit him on the head with a 2×4. This was the same company who advised potential elderly clients they could see into the crystal ball and would move us to safety (cash/treasuries/bonds) because the “Guru’s” expertise was based “on knowing something other people didn’t know”. I have been completely in cash for almost two years, after they lost 50% of our lifelong investments. We will never recoup our tax writeoffs in our lifetime, nor will we ever recoup our losses — too old, and now retired.
I no longer believe or listen to any of the financial charlatan’s out there. We only need look at the banks, Goldman Sachs, JP Morgan, et al to see that the fix is in and that the markets are manipulated by the elite to the detriment of the little guy. I would have made more money if we’d just bought CD’s over the years instead of stock in the markets.
Hi: I ans.last week but wasnt accepted. I only have about 15,000. left so as I am 70 1/2 this year I am going to cash it in. This is a IRA. Only money I have left. Thank you. Bette.
They don’t give a damm what I am interested in, they are only interested in their own aganda. I don’t use mutual funds or brokers because they are only interested in what there company is pushing. I don’t like an advisor that wants me to give then $5000.00 and then isn’t held to any standard when they make a recommendation, I can make a guess myself.
1) I invest for growth and select economies with solid growth and a good outlook, I use charts for timing, it does not always work – see China now – I thought it was consolidating
2) Currently I have about 10% of net worth in gold and miners
3) I had invested in energy too early it now recovers
4) I stay away from currencies and find these difficult to predict
5) Currently I stay away from bonds, I expect higher interests and lower bond prices
II) I think that a 1/3 allocation to Asian growth markets is reasonable, also Brazil is a good bet
K. Vogler
I think mutual fund managers use the advise from their research departments to structure their portfolios. As I understand it, they do not care too much about whether we make money, just whether they make money. And, if I’m correct, I understand that they make money by bringing in money, not based on their performance.
The answer is very simple : They just recommend whichever will give them to greatest commission —- This has been their prime strategy for years !!!!
They utilize international derivative markets to determine their valueand how each counties cyclical bond market determines the international trading of the different currencies through the derivative market.
They utilize international derivative markets to determine their value and how each countries cyclical bond market determines the international trading of the different currencies through the derivative market.
I subscribe to several newsletters including yours and allocate my portfolio based on those recommendations, mostly, since I get contradictory info often. In everything but mutuals, of course, I’ve got stops in place and sometimes they kick in. If I’m feeling the drop is an annomaly I usually buy them back at a price lower than the stop. I’ve been getting advice that mutuals are going to tank. What say you?
Positive momentum above 200 day MA in a strong sector, domestic and foreign mkt.
1. a. The majority of my stocks are domestic. However, 25%-30% are invested in foreign stocks, with most of this being in Canadian energy stocks. Several ETF’s are in foreign countries, the choices made mainly on strength of the foreign currency.
b.Gold and silver make up a small porton of the portfolio-less than 10%, which also includes mining stocks.
c. Energy stocks, both foreign and domestic, make up a large portion of the portolio, about 60-65%.
d. No investment in foreign currencies.
e. Bonds make up the remainder of the portfolio. I purchased muni bonds early in 2009 and they have done well.
2. Asset allocation is not a strong point. I feel comfortable in the energy area and I think it will do well long term. Health care seems to be improving and will see what happens to the Health Care bill.
I need more help in investing correctly in todays market. I have 30 thousand that I need to invest in February and much more in an IRA in October.
As canadain resident i hold no US stocks, Commodities are traded on seasonal factors prior to summer, with no US dollars and buying HTD-T .Invest amounts which cover my living costs plus a return on time in the market example if i purchase today and are up say 2-3% i would sell.
I think that one has each kind of manager trying to get people to invest money with them. I have seen some who have the shoot in the dark I read the info and then I have seen those like yourself who do the research and watch the trends and follow the best one can. One must remember it is always a game of odds and nothing is 100%, but as long as the research gives at least a 90% + then those are good odds yes?
Martin,
I think that it is pretty clear that most “experts” use a gut feel to enter / exit the market for their investment. Most of us non-experts certainly use gut feel. For example some recent Weiss discussion on the sugar market “clicked” for me, so I jumped into the market.
You would think that the professionals are much more disciplined about this, but I suspect there is a huge spectrum of expertise on this matter. Maybe more of the market professionals ought to subscribe to the Weiss research.
Please keep up the great work on this subject.
Dear Sir,
Firstly, thank you for your wonderfully informative newsletter! I scarcely have the time to pour over everything from your company, yet I am grateful for the resource.
I am unfortunately not in a position to invest, (I am suspicious that some foul play has come about;) However in regards to your last investment question, what to invest in. For the sake of solidity, I would wager Gold to be the single safest investment the world over – value, which I assume will remain in demand. I have a very interesting friend that tells me death bonds have taken an unusual augment in recent times, preparation for a liquidation of sorts – I perceive this to equate to massive gains for those holding the bonds. I have a personal interest in commerce, particularly as to it’s correlation to our sovereignty. A marvelous system, if we work with it. Indeed, God Bless us all!
I suspect we tap a variety of sources for our investment decisions, though, I am quite sure there is a measure of, an educated guess, a stroke of dumb luck, and some good advice along the side, for all of us. We are fortunate to have this incredible information highway at our fingertips, and those of us actually taking the time to ponder fluctuations in the market, may chance on patterns, though I believe we must evolve with the forces that drive industry, and all that effects our manner of option to invest. Back to good old Necessity, the Mother of Invention~ There’s our real driving factor! I say trust your heart, go with that gut feeling! Good luck to all, may you have God on your side~
Many factors “factor-in” allocation selections and since many fund managers are not successful the more important question to ask is the feasiblity of being involved in such investments. Martin – we are truly waiting for YOUR concepts of bulletproofing our portfolios!!What are you waiting for????????
I do not have the gut feeling on how to adjust my portfolio. I have been taking part of the advise of financial advisers, but I am not sure they are correct.
Dear Martin,
Thank you for your site, your informative web sessions with enlightened market sages and the oppportunity to comment.
At this point in time, I find myself moving towards making stock decisions that have not been entertained in the past. My husband and I have a solid conservative portfolio with a particular company in New Jersey/NY and happily have made profits while other people lost money, sad to to say. This conglomerate contains bonds, very profitable REITS, and mutual funds, and IRA accounts.
Within the past year I sold some GE stock at the advice of my broker and bought PEG, my decision, which I have been advised to hold. I know this utility is on the green wagon with many innovative future projections. Also, invested an amount in JAG, just through studying a bit of the market; it sounded good and was told through a well known brokerage it has an “A” rating, as purchased serveral shares of MR, medical apparatus.
I believe in my intuitive fashion that global markets, metals, energy, and technology is the wave, but truly there are so many options it is unfathomable to truly know what is best unless you are the pro working at this all the time. And then who do you trust?
Well there you have my comments. I appreciate the time to express them and wish you and yours a most prosperous and blessed new year, 2010. Today’s good news is the American people are speaking and being heard…finally!
Martin,
After the beating that I took in 2008/09 thanks to one of the “best investing management companies” in the US, I am now back doing the investing for my family by myself. Your information has been very valuable to me and your other subscribers. I have been spliting my investments between foreign stocks and domestic stocks, with an emphasis on gold, silver, oil, coal, and telecommunications providers. I now have approximately 50% of my available capital invested, and the balance in cash assets for further opportunities as they come to sight.
As to how Mutual Fund managers and brokers decide which investments to make, I believe they have back-up people who do most of the research for them. After looking at the research and confering with others, they make what they feel is the best stock, bond, or other investment to fulfill the purpose of their fund and the benefit for their investors.
Dr. Weiss, I have no clue as to how to manage what little money I have. I’m strictly invested in the only sure thing I know CD’s; they do not pay much but you are not on a yo-yo string up-down up-down. When the CD is due whatever percent I was offered becomes mine.
As far as the pundits are concerned they merely roll the dice. I need guarentees.
They invest into whatever makes them the most money and that includes in no small amount the personal incentives they receive for swaying the market.
Martin
I’m watching the metals ( silver) and the oil ,I think if we start having inflation both o these could increase in price. Silver because of the ratio / silver /gold. 20% , 20% , Cash- Wate
I try to read every type of newsletter that talk about investment strategies and when I implement those strategies I still see very small returns. I get frustrated with the my returns and I return back to bank investments (ie. CD’s, Savings etc).
I rely on Weiss management, I hope their not all hype.
There are probably no two methods or stategies used by the so called “PROs” that are identical in their attemp to maximize ROI for their investor clients. Different perspectives on the investment climate, long term vs short term thinking, and experience level are some of the issues a fund investor would not have the information on to evaluate. Secondly, the performance history of the pros’ is seldom consistent due to changing economic conditions and cyclical performance of individual companies requiring a fund manager to adapt on a continuing basis. A tough challenge to meet! That is the reason I continue to select individual stocks as an investment strategy over managed investing that must employ funds to a high degree with less flexibility.
I have 15% of assets in Precioua Metals and & 7% in PM stocks. This is for insurance purposes. I have enough cash to live on for 3 or more years-in U.S. govt short term bills. How does one invest in the casino ? Carefully I believe while considering your guidelines and maybe those of few others.
I am putting my money in low-end foreclosures in Florida. Florida will continue to be a Retirement destination as well as Vacation destination. Florida residents pay NO STATE TAXES & sales taxes between 6.5-7.5% on retail purchases & services. Florida also has a large infrastructure for Science, Aerospace & Medicine. The Federal Government has & will continue to have a large presence in Florida & will be there to backstop the State regardless of the economy or natural disasters & let’s not forget Disney, Universal, Football & Miami. My Business partner & I seek out good solid properties that need little or no repair that we can easily rent – preferably 3bedroom 2bath homes or solid 2bedroom 2bath condo units in complexes that have low HOA fees & lots of amenities. We then calculate based on purchase price -how many months it will take to recoup our investment – we don’t care if the property appreciates in value. If the property can return us 100% of our investment in 6-7 years then we win in the long-run with a property that can rent until the end of time. As you probably have already guessed – if the market does turn upward then we also reap the added reward of property price appreciation. We deal directly with the Banks & only buy REOs. We have a great relationship with the Banks because we solve their problems by helping them clear the backlog of inventory from their books. As a result – we get the Best properties available or we get an exclusive to Market the property for the particular Bank for upwards of 90 days with no pressure – They Need The Money! There is another beautiful angle here & that is we come across properties located on lakes, near the beach & in very desirable neighborhoods that in many cases are now selling for 50-75% below the market value of the neighborhood. We have helped people to buy investment properties to rent, to purchase a second home, rolling over their 401K & investing it directly into real estate as their retirement portfolio & formed groups of investors to buy real estate. Additionally since we purchase our properties with CASH – we can sell properties to people & we are effectively the Bank – no need to go through the hassle of all that paperwork since the buyers are dealing directly with a Trust. We also help people get returns of 12-18% on their money in the form of notes for real estate purchases backed by 2nd mortgages. The payback is usually 6 months. We are fortunate to still be here – many Realtors, Banks, Investors, Developers & Property Owners are gone. We have been able to accomplish this through determination, hard work & reputation. Another area we are now moving into is agricultural land preferably with fresh water located on the property. I believe you & your readers will understand why.
Thank you for ALL of your investment advice Martin – I really admire You!
Ken Wollitz
After 65 yeaars of investing, (mostly dart-board) I have concluded that the retail customer’s best interests at a typical brokerage, is at the bottom of the pile. Asset allocation somehow or other seems to coincide with whatever the brokerage house happens to have in inventory.
I try to ascertain what are the leading or emerging economic trends, waves and technology of the future. That is those areas the offer the greatest promise for mfg. sales, needs and technology of the future. In addition, I seek to balance that with large and sustaining divident producing companies, good oil stock, and precious metals to provide both revenue and security.
When they say gold is too expensive right now to buy, I conclude that they are blind to what is going on world wide in the economy and stop listening period. We are in deep, well you know what.
Two years ago we sold our house at the top of the market in Austin, Texas. We bought a bigger mattress and moved to Sedona, Arizona where we now rent with an option to stay here until we move to the home.
P.S. I used to be a financial planner and stock broker. I am a professional meteorologist and spend my time researching “Global Cooling” and the coming “Ice Age”, which will accompany the Greatest Depression the world has ever seen. Don’t tell Al Gore.
I listened to various experts regarding gold, energy, currency, and commodity. Then I would make my own decisions. I am very heavy in gold and silver, which is real money. I used ETF and gold stocks to leverage for growth. I bought stocks from energy companies too , but not too much. I like real assets rather than paper.
I think fund managers over analyze and mostly act like sheep (following the pack or latest fad). Their research and astute analysis has been outperformed repeatedly in numerous studies using random selection by kindergartners, apes, dogs, darts, etc. Their penchant for being nearly 100% invested most of the time cripples their ability to foresee and take advantage of bursting bubbles.
I think they look over long term charts to determine resistance and support, and then determine the trends and buy and sell accordingly. Some may use Fibonacci techniques, but depends upon their software packages.
I sincerely believe that they do know tons more than I do about properly charting stocks, sizing up economic indicators, and how traders can affect the price. But everything is affected globally now, and there are artificial influences inflating markets and deflating them at will. One can’t study those very well. So one tries to apply logic but ends up throwing darts. Which is why so many novices like me that don’t have a big portfolio are just going with their gut, because the more educated one becomes the more confusing it can be.
Only thing that seems certain right now is that gold will rise way up by 2016 (over $5000 ounce according to Martin Armstrong, whose info absolutely fascinates me!) as confidence in leadership vanishes, the dollar collapses and hyperinflation is in full force. But will the Dow continue to rise with it? Or will it fall as commodities and etfs climb with inflation?
What I am wondering about for this and the next couple of years is if the Dow has a major correction (whether it be because of a finance bubble exploding in China or Greece, or China not accepting the dollar anymore for our debt, or oil companies demanding gold instead of the dollar, or a possible nuke tragedy, or “whatever”) what does one invest in as a hedge against this (the Dow falling) since it seems gold, oil, etfs are all going in sync with the Dow, whether foreign owned or U.S. owned???
May God Bless You too Martin!!!
I am not pleased with my current advisors. Let’s talk.
I read almost everything I get by email from M&M, just to broaden my knowledge. As I live in Ireland, investing outside of Ireland is reserved for just 20% of my investments, mainly in growth sectors – since last September, I am back in oil stocks and Asian investment funds – long term. I invest 50% in strong Irish companies that I do a lot of research and that have long term grown potential. The other 30% of my investment folio is gambling in the markets. I keep a simple chart that spots the cycle and I buy low and sell with 10 to 15% gain. Other aspects of the market, I do not fully understand and don’t get involved.
Cork, Ireland
My answer is mixed…I think that the real “Pros” (i.e.: hedge fund managers) use sophisticated analysis (both fundamental and technical) and their experinece in spotting opportunities to make plays, balancing the long term outlook with the short term windowm of opportunities.
Brokers vary, from my experience; some of them believe in large cap blue chips and “buy & hope”; other Brokers aren’t analizing stocks as much as they are selling products (i.e.: money manager accounts).
Mutual Fund managers appear to be more long term investors in large companies (because they need lots of volume so their influx or pull-out doesn’t move the market. Obviously the MF managers are bound to invest in mostly what the fund is advertised as (i.e.: large cap, small cap, income, etc.). With the advent of ETF’s I see the mutual funds becoming less popular as time goes on.
I will NOT be investing in Mutual Funds. Never Have never will!
Why? These fund managers do not have to be geniuses. They get (over)paid to the tune of average, guaranteed 600k and 1m bonuses per year whether the fund makes or not, to nilly wiilly pick stocks. Nobody going to do a “madoff” with my money.
Pay should be performance based. Go up 10% earn 10%. Go down 10%. FIRED!!!
I think the services, each, rely upon founded services that meet their oun personal needs and beliefs. Do I trust these,
well, it all depends upon my own goals and risk undertaking. Thanks for your continued research and offerings.
All Mutual Fund Managers want to increase the value of their Fund. There are many types of Funds; most limit their investments to certain areas. If we assume that this Manager is limited to large cap American stock companies with an objective of stock appreciation along with dividend income, then the best Managers will have their software set to sieve out the following:
1. Current broad market conditions compared to past markets and similar conditions.
2.What are the current growth fields? Are they cyclical or not? If cyclical, what does the past teach us? If not cyclical, then what makes this a growth area?
3.What companies lead the field? Is there a clear leader/innovator? Why are they in a leading or dominent position? What is the age and experience of their management? What is the companies’ goal?
4.The best Fund Managers will then do the necessary legwork to sit down with management to get a personal impression of those who run the company. Large Fund Managers are rarely turned down when requesting interviews with top management.
4. Who are their closest two competitors? Are they gaining or losing market share? What are the corporation’s business plans for the immediate and medium term future?
What are the competitor’s plans? Is stock overpriced or underpriced relative to various ratios. This list is certainly not exhaustive but indicates the type of work that must be done before an intelligent investment can be made by a Fund Manager or a Professional investor.
Stock Brokers are salespeople who work for brokerage firms just as car salespeople work for car dealerships. The only difference is the product sold. If they do not sell then they do not make a living. Whose best interest do they work for, yours or theirs?
I like to consider the opinions of those with a good track record. Then I keep 3/4 invested in mutual metal funds,bond funds,utilities,and technical. Of the remaining 1/4th , 1/8th is in gold and 1/8th in more speculative ventures. I like advice from those who have little to gain.
I do not know what to do with my portfolio!!
Am looking for a plan..In the past I have tried to read all I can to make intelligent buy and sell choices..No set style or allocations…Guessing and gut feeling pretty well describes my style…
I do not know!!
Dear Mr. Weiss,
As a Canadian I trade in the Ontario Stock Exchange. However I have found your advice serves me well. I would love to join your organization but the membership requirement is out of my league. Most of my money is in Communictions that pays a good dividend. also I have money in a fund that is generating a return. The fellow running this fund is held in high tegard by my Broker. I keep tabs on where he is investing his money. Mostly in oil & metals. I personally have had my eye on a couple of stocks. One was FPL, but since the Governor has become involved in the management of FPL. It has lost it’s luster. Another stock I was following that looked like it had potential lost it’s potential due to some manipulation by the management. I use to have my money in Trusts, but the Finance Minister of the Canadian Government has turned things around so that I was lucky to get out when I did. I am in my 80th year and as my Father-in-law once told me if you can’t afford to loose it don’t become involved in the stock market. He worked for a Broker in Toronto. My Dad lost a fortune in the crash of 1929. the year I was born. So being slightly conserative I hesitate to sink my money into the stock market. I have to admit I see the market doing well, but it only takes the Finance Minister to say something wrong and our market goes into a nose dive. To tell you the truth I am waiting for the fund I am invested in to reach what I paid for the shares and I will be out of the fund.
Dear Sir,
I am not an investors but as an accountant I give some time advice to my clients.
Your reports are quite valuable and can generate good profits to any one who has taken
them seriously.
The problem we have here in Australia is that your research is based on USA stocks
and it is not practical to invest in them but gold is universal my clients made good gains
by holding gold.
There are so many crooks, and shysters about. Frequently in high ranking positions, e.g Enron etc. As for investing in China! The Chinese are a ruthless mob, especially those in power. (My G.P. agrees with me, and she is Chinese). I have zero faith in the stock market these days. Think I’ll hang on to the cash that I have, and get a modest amount of interest from Australian banks. – quite safe. Different regulations apply to the banks here, than the banks in the USA. Sure I am not going to make a stack of money, but at least I have a big chance of hanging on to what we worked so hard to accumulate. Best wishes, and I love reading your missives etc.
I look for investments in countries such as Brazil that encourage capital growth. Some nations in Africa and Asia are where the USA was 100 years ago. More of my interest is global than ever before. I also believe in inflation protection. There are too many $$dollars chasing too few goods in this country. I listen to but don’t always heed many different advisers. No one cares about my money as much as I do. I like a good cash flow from investments. Over the years so many gurus have rocketed and then fallen splat back to earth. Some are better guessers than others.
Question #1: How are YOU deciding whether you’ll invest in
(1) domestic and foreign stocks, A: Domestic
(2) gold bullion and other precious metals, A: Gold Eagles, Silver Eagles, Silver Bullion, no ETF’s (paper gold)
(3) energy and natural resources, A: Yes of course energy (oil) (exxon)
4) foreign currencies A: No thanks
(5) bonds in 2010? A: No way that will happen
Question #2: How do you know how much of your money to invest in each area?
A: A spread, these are the only real area left to invest in.
Some of the brokers that are new to the game most likely take risky chances and invest blindly. But the more experienced Brokers have studied the trends and know where the proven wise investments that are considered safer, more reliable to increase profit. They know how the trends work, when they are most likely to be profitable and when they are most likely to fail. They know how to build a good solid portfolio that will lead to profit for their clients and theirselves.
I think they probably have a screening process and have a systematic way of selecting stocks for their funds. I also feel that they are willing to chuck the system out in a heartbeat to engage in a little window dressing at crucial reporting times.
Mutual fund mngrs. use research/technical charts to select companies. I don’t want to pay the fund fees. I have about 50% in a short term treasury bond fund – I selected a few stocks (telecom/utilities) that pay a decent dividend 4-6% – some energy and natural resources (also agricultural) – some uranium (took some gains a while ago – wish I had taken more) and rare elements – gold and silver stocks. I have been reading your advice re Amer. cos. w/large foreign exposure and foreign cos. but have decided yet. I do not have any foreign currency.
It’s a scary time and I appreciate your advice.
I am holding most of my money in bank term deposits,because the economic situation scares me. It appears to me to be out of control
OUIJA BOARD
I take input from all sources of financial news and have traded very well in the last few years in my own trading accounts.
I am an Eliott wave geek and allocate my funds across various high beta sectors including silver, solar and bank stocks. Up more than 150 % in the last year.
My view for the future: We are about to top and enter a deflationary depression. It has to happen. The consumer is dead, unemployment getting worse, financial and housing markets still have huge losses to come. It will take years to correct this mess. The government can only make things worse. They cannot make you or me buy something or the banks lend if we are fearful of the future or simply cant buy because we cant get credit or have too much credit and are deleveraging.
The depression already started two years ago, but is about to enter the scary phase in a few weeks time when the stock market will loose 80% of its value of today. Target on the DOW – 1200. Bottom sometime in 2011 / 2012.
The rally since February has been a correction, just like 1929. THE CRASH TODAY IS A FINAL WAVE 4 CORRECTION AND THEN WE WILL HAVE ONE MORE FINAL PUSH HIGHER OVER THE NEXT FEW WEEKS TO THE TOP. WE WILL NOT SEE DOW 10,000 FOR AT LEAST SEVEN YEARS, POSSIBLY MUCH LONGER.
So, Get ready to sell all stocks and assets and buy leveraged ETF’s – EEV, FXP, QID. ALSO SHORT GOLD AND SILVER AND ALL COMMODITIES. In a depression everything goes down as it did in the initial wave 1 crash phase that bottomed in FEB last year.
When the market bottoms in 2011 / 2012, then and only then will prices reflate. That will be the opportunity of a lifetime to buy gold and silver stocks, cheap property and other assets. If you can survive the coming years !!!
I have studied the markets for 9 years since I came over to Florida from Scotland. It was easy to see this coming for anyone who spends almost every day studying such things. Markets go up and down in cycles and we are due a major correction as in a depression. It already started two years ago.
In my view, the last few years and especially the coming few years are an opportunity of a lifetime just as your father did in the last depression.
Only my opinion, but so far so good.
BEST OF LUCK FOR THE FUTURE,
Graeme McDougall
Florida, USA
I think choices are made by use of a trained chimp
throwing darts at the financial page in the newspaper.
Actually, I’m sure of it – - – I read it in a magazine,
it must be true.
I WOULD HOPE THE FUND MANAGERS HAVE A SYSTEM. I DON’T KNOW WHAT IT MIGHT BE BUT SHOOTING BLIND IN DEFINETLY NOT ONE OF THEM. ANYBODY CAN SHOOT BLIND AND SOMETIMES BE LUCKY BUT MOST TIMES NOT.
I thought I had answer these questions last week. Maybe I was too late responding. Gold and Silver is my limit on investments and money management is very important. I purchased these items when Gold was riding 375 $/oz and Silver was riding
5 $/oz.
I invested in a mining company and purchased through them. In they went belly up and walked away with the Gold and Silver.
Investment is a business and records are filed of past event and trends and from this can be put into an equation for an answer and a decision will be made based on that result. These are how managerial decisions are made. As a PE (retired) I had to make decisions on purchasing large expensive equipment. I do not believe in hunches without this procedure.
As far as percentages goes, money management is of most important when dealing with the unexpected that may be around the bend that could wipe you out.
There is no positive answer working with the unknown. Experience and from people who live and breath the market would be the best choice for input and decision making.
I have always looked to history to give an idear. I think wall st and the uk the bankers have done things facing the wind and have cried when they got it back.
stable products are things that will be in demand like rair metals water and food(we all need it)
I think they use market data,economic indicators and study graphs and charts.
Hi Martin,
Thank you for your columns, notes, info, etc. I only invest in what I believe is real, and what will still be valuable 5 to 10 years from now. The stocks, bonds, financials, will all be there years from now, but in what condition and what value based upon a dollar that would devalue. Right now I believe the only investment that will still be worth what it is today years from now, if not worth a lot more, are the precious metals. I buy them when my gut tells me to, and when they are not overpriced, and that is difficult in a metals market that is constantly manipulated. Manipulation or not, the value will always be there for the precious metals, no mater what happens in the stock market, financials, or the dollar and the economy. To think otherwise I imagine is okay, but the markte, financials and even currencies are always a gamble. I think putting your money into what is valuable, what has always been valuable, and what will be valuable in the future is the best move anyone can make.
Best to all in the coming year, and may God Bless you all – Harry
Answers; Larry E. is my Prime Guru w/ regard 1,2 &3 re: 4 & 5 not sufficiently knowledgable to have confidence.
Re: When people play with my money they never do as good a job for me. Plus they are less likely to put me first and foremost ahead of their own interests. It’s what one would expect. — There is an ultimate schrudness that makes people like Buffet a consistant winner. The info. is out there but it’s certainly beyond my reach. What’s compounding and descouraging to any real analysis is the unpresidented distruction of our good wealth by the present administration, which constantly keeps the measuring scales out of kilter. Ask Claus ? — I think I’m venting—-God Bless
Dear Dr. Martin,
while I highly admire and value all your pubications and insights,alongside with the inteligent contributions of your team of experts, yet there are a few frustrating lacks of information for your overseas readers,like me. I live, presently in Lebanon, and seek to invest and diversify my portfolios. When i try to follow some of your recommendations I don not find detailed steps on how to do that? If I want to buy, for example, gold bullion, I can not find it available at the Lebanese Banks. If I want to buy it from ordinary jewllers here, I find the price of gold per ounce is much higher than the international price! I invested over a quarter of a million USD in stocks and property shares through the HSBC bank in Qatar, then lost over 80K USD. Also,
the downgraded principals of my property shares are frozen now and I could not retrieve them. Now, I do not expect that you would provide me with a special advice, because I do not think you have time to read and answer each and every individual commentary in response to your rational questions to your readers. Non-American readers may feel that their informational needs are not well catered for.
Best regards. Beirut, Lebanon.
Martin:
I think Wall Street typically serves its own interests first.
I have found Forex trading very promising, an interest actually sparked by a program you proposed last year but apparently did not pursue. I also plan to pursue an options trading regimen.
Best wishes.
Best wishes.
Mutual funds in general pay too much attention to the next quarterly report. They also do solid research, inevitably mixed with personal feelings.
I think the majority of brokers guess or listen to rumors to make their decisions.
I wait for a major (strong) swing one way , then I play the opposite direction. If the commodity is soaring, I short with ETF’s and vise versa. I also buy half and dollar cost average if the direction does not change immediately. This has worked well for me in 2009.
Hello, The state of the economy at this time has me studying and reading about different investments types and their actions as I look at markets. Previously, I have been in real estate which now I am too much involved with and need to both diversify cash into wealth preservation areas and what may be suitable investments. Metals seem appropriate but I have been unable to have the confidence to place $ in other directions. I will retain cash to cover obligations for three years, but beyond that what to do is a question. Study and e-trades are the direction I believe. How much and when and where I wonder. Ed
I distinguish between mutual fund managers and brokers. The brokers etc. first consider their own interests before considering mine.
The fund managers are more performance oriented since that determines their salary/bonus to a large degree. They have excess to company research, but those recos often do not pan out, so they factor in their own ideas too. I look at historical performance, of the funf/manager.
I have decided to use ETF’s because I can use a limit price and I know what the price is at any time of the day and I look at momentum. But I use ETF’s primarily because of the diversification as compared to stocks. I used mutual funds before, but don’t like that I have to buy or sell these without knowing what the price will be. Also the restrictions and fees for buying/selling mutual funds make me prefer ETF’s. I also look at the price charts to decide if the price is low or high historically.
Last weeks Questions are answered as, I have an investment firm that handles my assets. They started managing my funds in May 2009 and have increased my net worth by +160 k through today. Some of their picks I’m not overly thrilled with, which I will change at the end of January. This weeks question is answered as I believe mutual fund investors do a lot of guess work without any concentrated research. Their main function is to earn their commissions. The client is not their number one priority.
Some fund managers use technical data to determine what, when and where to invest. I also think political connections and cronyism determine what upper management has the “sales guys” recommend to clients. I personally use your newsletters, WSJ and gut to pick my investments.
Prior to this year I would generally buy stocks, bonds, gold, etc. when they were out of favor and be patient to wait until they would turn around. Sometimes I needed a lot of patience. I also don´t believe it is necessary to be invested all the time. The actual % of each investment varied with my age. In this confused economic environment all over the world, I prefer to keep all my money now in 3 & 6 month treasury bills. I feel that stocks, bonds, gold, emerging market stocks, etc. ( basically all investment vehicles ) can unexpectedly get devastated over the next year or two. I may lose opportunity costs, but I feel I will more than make up for any lost opportunities if I have my money liquid when the markets get blindsided. You ( Martin ) predicted devastation last year, but it hasn´t happened yet. I still think it will happen, but it is impossible to time it exactly right. I made a lot of money shorting the market and also buying gold coins and gold stocks when gold was 280-300 dollars an ounce. I liquidated all those investments and gladly paid my taxes. I don´t want any risks now at my age and don´t want to give my profits back. I was a little smart and VERY LUCKY, so I can wait now until there is blood on the steets again. Then investment choices will be very easy. All prior recessions over the last 30-40 years ended with increased consumer spending as a result of lowered interest rates as consumers continued to increase their debt levels with all kinds of irresponsible borrowing. That game is over now. This time it is really different because credit card limits are dropping, equity in homes is gone, jobs are being lost or hours are being cut, etc. There is no easy “funny money” available any more. Where will the money come from for the consumer to spend to get us out of this hole this time ? If someone has an answer, please tell us ? If no one can answer that question, this time around I rather wait until the proverbial ” sxxt hits the fan. ” I can be patient because fortunately I live in a South American country whose currency has increased almost 40% against the dollar over the past 5 years. I don´t like to be so negative !!! I really hope I´m wrong and all of you make a killing this year. Good Luck !!!!!!
Hi Martin, I honestly don’t know about Wall st. I hope they use every analysis tool available to them and in-depth research to arrive at their decisions, however, I doubt it.
They are most likely similarly minded people to our own investment advisors/managers here in Ireland, I would not trust them.
Here in Ireland the investment advice I got from my bank (Bank of Ireland 40 years a customer) was absolute crap which I did not accept.
Folowing advice was given in February 2008!!!!.
Firstly they advised me to purchase shares in the bank: the share price dropped 95% in the following months.
Secondly they advised me to invest in property in Holland, and we know what happened to property everywhere don’t we.
Nowadays I use information from all the people associated with Money and Markets and Safe Money report to help me make my investment decisions. I also believe Mr. Phil Town got it right in his book: “Rule No.1 Investing” ie. do your research, use the research tools and don’t lose money, by investing in well managed companies with strong balance sheets over a period of several years. Of course one should take a gamble on selected penny stocks occasionally.
Thanks for your advice and guidance over the last few years. I have introduced some friends to your website and they also use information/guidance from there.
Discussing your info with my financial advisors; I rely on the imput of the professionals like yourself.
I am somewhat removed from the vagaries of Wall Street being in Australia and even when my portfolio was ‘guided’ by a financial planner, my choices were conservative. However having been involved in production planning I know that Statistics can provide a valuable tool to even-out the highs and lows of the regular swings and be a bit more reliable than gut instinct, in most cases. Whether this would have been sufficient to shield against the latest crash would have been another story.
My Certified Financial Planner advised staying in the market, even when I could see that I was losing value from the portfolio at a faster rate than I appreciated. His approach with my money was on the grounds that ‘the market always bounces back’ but even after I had opted for a less risky portfolio and finally converted the shares to cash, his initial stance was that ‘it always bounces back’. Eventually he said he wished he had followed my example.
It would therefore seem that instinct can play a very important part in decisions when things are outside the norm. I least I didn’t lose as much from my Retirement Superannuation Scheme as many others who left it all to the C.F.P. Many Australians are now relying on hand-outs from the Commonwealth government after losing lots.
With it all in cash, outside the scheme, I am not making as much as it was in the heady pre-crash days and unless the bank folds, the money is there for, if and when, ‘the market bounces back’. Until then I shall be content, like Paul.
Answers to the two previous questions: I decided to invest in foreign stocks this year. I realize that there is risk when it comes to stocks; however, I try to make an educated pick from listening to you guys and others in your line of work. How much to invest……I max out my 401K and my Roth IRA. I like to invest about 5,000 on top of that as play money (if I have saved that much during that year). I do believe that there are good stock brokers and that there are those that don’t know their head from their ass. I hope that I’ve learned from some of my past experiences. By the way….you guys have done a great job thus far.
Unfortunately most mutual fund managers have a herd mentality and will mainly look at investments as a marketing problem.
I am in overseas and precious metals because I don’t think the powers in Washington have a clue as to how to fix the economy. They are doing exactly what kept Japan in a recession for 14 years. I also buy industrial real estate with long term leases, AAA tenants that are in non-volitle industries.
Right now I use a very good (in my opinion) financial adviser for my retirement money. However, I’m also interested in learning how to do a lot of it myself, for which reason I’m virtual trading (not enough yet – my primary consulting work often gets totally in the way) with the objective of gaining the confidence to trade with some of my own money. That’s also why I read and try to learn from all the material I get from you – thanks for that, it’s great educational stuff.
On how mutual fund managers make desisions, I would assume they must have some objective methods, maybe based on fundamental analysis (?) because as I understand it mutual funds can’t easily move massive amounts of money about all that quickly because that would mess up the very market in which they’re presumably trying to profit. I’m also a big fan of Robert Kiyosaki. He says mutual funds are one of the riskier things to rely on, as they take most of the gains in fees, etc., none of the risk and all of the control. I guess that means mutual fund managers aren’t exactly stupid – one can but hope they’re people of integrity…
Hi, Martin: I believe for the most part that mutual funds, money managers, investment firms and so forth merely provide investment strategies or products conducive to the varying risk tolerances of their clients. I believe that the vast majority of these managers are conscientiously trying to perform to the expectations of their investors. No one has a crystal ball. Finding the investments or the managers that make the most sense is the responsibility of the investor. So it all comes down to each invester understanding their risk tolerance, how much they can risk and remembering that if they have to double their money in a year, the probability is that they are going to be broke in six months.
I didn’t start a 401K or any other retirement plan when I was young. Instead I started buying real money (silver coins) when silver was $3 per ounce. I continue to buy them on the dips. So far this has worked out very well for me. When the planned destruction of the US dollar becomes worthless I will still have real money that I’m sure will buy what ever I need. 2000 plus years of recorded history tells me that paper money always become worthless. The founders of this great country understood this and defined what money was.
Hi
I know very little about how brokers and pros make these decisions.
But I surmise it’s what they think they can bounce and take a quick profit.
Peter
I don’ have any particular program. Spend a lot time reading .
Well,from what morningstar says most of the funds dont do any better than the average investor.
While the fund pros may have more research tools available to them, they can’t move as quickly as an individual investor. If they (as a whole) were much better than the market, they would not have gotten creamed in ‘08.
In markets such as the current one, I would be very afraid to throw my $ into a fund.
For what it’s worth, I have some core holdings (dividend paying stocks, like BP) and I’m using momentum to trade the direction of more volatile stocks on the move. However, I’m prepared to jettison anything at any time. I don’t trust this market; foreign or US.
i WOULD LIKE TO BELIEVE THE MANAGERS REASERCHED THE COMPANIES THEY INVEST IN UNFORTUNATELY IF WALL STREET IS LIKE CANARY WHARF THEY GO ON STREET RUMOUR
professional managers of mutual funds must manage money differently the the average J. They must follow the prospectus of the mutual fund. Many, if not all, must be about 95% envested at all times. They have a difficult time managing to siddstep bear markets; but, individual investers can “go to 100% cash or cash equilivants or even bear market funds. It they are aggressive, individuals can leverage up in their winners byt managers can not. Individuals can sell short andmanagers can not. Individuals can buy bear market funds (in a famliy of fund with bear market funds in the family, they can exchange to the bear market fund, or use the rule of reinstatement into a fund family fund). Rish to the manages is the loss of alpha in a bear market and beta is how fast it is lost. Manager have little control over market risk, e.g.,declining alpha.
Mutual fund managers are constrained b the funds charter to invest in specific areas of the market. The differentiating components of their investments are in when to invest and how much to invest in a particular offering.
The biggest differentiating aspects related to brokerage firm investments have to do with the amount of hedging and market exposure or risk taken on in an effort to maximize profits. The component of the market not well understood by most investers is the market makers edge in the buying, selling or warehousing/optioning individual stocks. This advantage can lead to imbalances which are exploiited and an inherent conflict of interest regarding the stocks rating. Repeat after me AIG, Enron, Worldcomm, Lehman Brothers…. Brokers also have an advantage when it comes to a new issue or additional offering of new stock in a company. They make money via the underwriting or subscription fees.
Protection of capital within the brokerage/banking/insurance industry is usually confined to options or futures purchased as insurance against catastrophic losses. That is how the biggest banks and brokerage firms such as Goldman Sachs were able to protect themselves against the losses due to the Collateralized Debt Obligations (CDOs). Why the corporations such as AIG were not advised to do the same for a few percentage points and pass off the risk or spread it around is a mystery to me. Profiglate profits within these firms is obtained by their wiorldwide spread of offices tasked with boots on the ground sales of their products to corporations and individuals combined with their internal trading desks.
Probably it would depend on the fund manager. Some would do the research, some would “pull it out of the air”. I suppose only a view of long term past performance would give a clue as to potential profit or loss for a specific fund.
Your questions leave out so many facts such as age , amount to be invested, expected holding – long term or short term , other assets etc.. that responses are so varied as to be useless as any kind of guide.
As to the mutual fund mgrs– most follow the herd – 85 to90% can’t beat the indexes – most will tell you about the “system” they use –but then one finds some don”t even follow their own prospectus in their holdings and their expenses are high .
Find ( and this isn’t easy) a good money manager(not a stock broker) and pay him to do what you don”t know how to do .. agree on your goals and monitor his performance against the other market indicators.
Hi Martin
I live in Australia and so I guess I am looking at Aust brokers behaviour
I am sure they have distinct allocation eg banks, industrials, commodities and fairly strict percentages. They do a lot of research behind the particular equity because they know they are being held accountable for the results. As lay people we do not have access to the information they have.
Greg Macqueen
Background: I was 100% cash a year ago but moved back into stocks gradually as the market rose last year. Still, I am less than 25% into stocks at this time.
The way I plan to decide how and when to invest in the 5 categories you mentioned is as follows:
(1) Stocks: I plan to buy back more in 2010, no matter what the market does. A bit every month. By the end of the year 2010 I want to be about 50% into stocks. Pretty much all of it in form of an international index fund (keeping costs low and diversifying at the same time). I prefer international stocks to partially hedge against a potential further dollar decline.
(2) Gold/Precious metals: I buy on dips a relatively small amount and try to unload it again into heavy run-ups. I pay attention to the Fed’s policy. As soon as I see tightening by the Fed or as soon as the political climate indicates an end to massive government spending, I will quit buying into dips. Until then, the game is on.
(3) Energy and Natural Resources: I plan to buy some more solid dividend paying stocks in that area. With 7 billion people on earth, energy use will not go out of fashion.
(4) Foreign currencies/bonds: I plan to buy a bit more dollar bearish ETFs on dollar strength, but only in relatively small amounts. My main dollar hedging will be with foreign stocks.
(5) Bonds: I would buy bonds in 2010 after I see a sudden explosion in interest rates and if long term treasuries go up by a few percentage points. Otherwise I plan to stay away from anything but short term treasuries.
I have been retired for 6 years so my investing activities are somewhat different than the bulk of the population.
I hold about 30% of my investing funds in cash. I look at the intrest rates on money markets and wish they would improve, but I don’t think they will in the near future. Enough said about the cash portion of my investment funds.
What I look for is junk bond funds which have a long history of greater than a 10% annually. There are very few of them available at this point in time. Then I do the next best thing, I look for mutual funds paying greater than 10% and with a sponsering company that is highly recognizeable. A person must look long and hard to find these also.
After the above has been completed, I look for individual stocks that have a long history of dividend payments and with some growth possibilities. With some digging, these can be found. Again, they must be recognizable and listed on an exchange so as to be easily monitered. Those are the thrust of my investment criteria.
With those dollars that I feel I can afford to lose, I like to invest in speculative mutual funds and at this point in time, I’m invested in Brazil. I would like to buy a mutual fund that invest throughout South America. I haven’t been able to find one that I’m satisfied with. I also, will invest in U.S. companies if thier stock prices are at historic lows for the last 5 years.
Most go by the ‘book’. For fund managers this is spelled out by the fund regulations. For others it is generally accepted rules for capitalization variations and/or sector coverage. I do not see much creativity in this area.
I believe most Wall Street brokers push stocks they or their boss wants to sell. Usualy poor investments, or downright poison. Probably most Mutual fund managers base decisions on what they have been taught, i.e. what worked in the past. They don’t spend alot of time looking at the realities of todays political economic situation, or choose to ignore it. Mine still thinks long bonds and treasuries are ok, but i’m having him sell any funds that have those in them anyway.
I’ve been disappointed by the high charges and low returns from the UK funds I was invested in, so now I’m doing some of it myself. I’ve taken strength from your very informative emails, and as a beginner, I try to keep it simple. 40% defensive stocks that have exposure to as many markets as possible and pay decent dividends, 30% cash, 20% gold and 10% on anything else I fancy.
I read or review a number of sources for suggestion of the stock(s), industry. or investment classifications. Individual stocks or industries must pass a fundamental analysis. I am not a mutual fund investor, as I tend to feel the industry is over populated with so called experts looking for large total earnings from a of lot retail investment . A small gold and silver investment is based on ETF technical analysis (follow the trend). International diversification in the past has generally been through USA Multinational companies and let them worry about exchange rates. My investment in commodities has generally been based on profitable companies dealing in non-renewable resources.
I hope this helps.
Sincerely
Bob H
I believe that the mutual fund managers don’t have a clue. when the market goes up they also go up, and when the market goes down, they follow. It is the rear fund that bucks the market, especially when it is on the way down. Usually , they take a big position in one area and hope for the best. Then every quarter they seem to want to get the stocks that are HOT.
The only Mutual funds that I own are those that are part of some given list. This follows the market just as well as those with big computers and high hopes.
Please don’t laugh. In the very near future…hmm… less then 6 months. An amount of money will be heading my direction.
For someone who never invested I see investing as having a new born as the same. “Who” do you trust and how do you take care of it and not let it pass on.
I am educating myself as fast as possible and with many resources…your being one of the main ones and the other from a gentleman I trust with my newborn kid.
Domestic unclear…International – the goverments are unstable. Natural resources best investment for the moment…reason. Look what China is doing globally. I don’t believe any country who’s currancy is climbing will take the lead and expose them self like the US dollar has internationally.
How much: 10% in gold. 15% natural resources. at leat 25% on hand. bonds that is a tricky one…still learning on those.
I supposed that they have all kinds of charts and analysis. But, they still are looking in the rear view mirror to make their prediction. In a lot of respects it’s a flip of the coin.
I feel mutual fund managers receive a certain number of darts that is determined by the % of fees they charge. These darts are then thrown at some issue of the Wall street Journal { not necessarily current } to determine their purchases and sales. Their bosses have a special monkey that was rescued from a medical lab and the monkey uses a MAJIC marker for their decisions. So, a sharp point and majic.
No bonds. 10% gold and silver.
I follow Larry, Sean, Tony, and Claus’s advice as a VIP.
Of all my liquid means I am invested with
- 97,5 % in bullion (kilo bars and 1 ounce coins)
- 2 % in stock (gold and uranium mines)
- 0,5 % in cash,
and I am not going to change this, “come what may”…
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
The behaviour of the large trading houses is greatly reflected in the COT report. This is generally exactly oposite to the small retail trader. A less palatable behaviour of the large funds is their ability to move the market with enormous positions. While this has only limted utility in the longer term their aim is to generate enough movement for them to hunt the stops of the small retail investor. It is however a very mechanical affair, with little gut feel or gambling going on. The risk calculations are defined and the portfolio is constantly being tuned to maintain a neutral risk level.
Mutual Fund Managers begin with a strategy of what they will invest in, i. e. large cap/small cap or growth/value or type of bonds, commodities, or foreign stocks. Then they do the due diligence to find attractive “investments” in their strategy. However, they don’t deviate from the strategy, usually, so if a particular market tanks, or the whole market tanks, the fund tanks! So, what I’ve learned is that the typical buy and hold investment strategy with a diversified portfolio will not work anymore. Also, finding out whether a fund manager is bullish or bearish on stocks is also important. If they believe the trend is up, they’ll let stocks fall quite a bit before going to cash or shorting stocks. I don’t think you can “park” your money like you use to. And I have trouble trusting Money managers enough to pay the big fees they want.
No Bonds. 10% gold and silver.
I follow the VIP advice of Tony, Sean, Larry, and Claus.
Hello Martin! Must admit I am and know I am over weighted in health care and the energy positions. Answering your questions, I am sure wall street brokers and money managers have access to much more information and more experience at what they are suppose to be doing than I have. I do subscribe to four newsletters, but must admit confusion abounds. Still looking for real meaningful information with a proven base of accomplishments. As far as how much to allocate, it is just a hunch I have had for some time which I have gleaned from reading books, magazines, and newsletters. Any information appreciated.
I don’t agree that all fund managers shoot from the hip
The good ones do have a trading system and do their home work. Their system may be historic statistical data, like some of your work and mechanical Trend trading (Dunn Capital Management,Dolphin Capital Management)
Investment is not a part time fun game. Its deadly serious, with lots of hard work and sometimes heart ache.
I would hope that they are analyzing market trends and investment charts but I would guess that they are trusting instincts the majority of the time.
my understanding with mutual funds is that they divide everything into persentiges, ie 10% into a particular sectors an no one stock makeing up more then 10% within that secture. However I don’t know of many that actually make money.
I think the Mutual Fund Managers use the following :
Favourite companies that have performed in the past
Charts & Indexes for past and future performance probabilities
Dumping stocks that the ‘crowd’ don’t favour
Mutual fund money managers make their decisions probably based on , interest rate, prices of commodities, housing starts, unemployment, stability in the market, and then how much they can personnaly gain from handling your money, and lastly having a “cover their ass strategy if things go wrong”
Non of the above
Our finances are invested in positively geared real estate,each property returning at least 10% with and average of about 5% cap gains.
Our cash is in an offset account at 6% but is readily available for other investment
opportunities should they arise.
Initially, I believe that they attempt to do a fairly extensive analysis of the investments related to their fund. Over time, they slide back to “I know this environment and my selections will be as good as anyone’s.
They weight the investments by which ones they believe will do the best, down to the least which they only include because the world at large would assert they need that segment of the arena covered.
I think they believe that they have tested, reliable ways to structure their portfolios, but that no ’system’ works in every scenario; and that those allegedly reliable methodologies will ultimately result in huge mistakes. The only way to win in the market is to stay flexible and to constantly adjust your investment.
I believe the experts use a system to allocate funds. The systems used may minimize risk but in general are tied into their own profit motive.
I buy anti-dollar assets on pull backs.
They are governed by their charter and the calender. After all they must present a profit picture sometimes at the expense of what is prudent. they are governed primarily by the short term solutions.
Years ago I did a research project into this question and the data surprised me – most used charting. Those who did try fundamental analysis – I say try – tended to justify an approach or a gut feeling. Which was the winning way I never found out.
I have also done research into ‘fixation’ at a cognitive level. The result there would not surprise. In one word ’sheeple’ – most follow the leader. Global warming is a case in point.
So when all is said and done I believe you follow your basest instincts. That does not mean you have to feel right about an investment but rather that you do what you do.
If patterns are your thing, you do patterns. If you follow, you look for someone/thing to follow. If you are chaotic, you act randomly. The only common thread is that you justify your ‘methodology’.
Lemmings rule, OK!
Right now I have 90% cash. The remaining 10% is invested 35 percent precious metals Palladium is about 75% of that then gold and siver. I have some stocks but never more than 2% each totaling about 10% with tight stops. The rest are currency ETFs both bull and bear. Oh yeah bought some FXP last month, we’ll see how that pans out toward the end of the year.
Hi, I enjoy your news letter. My wife and I are currently investing in;-Various ETF’s,
Tax Free Munis, Energy stocks and foreign C.D’s.(Australia, Brazil) and some Telecoms.
Unfortunately, we feel there is a degree of Market Manipulation going on, short selling, etc.,
by Big Money. This makes it tough for the small investor. How the fund managers make their
decisions, we have no idea.
Keep up the good work.
Gut instinct. While I believe in diversification, I can’t accept the standard formulations re:
stocks, bonds, etc.
Martin if there truly was a successful way to allocate your assets why is it that of the 26,000 plus money managers, only 10-15% of them ever make money? Is losing your money considered safe? Why didn’t those money managers simply stick their money in the bank?
If asset allocation is necessary why to currency trading firms *successfully* put all of their eggs in the one basket?
And when was the last scientifically tested study on asset allocation compared with a successful trading methodology in a single investment class?
Most of the studies I have seen are decades old and don’t take into account unprecedented events like the financial crisis. And even those models don’t produce results that would help the majority of investors retire comfortably.
I’m guessing that looking at the performance of most of your newsletters that Weiss has not found a solution to the problem either. Even Claus (despite the remarkable job of your copywriter) lost on every single trade in your million dollar portfolio. How do you explain that?
They guess and position their reco so they benefit more than their clients.
Of course some pros use academic tools to manage portfolios. See Peter L. Bernstein’s “Capital Ideas” and “Against the Gods” for details. Others buy comfortable-looking stocks like Coca Cola. That way if you lose the clients will blame the stupid market and you will keep your job. Others use logic, detailed analysis, and long experience to pick stocks, taking the chance that a bad year will hurt their popularity. See Claus Vogt for details.
Yes, the rest of us use gut feelings. That is how all of us make important decisions. How did you chose your spouse? Nature gave us the ability to make judgments with incomplete data, and without being conscious of all of our thought processes. Yes we make mistakes. But we learn and grow. There are no rich computers.
I’m sure they all have a system, like pin the tail.
I think the averagr joe could do as well or better with some education and a little work
Per last week’s question: I do not have a system.; I am currently studying and listening to see what makes sense to me. There is a lot of information out there to digest. It is not my style to leap. I need to feel that I understand what I am dealing with. You have helped tremendously with that. But not everyone in your group has the same opinion.. not saying that’s bad… I’d rather that than everyone following like sheep. Example- Tony and Claus seem to differ on China. They both have their rational and I need to decide whom I most agree with.
As to this week’s question; I believe that most managers follow the herd and do not spend the time to or know how to evaluate investments. Finding ones that do and truly understand the ins and outs is what I’m looking for.
A team of businessmen came to town including Zig Ziglar and others. They have offered a program to help me learn to recognize trends and plan my investing using strategy and apportonment for growth and diversity.
First, let me say that I am small fry and all my trading is done through an IRA account which imposes limits on what and where I can trade (e.g., can’t trade options). All “foreign stocks” (for me they still have to be traded on a U.S. Exchange) are strictly by recommendation from an expert like Edleson, Sagami, or Brodrick. And even though I get their recommendation after their high dollar subscribers, stocks they have recommended have done well for me. I lost far too much for me in the initial months of the MDCP so I have become very cautious with it. I have a small amount of silver metal, no gold or platnum. I do have ETFs such as GLD and SLV that hold these metals and I have some mining stocks that before this week were doing well. I have some holdings in Chinese stocks, kind of heavily on the side of pharma and almost all of those have done well. I am currently moving to resources/commodities through ETFs or a few oil/gas stocks and their infrastructure. I have a small amount of emerging technology equities (U.S.). I am 70, so something that will pay handsomely in 10 or 15 years does not interest me. And I cannot afford the high dollar fees to get some of the advice your firm offers, so I am limited to the less expensive services. At the current rate of ROI, I would be two or three years just recouping the fee.
I am concerned about whether we will have even a viable nation in ten years with the current fiscal policies.
Mutual Fund managers? Wall Street? I keep thinking about that movie ‘Wall Street’ greed is good and all that stuff and I think it portrayed Wall Street pretty good. I have little faith that Mutual Fund managers or Wall Street worries too much about the average investor. That said, I am stuck with 3 Mutual Funds.
MJH
Hello Dr. Weiss,
I have been a gold and precious metals bug for 35 years. It appears to me that this approach is more valuable now than ever. I have the majority of my assets in metals and energy, with a small amount in counter -market funds in within ETF’s, and a small amount in cash. I know I should be more diversified, but hesitant to put anything in most of the market now. I am being vigilant and see how this tricky economy plays out and am able to change course as needed. Thank you for your advice and perspective. Ed Stewart
I suscribed to your million dollar portfolio,
I read everything you and your staff write.
I read several other reports.
watch to see consistency or lack there of.
I am in the gold industry and at a producing
site so I naturally lean to that sector.
My basic mind set. If you don’t grow it, manufacture it
or mine it you are just swapping money. I watch carefully
and tread softly because it can change on a dime.
I worked in The Financial Planning industry for 12 years. What I saw was very interesting:
The “Fund Managers” are hired/ fired and bonused based on their funds performance. They gain or lose reputations and money if they make poor decisions. Generally speaking there is research that goes into their choices, but MOST all fund managers along with the Advisors in the field still “hang their hat” on the idea that you have to stay in an wait it out.
Financial Advisors at the “main street” level are much more personally driven. They get commissions or fees based on how much you invest with them…so they will try to talk you OUT of pulling your money out of the market. They too will go with the standard response: “It’s better to stay in it for the long haul, and don’t worry about the ups & downs.” But the worst part is, they spend very little time watching YOUR money and alot can happen “over the long haul”.
I personally don’t stay in it for the long haul all the time. I believe that with some investments, you need to watch and change as necessary; ESPECIALLY in a volatile market like today. Keep on top of what is going on and happy trading!
Hi,
I believe many Fund Managers (or those closely linked to those funds) are most likely either a) young inexperienced MBAs with little investment experience, using theories from school to allocate millions of investors money while they learn their trade, or B) old hacks that have been doing it for years and have lost the desire to carry out real investigations and as such just follow some investing standards to try to avoid loosing investors money.
However, I also believe there are some PROs out there (such as yourself, Larry, Tony, etc) that do the real work to try find the optimum investments.
Denis from Ireland.
I am not quite sure exactly what to do.
What i am sure of is to read, get advice, and try investing myself.
All of the FINANCIAL ADVISORS and people that i have used in the past has allowed
my mutal funds to take the full weight of both the up and down girations of the market
no {hedging } so i am always loosing.
Yes, I do believe investment professionals have systematic methods and practices for evaluating markets and sectors for investment oppportunities. I am also of the belief that rarely do they publicize their best opportunities.
Brian K. Miller
I think a lot of people just extrapolate an existing trend.
As for me, I am in cash and a bit of precious metal. Mostly cash. I see massive deflation before the hyperinflation hits.
Answer to question #1: If the man on the street is speaking of gold and other precious metals, those markets are near a top. The man on the street is primarily speaking of gold and precious metals while also criticizing real estate. Therefore, real estate is my primary focus for investing.
Answer to question #2: Given the heavy promotion of gold investing, that will be a zero value in my portfolio. Given the problems with the American dollar, bonds are definitely out. With all the negativity about real estate, I’m focused 100% on that market.
I have no formula for investing. I am 100% in Treasury and municipal bonds. They are rather long term but of high interest rate. As the rate is so good I don’t worry about a drop in value as I am only concerned about continued interest payments. A number of my bonds have matured and the cash is sitting in180 day treasury bills until the rates go up again.
Question 1. By analysing a number of key independent managers comments and ‘trying’
to formulate a decision based upon concensus views and my ‘gut feelings’ Today I was
disturbed for the first time to find wide diverging information about one Absolute Fund
from 2 of my most utilised managers.
(1) no specific formula and guesswork! For example I have had concerns about the EU
where there is suspicion that some countries may not be forcing companies to mark to market. Also whilst there is considerable research on say BRIC markets and say Asia
Pacific ,there is much less upon specific constituent countries and sectors. I have in depth experience of South Africa yet, I have seen very little international comment upon
their electricity supply situation which is vital to the economic success of the country.
(2) treat gold and precious metals almost as currencies
(3) believe there should be a division between the energy sector and natural resources
sector. Whilst crude oil is easy to track, eco energy sources are not. Simple personal tracking over a period of time and reading investment commentary.
(4)fx is a task for 100% professionals and even when I was working with a large fx team results were all over the place. Not for me unless crushingly obvious opportunity
(5)by reading and commentaries. Steering well away from Government Bonds for 2010
with focus on BB+ Corporate Bonds.
Question 2 : Pure guess work based upon spreading risk and taking more risk with a small percentage of the portfolio. I have Risk Management experience.
GENERAL
Overall little use of systems and reliance upon impression gained by limited research
but maybe I am not accessing the best information.
Yes, I am well aware of certain advisers trying to ’steer’ investors into stocks which certainly assist the advisers objectives and have scant relevance to the needs of the investor. Yes, I am a cynic but perhaps not surprisingly as I have worked (not currently)
to track down errant advisers who have mis-led ( and more ) their customers.
Graham Chrystie
The number one goal is to preserve the asset base. Generally I am a contrarian and tend to do the opposite of the loud advise we are constantly seeing from the mainstream financial press. The two biggest inflluences I actually follow are Money and Markets and “Wiskey and Gunpowder” a libertarian blog. Keep up the good work Martin you have helped me tremendously in the last couple of years. I consider myself fortunate to have had your counsel when it was most needed!!
We are watching to see what will happen in the near term. We are interested in cap-preservation. What should we be doing under the circumstances?
1.I do not have a tried system and I try to review a variety of inputs from all viable sources/experts. Morningstar. Fidelity, motley Fool etc.
But you know that I end up more confused and undecided.
2.This is the crucial part, the dis,tribution, it almost seems that gold and silver are the only recourse.
John
Martin, Q#!-before I invest I get as much pro, con, & neutral info from as many diverse sources as possible (I give greater weight to “under the radar” info as opposed to tv blow hards and pro sales pitches, etc.); I think not once, twice, but maybe a dozen times to come to my own sense of direction before buying the stock/etf. High priced gold positions I can’t afford and are too risky. Energy & natural resources are obviously overplayed & overpriced, so no at this time. Foreigh currencies? too much study required for high risk and low profit, it’s only for pro’s or pro advisors – I’am not paying. Bonds? You said it best of all – - they’ll be a future heartbreak. On last Q, the mutual fund mgrs – - most, like most etf’s, will do worse or only as good as their indexes, a few will be lucky, and some very few will bat high because of assidous dedication to fundamental/analytical/cyclical analysis and or deep trend research. For me I have to scim for nuggets here and there and pan for some hard time gains. Overall I think your group is overvaluing China & India, commodities, emerging mkts – - leaving behind needed research on how to etf short these large beach ball soap bubbles with some inverse bear etf’s / strategies. If you breakout in this direction I’ll come back on board. Still, as a long time former subscriber my retirement in intact thanks to your advice. For that alone, it was worth the price of admission.
I think that most of them make decisions influenced heavily by emotion – specifically, social mood moving alternating between optimism and pessimism – and rationalize their behavior being due to outside events post hoc. The Elliott Wave advisors present a lot of compelling evidence of this. Why did the market go up in the months after September 11th? Rationally, it should have gone down…
I don’t have anything to invest. I have a lot of real estate in tourist area that I need to move. Only then will I be interested in investing in gold, foreign things, inflkation proof stuff. I am just reading now to be informed about what i going on. The basics are bad. currency devaluation will more than wipe out $gains.
The evidence indicates guessing. Nothing else could result in most producing lower returns than their respective index funds. Ron
I think they use the sme wys they hve been taught to use
always also they follow what the consensus follows.
I dont think they are there to make you money only to make money for themselves.
Hey Martin: Look, they’re in the business to MAKE MONEY for themselves primarily. Sure, they have sophisticated software analysis systems(hundreds!!)to determine the SECRET answer to their investing genius, but just like all of us, at best, it’s an educated guess…if you are willing to do the grunt work! I, personally, do alot of reading and watching the current tides and trends. Then, I use instinct and and a good educated determination….and hope it’s on the right track. The “Oracle of Omaha” is a hoot. One of the better mutual funders(& etfers), I think, is Vanguard.
I try to balance between domestic & foreign
20% precious metals
40% gas & oil
no foreign currency although I do think that the dollar is going to be demolished
no bonds
due to a number of natural disasters around the world and here at home
I do think commodities should be a factor but I don”t know how much to invest
I buy international stock (40%), domestic (10%), gold ETF (15%), energy (20%) and financial (15%). I don’t buy any bonds.
I try to balance between domestic & foreign
20% precious metals
40% gas & oil
no foreign currency although I do think that the dollar is going to be demolished
no bonds
30% cash
due to a number of natural disasters around the world and here at home
I do think commodities should be a factor but I don”t know how much to invest
I put about 30% in gold and silver, 30% in resource stocks, 30% in hedges and 10% in cash. I take several economic newsletters as well as keeping informed about the political situations in this country and around the world and base my invetin on this information. I think that fund managers do much the same except on a much larger scale.
After listening to Dr. Weiss, Cramer (yes, Cramer does advocate “do your homework”) and others, I do my own research and background investigations to decide where to allocate my money. There are great resources on the web to get the research from Morningstar, S&P, company’s websites to even something as simple as MSN money’s website. If I need further help with items such as alpha, betas, r-squared values orother company research, I check with my Ameriprise adviser and some of my old financial analyst friends. I DO NOT listen to the pundits on TV or in the newspapers as they are often touting things that either you need special strategies to take advantage of or are advertising equities/sectors that have already run up.
As to percentages to allocate per market sector, I use the age-adjusted allocation formula as my starting place. I temper this with what my long-term investment strategy is coupled with how my portfolio has been doing for the past 3, 6 and 12 months. I regularly look to reallocate if necessary to take advantage of emerging trends, but I am not a day trader, as making large amounts of trades is a sure way to lose on commissions.
I’m assuming that fund managers still use their research department to ferret out fresh opportunities, but I also realize that a lot of their time is spent chasing the other fund managers, what’s “hot”, and what seems like it can make a quick buck. If I listen to any fund managers, they are people that have a MINIMUM of 5 years tenure, if not more and have proved themselves in both up and down markets.
Hope this helps explain some of my investment perspective.
Best,
M E Brown
I do not consider myself a sophisticated investor. That is why I value what Claus Vogt says so much. As an engineer, I appreciate his systematic and logical approach, his “gut feelings” and his method of spreading one’s investment dollars over a wide range of instruments. I follow his suggestions precisely and it appears to be working quite well.
I have been investing since 1972. I knew then and I know now I do not
have a clue when it comes to investing. I have tried a lot of investment services, and mutual funds. I read that 85% of mutual funds and investment advice service perform worse than the overall market. From
my experience I believe it. It amazes me what a great record these
services have until I join. I seem to bring them bad luck. A lot of the
services now are traders not investors. The market has turned into a
big casino. I have a friend that only buys stocks that are going up when
the overall market is going down and only holds them for days or weeks.
He has no interest in doing any research. He made a lot of money last year. I wish I had his courage. I will continue to muddle through.
the managers pay for insider info thats how.
Most fund managers are concerned with the short term performance of their fund. The short-term perfomance minded manager tends to buy into trends, thus putting the client into overpriced stocks, reinforcing the trend until the fundmentals overwhelm the trend.
As for wall street brokers, it really depends on the favor of the month, is the broker working for the retail investor or the clearinghouse. My experience is that most wall street brokers are working for the clearinghouse.
Now, to answer the question. If you have the money you can buy the analysis to make an educational decision, if you are without money you are flying by the seat of your pants even if you are on the right side of the trend.
I read everything I can get my hands on and generally wait too long to make a decision. Information overload!
Hello MARTIN. How are you, MARTIN? That’s how your recent capped first-name email screamed out. It sure did get my attention.
How do your readers invest? Hmmm. After just pushing your recent book about surviving the next great depression (which I bought), you did an about-face to profit from the seven month rally. That’s OK. We all just ignored your book in order to make some money.
While you are in this bullish “invest” mode, unbeknownst to you is 1) the quiet reversal of the USD which is set to rally back to it’s early highs, 2) therefore, the inevitable decline in gold (yes, you too have joined the gold bugs), and 3) the beginning of a collossal decline in equities – not a crash, mind you, but a long-term decline to at least the March lows. and probably a lot lower. The ellioticians have just announced the beggining of the dreaded third wave down, the sharpest and most severe impulse wave of them all.
The social mood in this country has deteriorated to such a degree that we have recently seen by the victory of Scot Brown, an almost all blue state beome an almost all red state. There is now turmoil in Washington, due to the 60-vote rule, and the sovereign nations are tightening credit and beginning to shun the greenback (which might be the only plausible rationale left for gold).
Bottom line: you were right, there is a depression coming. But now is the time to take advantage of the previous rally to get out of the market, not the other way around. There is trouble ahead for investors. Funny that you have been lulled to sleep by a second wave (the nature of which is to make true believers of us all). The very same bear market retracements occurred during the great depression, unfortunately causing many investors to believe “the worst is over” scenario. Now we have talking heads that turn on a dime depending on which way the DJIA winds blow.
So much for your readers’ so-called gut reactions. It’s nothing more or less than the same old herd instinct following the empty-headed talking heads. You are smart enough to know that the crowd is usually wrong, because without clear vision the blind are simply following the blind.
The market has veered in the direction of small caps, just looking for quick profits, cheering the defeat of health care reform for the poor, wage growth for struggling workers, and the defeat of efforts to develop natural gas as an alternative to the oil controlled by radical lunatics in the Middle East. The amoral blind cheering the amoral blind. Wonderful!
I have no suggestions. I’ll choose liquidity in a heartbeat now. Let the world go to hell.
The issue, once again, will be protecting what one already has, avoiding loss.
I invest with a stock club group. We do research on the stock from the internet
after deciding as a group whether to add to our portfolio or to put additional money in a stock we already own. Personally I watch my IRA portfolio as does my son, but do not add anything but rebalance and reallocate based on his advice Bob Mack
Martin – If investors should have a system, it is even more important that advisors have one. I’ll take a stab at your second round of questions.
Mutual fund managers are hamstrung by the prospectus as to type and style of investing. Some funds suffer style drift so may not be investing as advertised. Others become so big they are no longer nimble enough to respond to market shifts. But fund managers get paid no matter what the market does. So it is not their job to say what is right for any investor – - – that is up to the investor or their financial advisor.
Wall Street managers or brokers are even more removed from the personal investor. They are more like wholesalers and paid to deliver dollars to their product sponsors. They work for the sellers, not the buyers – - – so caveat emptor.
Rule #1: If you don’t know what you are buying and why, then don’t do it!
Rule #2: Determine what you are trying to accomplish. This is often the hardest part. Get specific, the more exact the better. A vague idea is not a goal. This is right out of Steven Covey and great advice: Start with the end in mind.
Rule #3: Set time horizons for your goals. Some may be immediate, others long-term. Then divide your money into “piles” and invest each accordingly. Your plan is thus the sum of the parts.
Rule #4: Now that you’ve done the heavy lifting above, engineer your plan to fit your goals above. But don’t forget risk and ask yourself how much you are willing to lose before you sell or change your plan?
Rule #5: Educate yourself (back to #1). There are plenty of concepts anyone with a 10th grade education can use like modern portfolio theory, beta, alpha, co-efficient of return, fibonacci tools, P/E, dividend history, earnings growth, etc.
Rule #6: Decide what it is that you believe, then act on it.
Will you always pull this off? No, but there is no way to adjust a plan without having one to start.
I’m a very conservative invester and am retired, so I basically follow the instructions from your Safe Money and Real Wealth reports. However, I am daily bombard with advice from numerous other financial organizations which sometimes agree with Weiss’ viewpoints and sometimes do not. I generally do not follow such advice. One item that I ran across is that, due to the Patriot Act, Homeland Security can legally stop a citizen from removing valuables from safe deposit boxes at banks during an emergency. They mentioned money, gold, silver, and jewelery; your advice has always been to put such assets in safe deposit boxes because the government does not own those boxes and therefore cannot prevent citizens from accessing them. Can you explain the contradiction? I think I might have subject acticle on file.
Martin:back in 2001, I began buying gold and silver mining stocks,by 2005 I had added gold and silver bullion, and currentely I am 19% cash, 64% gold/silver mining stocks, 7% energy stocks and 10% gold/silver bullion. I get my information from BNN television( busness news network Canada) web sites like kitco.com howestreet.com and Weiss research etc. I have studied the markets from the 1970s-1980 and also the 1930s for clues and similarities to the current market, Thank you for your info.
I must say that I read a lot of articles that come into my e-mail including the ones that come in from Weiss. I read a lot of articles about what is happening around and can understand all this news with a lot of passion as I have had my education and work in the field. Then I make my investments as follows:
1) I know bonds is not the place to be in right now because interest rates are a complete rip off right now f you factor in the inflation factor and taxation. We all know for sure that the tables are going to turn pretty soon in this area and I knew that way back in January 2009. So I went long (10 year term being in Canada unlike in US where you guys enjoy 25-35 year term) on my home mortage which came in at 5.25%, liquidated all my bond investements and went 100% into stocks – 90% Canadian 10% US. Everyone thought I was absolutely crazy signing a mortgage at 5.25% for 10 years when the variable rate was 2.4% and getting out of bonds into stocks when everyone was getting out of stocks into bonds. When the timing gets right for bonds again I will correct my position and get back into bonds 30% stocks 70% but I will have to follow my e-mail articles and keep my eyes open to what is happening to rates to reverse this position. But I will never come to less than 70% in equities because this is where money has to be made if you are a value investor and buy the right stuff at the right price – like Warren Buffet. For example if you have bought MFC common at c$9 does it matter to you if it goes to 20 or 40 as long it keeps paying dividends? Now if it comes back down to $9 or lower I would certainly consider dollar cost averaging down. You can say I am a contrarian but that is the way I am. I like to value invest in quality companies and keep my positions regardless of how high the markets go. I do not believe in Drips but the dividends that I get I would keep for investing in other quality stuff that would present itself over time.
2) I have big problems in making short term plays. I keep my eyes open every time Larry talks about resource companies and shows me 500% + gains in some short term positions. I have big problems with that. For example I do not have a clue of what LIHIR is or what is behind this stock. I know it is a play in Gold but I have a big problem with these exploration companies – they are a bunch of cowboys. I fell very uncomfortable in making these kind of plays as I do not know where they could be headed- yes 500+% now but could get to be 700-% if some mining assays come out to be unfavorable or some idiots like Hugo Chavez come to power by some overnight coup in the countries were these companies are doing their exploration.
Been doing this for 40 years.
I do not track any segments in particular but rather try to judge the trend and current
status of the market mood for all the market segments.
In the end no large or small investment organization can escape the consequences of
the overall trend and most times are caught up in it themselves. I find your observations
to be very helpful not because they are always right but because of the light you shine
on the nature of what is happening. I sometimes agree and sometimes
not but it is always thought stimulating and helpful.
Many thanks for a great service
Dear Martin,
I rely heavily on Elliott Wave ( R Prechter) newsletters: Theorist, Forecast, International. I also use my accounts with Weiss: Dividend Superstars, Asia, and the Contrarian Portfolio. Dent reports also play in and for the most part confirm Elliott Wave.
With all the above digested together, I make my investment choices. Generally I’m consistently in the green with the exception of the Weiss Contrarian Portfolio.
Cash preservation is primary right now….T Bills. Heavy on Asia … I pick dividend producers. Energy sector (trusts producing dividends) , some gold ETF, and last cold cash stashed at home. Percentages fluccuate based upon what I see and read. Generally I am avoiding USA equities.
I watch what we have still cooking in annuities having a sizeable portion of our retirement there. Right now I feel OK to stick with them there….but that could change. I would not hesitate to cash out and invest that somewhere else (?Asia) if it seems the better option at a later date.
We have sold our homes, cars and much of what we own, and currently are residing in a third world country. I add that, because that plays also into how much we have liquid and where we choose to live to reduce cost of living. That in itself frees more investment capital for the future
Seems strange an old hand like you asking this. The Money managers will have objectives and targets set for them by their clients, They will get together in teams and using the resources of their employers and look for trades that fit the target set. Insurers want low risk and stability as they will have to pay out in a crisis, wealth fund managers may have other targets etc etc. Their employer will have a range of software tools to analyse every transaction, and they will have the advantage of multiple screens, and in house interaction with others. I don’t suppose they are all particularly great. I worry about some of the so called top London firms, I am sure Wall Street is no different. If you are managing someone else’s billions do you care so much about the detail? Like smaller investors can. In England the brokers I talk to seem more interested on the next shoot on so and so’s estate. The best of the best sit on their own seat are experienced like us small investors. They are as good as their next decision. They use the brain God gave them combined with good training and experience and take good rewarding decisions. I don’t have a lot of experience of Mutuals the only big mutual I know is Lloyd’s of London, they are a bit out of fashion here, but a US non domicile friend of mine relies on his income from US Mutuals. I am not as good, I run 3 businesses, and need a little guidance. I have bought the software, and subscribe to a good broker, I hold no less than 20 stocks in each fund I run for myself, and and its taken me six years to increase my capital by a factor of ten. Rubbish really.
Mutual funds are mostly targeted to a specific goal (e. g. lg cap, sm cap, etc) so in that sense they aren’t allocated per se, but diversified within there own category except of course for asset allocation funds.
While they do minimize risk to some degree, they also suffer market risk and in that sense it really doesn’t protect the investor much. And asset allocation funds seem to have an inherent poor performance. Just my opinion.
I’d rather invest elsewhere than mutual funds for the most part.
Dr. Weiss, You list Citizens Bank & Trust Co., state LA as one of the weakest banks in the country. It would be helpful to identify the town as there are a number of Citizens Banks in Louisiana and this is a disservice to those health, well run banks. Can I get some clarification. Ed Middleton
47% bonds, including tax-exempts; 20% domestic equities; 17% foreign equities, including emerging mkts; 5% real estate; 7% cash; 4% gold and other commodities.
Hi Martin,
I am currently overweight in gold stocks as I believe gold will continue to soar. I am sure your analysts at Weiss Research believe the same as well. In terms of allocation, as I am a very small (micro) time investor with a capital not exceeding $10k, thus it would be extremely difficult for me to apportion those funds appropriately, hence I am either 100% invested or not. The portfolio in your newsletters are usually based on a capital of $50k-$100k hence it would be much easier to manage and in the case of gold stocks, have extra cash to buy on the dips based on current gold’s volatility. It would be of great advice if you/your analysts could provide some insights to small time investors with limited funds like me on how we can manage our capital better, bearing in mind commissions incurred will essentially wipe out our profits or turn into a loss immediately should be take too small a position!
I use charts to tell what markets are moving, at what pace to decide what to buy and when to buy and sell. I derive the allocation based on money flow.
Peter
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
With reliable charts showing history of trends, and with experience and knowledge.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
Tested charts which help in maximum profits.
45% bonds, including munis; 22% domestic equities; 18% foreign equities, including emeging mkts; 8% cash; 5% real estate; 2% commodities, including gold.
1. I have changed from more standard and conventional asset allocations due to the instability of the current market and what the Feds are doing to “fix” our economy and banking system. I have decided on the following allocations and how much to invest in each by primarily use Weiss recommendations and information. The percentages reflect my feelings about what will keep my assets as safe as possible. I will also try to keep my investments in dometic companies to no more than 30% of my portfolio because our economy will probably be pretty flat over the next few years. At the present time, I have about 50% in cash, 20% in gold and silver, and 20% in various index funds, and 10% in international equities and ETF’s. I am working towards an allocation up to a total of 50% in commodities (gold, silver, gas/oil, energy companies, mining stocks, agricultural companies and agricultural commondities to protect the value of my $$. I primarily use recommendations from the “million dollar contrarian portfolio” (Martin, Larry, Claus, Tony). I also read many other analysts to get a feel for the direction of the market, sectors, etc. I now tend to follow pundits and contrarians because I think they are the only ones giving investors the real facts.
I think fund managers use models and analyst research and plan to buy and hold for the long term. The problem with today’s market volatilities is that holding for the long term wipes out any gains that have been made and maximizes losses when the market tanks. I personally lost 45% of my portfolio due to this “hold for the long term mentality” of the persons managing my retirement account. I am retired and do not have the long term remaining to recover my losses. Any financial planner, broker, or fund manager should be cognizant of their clients positions in terms of age, risk levels, and asset allocations. I question why fund managers do no place stop losses or set up hedges to protect their investors. They are paid huge sums of money to manage our funds, but they probably sit back and pray that they have made the right moves and the market cooperates with their strategies. I now spend at least 2-3 hours daily to stay on top of my portfolio and to give directions and strategies to my financial advisor.
Mutual Fund managers use the internally and externally generated risk and financial analysis of investments that fit into their portfolio and parameters.
Up until recently I had an Investment counciler to do my investing because I haven’t done this befor. I do know that he was shooting blind because of my returns. That is why I’m watching you to see what a dumy needs to know about this. I have some of my money in a CD which doesn’t net any thing, but I’m not loosing either.
An interesting approach to some very difficult and searching questions; that’s for sure. I ‘beached’ a long time ago, buying into domestic rental property at time when N Ireland was in turmoil and a builder was over exposed, on a political fault line, with the net result being some 12 . 46 % gross return on investment since about 2001. I have other family property, including woodland, attendant with some tax advanages.
Enough about me; I am well aove the high water mark and watching with interest, as those with all ‘the brains’ watch helplessly and wait as their complex mathmatical formulae unravel before their very eyes – why – because they challenged the laws of nature of course and no one ever lives to tell that tale :)
As a retired Independent Financial Adviser / son of a farmer. I was for ever cautious – consolidating in turn and it has paid off in spades. I helped make some rich and watched as the greedy ploughed on and got roasted. Lawrence.
Mutual fund money managers and Wall Street brokers and pros make important decisions on some tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential.
While taking my Master courses for my MBA I was introduced to risk models. It seems there are risks assigned to everything. Risks seems to be also based on statistics. My understanding is statistics are based on historical trends. My feeling about risk though is it does not seem to be foolproof. If a new trend comes along or a unique product that has no history how can you asign risk and at the same time get people to invest in it. The risk factor would be set very high discouraging people.
There is a way to measure the volatillity of the market at a given point in time but to project the way the volatility will go in the future seems to be more error prone.
In conclusion, there are ways to reduce the risk of buying something in the market, but there is no way to eliminate all the risk. I believe most Mutual fund money managers and Wall Street brokers and pros rely heavily on tested, reliable ways such as risk modeling. But some of the best may also add in their “gut” feelings.
My investment in stock at this time is focused on shipping stocks. With the growth in China and India and the depressed stock prices in shipping I’m trying to research companies to invest in.
The reason I have not subscribed to your service is I’m an individual investor, retire, and trying to supplement my income.
Best Regards,
Wayne
I think that there about 15 or so people that control the intire market to a very large degree. People that are so infested with greed that they long ago gave up their souls . So playing the market with any plan or guidenience is and always will be a high risk game. I;m jist glad I got in to Fords at $1,75 But my preference is still US stocks. I am not comfortable with options as I as yet do not understand them. I also have interest in JAG. I do not know if this answers your question but here it is. gy
I believe at this time it is best to invest in natural resources and to alternative energy equally. All of the other choices are heading for a downfall hard.
The Mutual money Managers of course have certain ratios for investing in different stocks, but many mutual funds are not doing well for customers. I think they try to be
profitable for themselfs at first and than are charging their clients fees even thei clients are loosing.
Hi Martin,
thank you for your information which I have followed with interest. Living in Australia, I find it more difficult to follow the US suggestions, but generally find investing in WA
resources safest for me. The directions you give tend to follow through eventually to OZ
cheers, Jill
I have abandoned my regular assessment of a company’s stock for Value, as this country’s politics have destroyed the Dollar. I stick with gold and silver mining stocks and gold ETF’s. Even these are manipulated beyond belief. One cannot do other than follow whatever trends “big money” does to these stocks. If they’re shorting, buy low; and if they’re buying, find a minor peak and sell.
Normal criteria for selecting venues for investment are out of the playbook. Extreme caution is the watchword for these times.
Also, I refuse to short stocks and I refuse to invest in stocks in Communist or Totalitarian regime countries. This includes both China and Brazil. Why play with the enemy in China’s case and why encourage Socialist governments in Brazil’s case.
I think these guys have tried and tested formulas which adapts dynamically as their assessment of market conditions changes.
Problem at the moment is that so many credible experts have such divergent opinions as to where we are heading this year.
Consequence is that the money managers are essentially flying blind – they just don’t realize it yet. Those that make the wrong calls will realize soon enough.
Allocation, research and shoe leather
I’m sure the pros have time-tested methods they use and maybe some new ones. I am looking at divergences in price on the stock indices vs. the MACD indicator. As soon as the MACD tells me, I will be all in on the short side of the market.
I believe fund managers and brokers start with an education in economics and traditional money management . They focus on the mission and constraints of their fund and gather data, charts and graphs relating to their available investment options. They surmise what role the political and economic climates will play regarding their options, and of course, look at how best to make a profit for themselves while satisfying their clients. So, Yes, I do believe they have a tested and possibly reliable way of structuring portfolios given that they have properly assessed the economic climate and the probable actions of Washington bureaucrats.
I want to invest insectors i think will do well, and yet be somewhat diversified. I plan to invest 20 % in each sector i have confidence in. Twenty percent is enough to do well in a sector. I plan to avoid any investment that would only be profitable with a stronger dollar. My plan for the portfolio as market timing allows:
20% PRECIOUS METALS BULLION
15% PRECIOUS METALS MINING STOCKS
20% NATURAL RESOURCES & MATERIALS
20% OTHER ANTI DOLLAR AND DEFENSE (NOT DEFENSIVE) STOCKS
25% CASH
I think they have some sort of system that drives the ball in a certain direction, however, I also think that they have personal involvement with certain stocks that also drives their recommendations and dealings.
I have a Financial Investor that I feel failed me in Sept. 2008. I took all my money out of the fund except $10,000 and invested in a solar system for my house. I have very little faith in making decisions about investing for myself but to tell you the truth, I don’t have much faith in the market now. We are told so many lies I don’t know who to trust. I read your post daily and I would like to take advantage of the opportunity but I don’t even know where to start. It all is Greek to me.
My husband and I have bought silver and gold. As a federal employee I have my retirement funds in the G fund which is the “safe” (but don’t pay anything) fund. I am about four years from retirement.
I think funds make decisions with different restraints than I as an individual do. First of all, they are able to have specialists in all areas of interest to the specific funds. I stay away from areas I do not understand fairly well most of the time. They have constraints because of size and price. Funds have to consider the impact of their transactions on the market as a whole. Therefore small caps are not always available to them. They have to pay attention to the time frame and have to keep and eye on perceptions of the public, at least near the end of the quarters in the event they want to retain their investors.
As an individual investor I concern myself mainly with equities having purchased a variable REIT annuity about a decade ago. Except when I wish to hide from the market temporarily and aside from these other investments I remain about 95% invested in equities most of the time. In addition to having enough on which to live comfortably, I want to maximize growth in order to leave a significant estate to benefit the Arts and Education. I seldom hold stocks more than a few years and occasionally only a day. My allocations to various areas will vary with opportunities and my reading of the future.
I don’t care how they make their selection or timing. I use The Hulbert Financial Digest which gives the performance of news letters over the years and ranks those news letters. He does a great job in rating/ranking the news letters and evalations of the service. I select from his historical information and follow top rated news letters for a period of time before I invest.
There are a number of places that I have found that define allocation based my age and I agree with the allocation based on my age and my need for income from my investments.
Wayne
I used to think that these high mucky-mucks must have some great figures to follow and then produce the portfolios that would give the best results. I have since found out—or been told—that many companies don’t really care as much about the customer as making big bucks for themselves!!! It is a scary environment in which to do this risky business, so I really trust your judgement in this scenario.
Thanks ever so much.
i listen to all investments talk show.i receive your letter.i am afraid to invest in foriegn stocks so i think i will stick to usa. where i can see what the company is all about. thanks ines
probably not much more than an educated guess…or so much money they buy everything and hope for more winners than loser’s
Dear Dr. Weiss:
As far as muatual fund managers go, I think they use a little bit of everything you ask about in your question regarding their decision making as to a fund.
Regards,
Henryka marta Kliik
Before answering I believe background is important. Investing and associated tactical decisions of same are situational in nature. Some basic principles apply but only in general. I am retired, financially independent, and do my own investing. I have some modest annuities (not sufficient to support me) and in 18 months will collect social security at age 66. I have been retired since 2000 and have not worked since then. We travel, enjoy our sports, and do pretty much as we please. We live within our means and carry no debt.
On the subject of investing mostly equities, and do my own analysis. Cash flow, relative value, ten year growth in sales & earnings, return on equity, debt to capital, total return, pretax profit on sales, dividends and growth rate of dividends are just some of the many variables utilized in analysis of equities for inclusion in my portfolio. However, once the fundamentals are satisfied the strategic fit of the company and its products must be examined. I am a firm believer in megatrends and demographics. An equity needs to fit certain strategic criteria such as an easily understood business model that will prosper because of a regional or worldwide trend. A simple example is the medical field and the aging baby boomers with the same phenomenon happening in Europe and Japan. Stryker is an example of a company that should benefit handsomely for many years to come. Many such examples exist in the world today. The same opportunities exist by regions and ETF’s work for such regional foreign diversifications. Diversification between sectors and industry group need not exceed seven to ten equities to provide the appropriate margin of safety. Long term buy and hold works well and has held me in good standing through two major downturns since retirement.
With that said foreign stocks are held in ETF indexes based on countries that hold long term growth and strategic importance. Australia raw materials, and China manufacturing are examples that come to mind. As for percent foreign vs domestic holdings wealth is moved based on superior opportunities only.
Commodities are subject to political as well as supply and demand outside of the individual investors ability to track in a timely fashion. Coupled with severe volatiliy of such commodities such as metals, and mining a definite area to avoid.
Energy and natural resources falls into the commodity category yet some of the associated industry such as pipelines are less volatile and perform consistently with a long term perspective and not subject to the severe base commodity price swings.
Foreign currencies just an area lacking knowledge, time and energy to pursue.
Bonds with the structure of my portfolio and personal finances not a sector worth pursuing. High dividend paying equities with capital appreciation work just as well as long as you track them and take a long term perspective. Close fundamental examination of the equity prior to inclusion in a portfolio is mandatory. IRA’s shelter the high dividend payout for a while, and LLC’s work well in taxable accounts.
No problem. I just keep most of my money in savings accounts. I’m not making any money but I’m not loosing any either.
I did try China Strategy but almost everything is turning up red so far.
Martin: I follow events as they develop and then allocate my funds based on events. Right now, I am about 40% in precious metals and mining stocks, 40% in cash or equivalent, 20% Float (waiting for opportunities).
My view is that we are heading for a deflationary/depression (2010-2012) as real estate continues to deflate and stocks continue to underperform. Our monetary unit (the dollar) is an illusion (imaginary) and this gives our Central Bank policymakers the option to continue with their manipulations of our economy.
To understand our economy and future trends, I would suggest that you visit my web site and follow my blog. I do follow your opinion and your wisdom. Keep up the good work!
If they had a great system, we would not have lost as much as we did on our mutual fund investments. I’m sure they have a system, but it surely isn’t any better than most individual investors have.
I suspect that mutual fund managers primarily invest a) in a fundamentals based approach to core stocks or bonds with the goal of staying close to the most relevant index i.e. they will try and buy the “best” constituent value stocks from a particular index with the hope of beating that index, and b) (more cynically) that they depend on the major investment banks and brokers to give them some edge on stocks since they bring a lot of money to the table, effectively showing some short term growth regardless of longer term potential.
i just retired year ago without a lot of money ( due to the financial crisis during 2008 ) to invest and the most part of my money is tied in annuity.
lacking of the knowledge of investment that is why i joined in the services of your investment group even the cost is heavy to me.
now i have some international mutual funds and a few stocks with
some gold and silver ETF shares. i do not feel save what i am doing on investment and i try to learn and act more from your reports.
I usually make my decisions based on economic facts where-ever and when-ever possible. Over the past 2 years and quite confused and have stayed out of the market since the Obama election.
Over the past 2 years, you and other national geru’s (Leeb, Schiff, Casy etc.) have been preaching doom and gloom and we should expect a double dip recession or most probably worse. I agree that the economic data supports your positions, however, the market has steadily gone up, up and up. What do we believe and why????
Inspite of all the tools available to the mutal fund managers ,their performance lags the indexes in the long haul 80% of the time ,I am given to understand.This suggests that their methodology is less then perfect.I donot know why this is.Perhaps you may have an idea.
In my view,the “safest”way is to be diversified for the majority of your assets.
Several of Fidelity’s fund managers lost big time on the same stocks. I think they follow the crowd just like the rest of us. They just make a better informed wrong decision.
I believe most mutual fund managers go for diversification by holding their favorite 200+ stocks.
Money managers seem to cover all the bases with the largest emphasis on US investments-bonds and stocks, with relatively low foreign investment and no tracking to what the market is doing.
Q1: (1)Both Domestic & Foreingn (2)Yes (3)Yes (4)Yes (5)zero
Q2: Investment distribution: (1)Domestic 90%; Foreingn Currency 10%
(2)10% (3)30% (4)10% (5)zero (in 2010)
Others: 40% in: (a)High Tech, (b)Industrial, Comsummer & Staple.
In the form of stocks.
They invest in what their company wants to push.
Surely investment decisions are prepared by some … call it believing … in developments economy may go to. Euphemistically you can betray yourself being convinced that you have got rationally proved good arguments. Perhaps you take some charts and technical indicators, statistics from government institutions ore anything else. But in last consequences it is your own and mere believe what arguments you trust in and what not. And as you don’t stand allone in empty spaces, there are influences from others, the main stream and its high impact, a general guidline, trendy trends and so on. As a social and political being you hardly can evade from these enviromental impacts. You are part in psycological mass phenomena that drive investment cycles. As you are conscious of this, sometimes at a residual autonom thinking able to look at it at a meta level, realizing like the ancient Greek philosophers (or more modern like Bill Bonner declares in his essays) that you realize nothing or only little in best cases you can break the cycle and get out of the trend in time.
As I have got some costly experiences with so called profi investors and followed investment services and failed with my own bad decisions too, I for me like to play with my own money in the game and won’t give it away to others who just do the same.
Psycological mass phenomena unfold such high effective power to enforce political and economical conformity because of the absence of freedom and entrepreneurial courage.
Socialism has lost the run of the systems but infiltrated into the (former) capitalistic societies. In the same extent Freedom has been abolished in western countries. Capitalism in its original and pure sense has evaporated and moved to the far east. I tell it to my children: read James Clavell’s Taipan and Noble House to make familiar with chinese psychology and to meet the challenges of the 21st century.
When you will be entitled to something more than being a sheep in a shepherd you have to be poised to go into challenges, deal with risks and suffer losses – but you can gain earnings on your own charge.
With this approach of course there might be some loss of methodology in investments’ election, of course. But in dealing in and with complex systems do’nt try to get it all – action brings satisfaction. And if you got wrong try it again. We should roll up our sleeves and act. Waiting for somebody who brings a package of safety and certainty is no solution. Who knows that he or she has got it really?
Most people who follow their brokers’ advice lose money.
I mostly invest in gold and silver, some what I consider options investing with a small
a mount of money I invest with care,
IN REVIEWING MOST MUTUAL FUND RESULTS THEY ALL LOST 34 TO 45 % IN THE LAST DEBACLE.
I AM 83 AND INVESTING IN BONDS. EXPECT TO SEE US TREASURIES PAY 10% OR MORE.
WHILE I READ YOUR VARIOUS SERVICES INVESTMENT ADVICE, I FIND TO MANY RECOMMENDATIONS, SOME OF WHICH TURN OUT TO BE VERY PROFITABLE, BUT TO MANY TO CHOOSE FROM.
ARE YOU THE SAME FIRM THAT USED TO RATE INSURANCE COMPANIES?
Amber Dakar Reply:
January 25th, 2010 at 4:40 PM
Hello Marvin,
Yes, we are the same firm that used to rate insurance companies.
Actually, after spending two years in Japan as a Fulbright Scholar studying management techniques at Japanese financial institutions, Martin returned to the United States in 1980 to begin issuing formal safety ratings on banks and savings institutions. His firm, which is later named Weiss Rating, Inc., issued the first independent insurance ratings in 1989, the first ratings of brokerage firms in 1992, the first HMO ratings in 1994, and the first risk-oriented ratings on stocks in 2001.
He has testified before Congress several times, where he has proposed legislation requiring full financial disclosure to the consumer. His ratings are among the very few that consistently warned investors of financial difficulties, including the failure of large insurance companies in the early 1990’s as well as the demise of Enron in 2001.
In 2006 the Weiss Group, LLC. sold the assets of Weiss Ratings to TheStreet.com with the goal of making its reasearch and analysis available to a broader audience of investors.
I hope you’ve found this information helpful.
-Amber
I honestly don’t know. Sometimes he takes my suggestions and I take his. Ihave taken some ideas from you guys, but I don’t have that much to work with . When I want to do something from China , he usually talks me out of it, because they’re a communist country. I think I’m down to about 15,000 dollars or so now, and I don’t know where to go next. I have stocks in PFE, Msft,NYX,Cnsl, IGT,and irog. The last one I may drop bacause it doesn’t seem to be going anywhere. Do you have any advise for me,as to what I should do? I just don’t want to give up and throw in the towel. Can you help me or is it too late for me to ever get out of this situation, where I don’t seem to be going anywhere?
I’m really not sure though I’m hoping they do some homework. I imagine they study technicals as well as follow what’s happening in the market. Then I imagine they do as much as they can to influence both sales and returns. What I mean by that, they sell products they can make more money on our are turning a “trick” on or they throw out some false information which they’ve already invested on before or are going to get in on the corrections. I believe they have a number of games like this they do. So typically I believe they’re making money off me not for me.
I imagine they’re following standards set up by people before them or if they’ve had success, they use the same system they’ve been using. This can be willy nilly or it can follow logic. They could even be just playing a winning streak.
Mostly invested in mutual funds(diverisified)however dislike the mgmt. fees (fund&financial planner) I’m thinking of withdrawing some of the funds and investing myself but I’m cautious of the politics of today.I do enjoy reading the financial newsletters and trying to keep current. Roger
Mutual Fund Managers get influenced by the Wall Street Press, Wall Street Broker/Dealers, Annual Reports, Analyst Presentations, Corporate Presentations, and individual analysis. If commissions or other sales incentives drive investment pickers, then chances are you’ll never beat the averages. On the other hand, if you pay a investment manager a sliding fee based upon the size of you investment portfolio, then you’ve got a chance at beating the averages. I have a fee based account where I make my own trades commission free, and an account with an investment manager which is fee based. I’m always trying to beat him, and hopefully, he beats me. As I age, I know I will turn more of my portfolio to him, as I will want to spend more time with my grandchildren.
I haven’t made a concrete plan like you suggest in the various categories and country’s
and the amount to apply to each one. I am new to investing on my own having fird my broker and mutual funds for poor results. I joined Uncommon wisdom because I liked what I hear from you, Larry, Tony, Seanand the others in your organization. Just this week I thought about what you mentioned and how much to allocate to each, as I was starting to feel uncomfortable without a plan and I am not sure how to go about it. I would welcome any help I can to create a plan that moves to to preserve my capitol.
THE RESULTS FROM MOST MUTUAL FUND COMPAY’S IN MY OPINION IVERY POOR WITH THE EXCCEPTION OF SOME SPECIALTY FUNDS. THE LOST ME AS A CLIENT .
I don’t spend any time at all thinking about how mutual fund managers or traders make their investment choices. I spend lots of time making sure my personal portfolio is well “hedged” against all possible outcomes. I would describe my investment philosophy as contrarian. I pay attention to fundamentals with the understanding that I may have a long wait for those truths to count. Luckily I can afford to wait. While waiting (and missing most of the last year’s best stock opportunities) I stick with rock solid, dividend paying, well-managed companies. I invest only in US, Canadian, Australian, and New Zealand equities, and Bonds.
I deal with political and economic realities. My investment choices are much more lucrative in bad economies than in good ones. I avoid bubbles, cheer-leading, and cock-eyed optimistic economic opportunists. I have been niave about how much money our government can print while pretending that saving Wall Street will translate into saving America—its jobs, it’s manufacturing base, and it’s future.
We are clearly doomed. I enjoy reading your stuff.
Cheers.
Sally O.
Big brokerage houses follow Bernacke and the Fed for their forecasting. They have not got it right in a long time. I buy my own stocks. I am holding mostly cash now the market has gone up a good ways. I am well positioned in gold and precious metals. I also like oil and commodities. These are positions that I think will perform well with inflation on the horizon. I follow Martins outlook and analysis too. He has called the right trends for the last 7 years that I have followed him.
I am cautious of foreign stocks at the moment. Bonds will most likely take a hit with the inevitable rise in interest rates.
I PLAN ON INVESTING IN GOLD MAYBE , I HOPE MY ATTORNEY AND EVERYTHING THAT I HAVE READ IS CORRECT OR I MAY LOSE, PERHAPS I SHOULD GIVE TOO CHARITY
An optimal portfolio is achieved thru diversification. There are mathematical ways of achieving an optimal portfolio, as I am sure you are aware of. However, market changes fluctuate over time requiring an analytical approach, hence portfolio management. Obtaining a blend of risk free assets mixed with assets of varying risk helps achieve diversification and an optimal portfolio beta.
I failed to answer last week question – sorry. But as a comment, #1 – energy & natural resources. #2 – I would estimate 10% of money to invest.
This week: I think they have tested, reliable ways to structure portfolios, but at same time I feel that it is a minor guess based on info available.
I USE MERRILL LYNCH ON LINE AS MY WAY TO TRADE AND THEY TAKE CARE OF ALL MY SHARES, DIVIDENDS, BUY, AND SELLS AND WHEN I NEED SOME CASH I WRITE A DRAFT ON THE ACCOUNT AND TAKE IT 5 BLOCKS TO MY BANK. ALSO, IN THIS WAY I CAN RE-INVEST JUST AS SOON AS I HAVE FREE FUNDS AND ALLWAYS AM FULLY INVESTED. WHEN I DECIDE TO MAKE ANY CHANGE AS TO A BUY OR SELL I JUST DO IT. IF I HAVE OVER SPENT I JUST SELL SOMETHING THE NEXT DAY TO COVER IT .ALSO, IN THIS MANNER THE ONE PERSON THAT HAS ACCESS TO THIS ACCOUNT MUST GET THE CURRENT PASSWORD FROM THE PLACE THAT I TOLD HIM IT WOULD BE IN MY PERSONALS PAPERS. I CHANGE THE PASSWORD MONTHLY.. BEFOR THESE WORDS ,I SPOKE AT SOME LENGTH HOW I OPERATE BUT SINCE I HAVE ENJOYED READING SEVERAL OTHER PERSONS REMARKS I WANTED TO ADD THESE FEW WORDS. I DO LISTEN TO ALL WEISS WORK THAT COMES MY WAS AS WELL AS LOUIS NAVELLIER. I HAVE LOST ALL I VENTURED AND EARNED IN TRADEING PUTS AND CALLS AND I WILL NEVER RETURN TO THAT WAY OF INVESTING AGAIN. I ALSO GO WITH SOME GUT CALLS AND ALSO WITH SMALLER INVESTMENTS IN STOCKS THAT MAY MAKE IT BIG IF THET HAVE A WINNER. I USUALLY GO WITH ABOUT $1,000 ON THESE AND ONLY A FEW. WHEN I MOOVED MY ACCOUNTS TO MERRILL LYNCH FROM A BROKER THAT CALLED ME WAY TO MUCE, I FOUND ALL OF THE RESEARCH AVAILABLE THAT I COULD NEED, AND USE IT I DO. I HAVE ENJOYED ALL THE INPUT THAT WEISS AND COMPANY HAS PROVIDED TO ME HOWEVER; I WOULD, NEVER PAY THE SUPER HIGH PRICES THAT YOU CHARGED FOR YOUR OPTION ADVISE , SO I GUESS THAT IS WHY I LOST ALL I PUT INTO IT AND THE ONE–YES ONE– TIME I HIT A $28,000 PAYDAY WITH 25 CAT. CALLS . I RETIRED AT 59 SO IT CAN BE DONE. MY YEAR STARTED ON JAN 7,2010 WITH SAD LOSS TO MY TEAM IN THE TEXAS VS ALABAMA B C S GAME, BUT THE TRIP OUT THERE WAS GREAT AND I WILL CLOSE BY SAYING THE ALABAMA FANS WERE THE NICEST I HAVE EVER SHARED A STADIUM WITH. WE SHOULD DOT THE GAMS SOON.—-A J H SOMEWHERE IN SOUTH TEXAS
Fund Managers and Wall Street Brokers are all “mercenaries” for whatever Stocks that they themselves hold and throwing all procured funds into such stocks while they themselves be the first to exit with big killings and leaving crumps to their clients, for better or for worse. 2008 clearly confirmed they have no methodology in investments.
I am a total novice at all this.
My dad left me a nice portfolio and I didn’t act on your advice to sell when you recommended, so when it nose-dived I decided I’d try to heed good advice. So I joined your Million Dollar Contrarian Portfolio with what little I can spare. I’m getting an education and I enjoy Claus’ explanations for his decisions.
For people like me, I think it is wise to listen to proven people who understand the market better than people like me and I recommend this to my friends..
I believe that todays market is a trading market not a long term investing market. I read a lot of financial posts from a variety of online financial subscriptions and draw my own conclusions while mostly ignoring the popular sources like financial TV. I try to trade the best areas of likely gains. I also follow Elliott Wave for stocks and the dollar. Right now I am short the Euro and gold and silver and waiting for the stock market to confirm a downtrend. During the last downturn (late 07 to Mar 09) I increased my trading portfolio by about 40%. I cant wait for this bear market to be over and load up on the bargains. Probably another year or two.
I would look at the GDP growth estimates of the different countries and choose maybe 3 or 4, and then allocate monies accordingly. I would keep maybe 40% home is the USA. I beleive that brokers would make somewhat the same kind of recommendation. However, they would be quick to make the disclamer that investments out of the country carry additional risks. I have always found it somewhat more difficult to follow foreign stocks. It is hard to know the political ramafications. This is why I have turned to your service to help with this.
5
Having a very small capital base made me realize I had to generate more capital before considering longer term investment. My education didn’t include how to generate capital outside of my salary, so I set out to understand (self-education) and use leverage to trade in the Foreign Exchange market.
The Weiss newsletter gives me a very accurate overview of world financial matters, but it does not help in the day-to-day trading fluctuations. I had to develop my own approaches through trial and error, until finally I am doing better than break-even.
I believe there are many people like myself, who subscribe to such newsletters as a step forward in understanding. While I have no doubt there are some who have forever put behind them such things as worrying about finishing the education of their children, and beginning to provide for some sort of retirement plan, and health-care for the future, for many of us out here, these things remain serious considerations.
So I am unashamed to say that I have educated myself in areas that the public education system failed me, and through taking responsibility for myself, I have managed to at least discover a way to change that. It has not been easy, and I have lost some capital to get this knowledge. I have given up a lot of family time and sleep, but it has been worth it.
I now trade over days-to-weeks through taking a position, and being prepared to suffer small draw-downs. But I am getting better at it.
Once the capital begins to flow as I gain in confidence, my plan is to invest in some physical Silver, and a family home. I would not touch the share market with a barge pole, other than short term, or to short weakness. I do not see the share market as safe, or able to return me better figures than Foreign Exchange trading. I know that may sound a bit “out there” but I can not trust the advisors, after they continued to issue “buy on good value” orders as the markets collapsed.
I believe you have to educate yourself and research areas of investment “outside” the normal vehicles. Putting money into fluctuating assets may be a foolish thing to do for those who have not informed themselves of the risks, but who trust in the expertise of others. I exclude Martin Weiss and company from that genre because of his open calls and the fact that he takes a position based on his own research and experience, and states it clearly publicly. With Weiss, there is no BS.
As for what to invest in: I go to the Good Book. Historically Silver and Gold were counted as stores of wealth, but so were “lands and cattle.”
Why should I try to be any smarter than that?
I’m a grandfather, school teacher and a coach. I don’t have a lot of time to watch my investments so I’m invested in retirement plans with my current and past employers. I also have a Roth in a mutal fund. I trust that the professionals have time to watch the market fundamentals and technicals and do good by me. For that, I’ll give them a piece of the action. I just wish that I hadn’t put $2,000 in the Roth in Sept. 2009.
I think there are some intelligent money managers who use appropriate research in order to make wise decisions. However, for the most part, I do believe most managers make decisions based on performance expectations inherit in the system.
I think that the mutual fund managers rely on a combination of technical analysis, experience in what has worked well in the past, what other money managers are doing right now, and what their take on how the political atmosphere is going to change the investment environment. Looking at how many of the mutual funds have seemed to get lost in the current investment enviroment without returning great results, I think they also have been relying on instinct because the old methods are not working. I think that some of the more successful money managers have just gotten lucky this time but can they do it again?
I buy big dividend paying companies only like Mc donalds, Nestle etc.
Brian
I rely on a professional financial manager that I have used for over 15 years. We meet at least four times each year and discuss the market and my allocations. He has proven to be right and my assets have grown under his leadership.
Hello Martin-I had a managed account with TD Ameritrade since 2006. I paid them over $11,000 to lose money for me. Therefore, I have now transferred my money to Scottrade where I will invest myself. I use the methodology from Marketriders. I enter how much I want to invest, my age, how long before I need the money and that I have zero investment experience. They recommend a balanced fund of ETF’s and I buy them. I’ll have to let you know how I do since I am new at this.
Hi Martin,
I appreciate you and enjoy reading y0ur outputs. We have put some money onto a gold ETF and I am thinking that the rest of our savings should be put into more cattle for our ranch and other things on the ranch such as wind/solar.
I don’t trust the market at all and I don’t want to subject myself to all the temptations to greed that I think would accompany investing in stocks. Values based decisions.
God’s best to you.
Paul
I follow your advice and keep most of my money in cash. The invested part is mostly in precious metal-related stocks, currencies and a few survivors from past mistakes.
I believe fund managers do a lot of analysis, but in the end they look over their shoulders and see what the competition is doing. The herd instinct is alive and well. I don’t be;ieve they shoot from the hip. There’s too much at stake. The good managers do their homewprk and they also know who of their colleagues is worth following.
i monitor the baltic dry index, international news agencies and the usgs earthquake page on quakes also trends on web bots, then i jump to pretty much sure moves.
Martin I read your insightful information #1 off shore , #2 Gold bullion, mining stock
# Energy Solar, wind, Free Energy Tech, Zero Energy Housing, Cash, I got out of the Market pre-Tech-Bubble I have 50 Shares give or take Early 2013 looks like a good tine to reinvest!
Your reader,
Bruce
My gut says the money managers and the street tend to make decisions on what puts money in their pocket. I am leaning toward dividend paying stock.
Right now I am in all cash waiting for the next bubble to bust.
Lost most everything 1983 – 1988 in a construction project with the wrong person and have had very cold feet since. I was looking at bankruptcy, suicide or trusting God and decided on the latter. It works.
Your writings make a lot of sense and are encouraging me to seriously look at investing. I am 75 years old and can’t afford to loose much of what we now have.
Thomas L.
Obviously, no formula or insight is foolproof. The principals that our finance professor son learned at his alma mater did not impress me when he was a student, nor do they now. He trusts the market place for cycles and recovery. I do wonder what those are now saying who teach banking in the school of business where he teaches. Many people believe that all things shall be as they have always been, that we only need to be patient and the formulas that mostly worked before will continue to perform for us. By contrast, as long as our backless paper “currency” is pumped out for circulation, and is worth less every time the presses roll, I am one who has little faith in the future of a dollar-based economy. However, I can only read what you have to say, and not take action, because my husband and eldest son are more optomistic than I am about hanging in there with index funds. Within the last couple of years we already lost 30-40% with that strategy, and we are back at it again. Worse yet, the portfolio includes more bonds now. So, one of the ways people make decisions is to repeat mistakes….to do what DOESN’T work. To be a bit harsher, I would say that some put their heads in the sand, and hope that things will be OK when they decide to look about. I do share your web site with other family members who are more open to your opinions.
I am a TFA member I am still in the hole for $1113.78 as of 7/21/09
What should I do ?
Martin,
Mutual Companies either take a top down approach or bottom up approach. That is they firstly have a global economic bias in which to tilt their exposure or they rely more heavily on their stock selection – that is buying a company that they feel is undervalued.
The process of course for mutual funds is benchmark related (ie their job is secure if they drop 10% and the market is down 12%) vs hedge fund that tend to focus on an absolute return basis (perhaps a 10% target return over rolling five years with 6% volatility targets). And potential return has to be weighed against your risk/volatility. There is a software developed for people that assists in evaluating investor’s retirement needs as one ages and indicates the potential risk/reward one should expect to take in order to meet certain savings goals. Email me back Martin if you want me to put you in touch with the group as it may be of great value to your readers.
I care less how Fund Managers, Stock Analysts and Professionals invest.
I invest in foreign, and domestic markets. I invest in what ever stock I read and evaluate. I like dividend stocks. I purchase almost always the same # of stocks. I own gold and silver. I sold all my Mutual Funds. I have enough stocks to form my own Mutual Fund. I’ve done very well!
Fund managers are in the business to make money. I tried the haul in mutual funds ,
i findly got out, cut loses. There was nothing that held my attention. I set about
buying corp. insured bonds, Triple A Municipal bond And Govt. Bonds all insured and
guaranteed return of 100% of orginal principal. 6.5% Avg.
I combine several aspects before I move into a stock, ETF, or park the cash on the sidelines.
1. I watch multiple sectors throughout the year which I anticipate a strong need for the product or service.
2. When I see a quality stock or ETF in a given sector has gotten to Technical levels of oversold I would jump in if the market technicals havent broken down.
The main technicals I follow are RSI, Slow stochastics, MACD, combined with Candlestick charting, and volume metrics.
3. On individual stocks I look for steady growth, with a solid balance sheet, typically I focus right into the Assets > Liabilities. Assets need to be growing at a larger % then Liabilites.
4. I’ll look for investment idea’s from organizations such as Weiss research, Bloomberg will have some excellent interviews as well.
5. Only in the last year to two I have been trading oversea’s stocks, but mainly ETF’s, thanks in part to Weiss Research, I enjoy the international exposure that your organization brings forth.
6. Mutual Fundmanagers are limited in what they can do, and are beholden to the investments their company offers, they also need to keep their clients 100% invested.
So with a limited basket to choose from they select on a basis of clients risk tolerance, and a fund that might see growth in the near or distant future.
Martin, personally I know that individuals such as yourself use an array of information at your disposal. The kind of information that can be plotted into charts and curves to give you an idea where certain stocks are heading. This information coupled with personal experience in the business that can give safe entry and exit points. I understand plenty of those individuals that answered you, I’m one of them, and that we are basically handicapped without experienced guidance. I’m new at this and have speculated for many years without getting my feet wet in the vast ocean called the market. I follow trends with the limited information available to me and then make a choice. What I’m admitting to you is that I take a gamble and coupled with my gut feeling with the limited information available to me, I’m seldom wrong. But, I wish I did not have to base my decisions in this manner instead, I wish I was enrolled in one of your programs to take the higher and less riskier road to my choices. Presently is just a matter of capital, I need enough of it so I can get the experience guidance and have enough money to invest in the choices made available to me. I have neither, I’m using an unused cash portion of a small IRA that has not yielded much in ten years. In less than five weeks, I doubled the amount but, I know I lack the experienced guidance. So, I continue to read vast amounts of free information everyday to stay informed and hope I stay humbled enough in not jumping in without knowing at least how I’m going to land. I thank you Martin for some of your expertise that helped me make a couple of good choices, so far.
They choose the options that make the most money for them, either commissions or straight out-and-out bribes. This is the way politicians work, and they are our “leaders.”
You would think that if money managers and fund managers would be able to out perform the market with all of their tools and information but ythe studies I’ve read say that fund performance generally doesn’t even meet market performance.
Who has consistently beat the market over the long term? How have they accomplished this? I want to learn the answers to these two questions.
I read a lot of newsletters and financial magazines. For every opinion, there is a counter-position. Hence, the result is confusing with no clear direction. Therefore, I am back to basics:
- balance liquidity needs, separate income from capital gains objectives and then invest across various asset classes globally
- diversify
- take a contrarian view where possible
- don’t bet big on any one asset
- leave it to the fund managers to do the nitty-gritty selection
- have a mix of currencies, developed and emerging markets stocks, some bond (don’t like bond funds due to their susceptibility to interest rate movements), real estate, alternative assets, cash, etc
10% Cash 25% Precious metals 25% Energy 30% China, India, Brazil, Australia, Russia and Canada 10% Domestic
Nearly 2 years ago I turned 59 1/2 and withdrew my 401K from my company. I put it with a Investment company. Prior to that I had to chose from a list provided to our company. I have had excellent success with those choices as an agressive investor. With the readings of all your investment group I chose to leave that money in bonds, treasury notes and securities. Never lost a dime in the down turn. Thank you to the Weiss group. I then investment per advisement through the Contrarian Portfolio. Not much success there. I use the Hulbert Digest to follow their news letter ratings. I have found that all of them including some people in your group have up and down years. The amount you pay to these news letters has little bearing on their success stories. I first invested in mutual funds in 1969 when I was in the US Navy submarine service. Every one has an opinion on where to invest. Diversify the hot spots and get out when news points a change. Read as many sources as possible. Todays world in investing is as it is in the job world. Many jobs for todays young people vs same job for life. The stock market is the same. I work in the trucking industry, it is the greatest barometer of what is happening today. If it isn’t moving by truck, train or plane it isn’t moving. Those venues have been depressed since 2007 and continue to be. Case in point, YRCW. I look forward to your results from this current blog of many people. I believe, go with what your gut tells you from what you read and hear.
Happy Trails – Jack
I am 355 in gold mining stoks and gld.25 % drugs 20%forein 15%utilites
I invest in what I think will be happening in the economy in the future. In many cases I am too early, but I am a long term investor for myself and my clients. Consider what has been happening over the past year. Ever since Congress and the Fed starting printing money to save the banks I initially invested in the depressed bank preferred stocks that continue to pay very hefty dividends. I also starting to buy products that, when dropped, either hurt or dirty you shoes. I am also a believer that the overseas markets will continue to out perform the US markets. They have outperformed 60% of the time over the past 20 years, and should continue to do so. I will continue to buy US companies that do at least 25% of their business in the foreign market. I am also buying short term treasury ETFs and TIPs. This provides me a balance diversified portfolio going into these very difficult and uncertain times. I can only hope that my decisions are correct for both my clients and myself.
I think they take in technical and fundamental data and attempt to be ahead of the heard. But it really doesn’t matter if they are right or wrong because they are making money on the expense charges and fees that us poor slobs pay because we think they are prophets and have some magic formula. We are just along for the ride enhancing their wealth and hopefully adding a little to our’s.
I don’t spend time trying to figure out how mutual fund managers make decisions on portfolio allocation and investment decisions. By my reckoning, the mutual fund industry is soon going to reach a stage of terminal decline. too much greed, too much arrogance and managers too young to have the ‘wisdom’ component necessary in investing. further, they are wedded to theoretical ‘models’, and in the process they don’t expoloit their ‘gut’ sense and ‘instincts’. furthermore, most mutual funds have to stay invested – that’s their charter. As an individual investor, my cash allocation can swing from 0% to 100%. so the basic mutual fund model is deeply flawed.
I think that the good brokers have access to charts, web sites and various advisory programs, but, in the long run, they only make what seem, to me, as an educated guess that sometimes discloses their bias.
I would think mutual fund managers and advisors would use a very wide variety of technical indicators etc. to make their trading decisions. ….. With them the emphasis is on assets under-management and collecting the fees and commissions. The dealer always wins!
For portfolio analysis theory to work, the Funds, Brokers and other Pros must have sophisticated computer based programs in-house that they can do regression analysis to back-test the data. With these dynamic programs they can attempt to structure portfolios that truly do minimize your risk while maximizing profit potential to accomplish the stated goals and objectives expressed by the clients they represent.
Standard deviation plays a very significant part in the regression analysis. Modern Portfolio Analysis can then be used to balance and subsequently re-balance portfolios thru quarterly meeetings with their clients to meet their stated client goals. One must be careful not to guarantee any investment results in accordance with FINRA Regulations that all Broker-Dealers must follow.
Sure hope this off-hand explanation is something you can understand – I tried!
Bob Wallbillich
I divested of US-dollar demonimated assets and increased (approx. 50%) of holdings in Canadian assets. Most of these holdings are energy-related and income-producing, which serves 3 purposes: current income, inflation-proof commodities, and US currency divesting. I favor Canada as it’s resource rich, relatively close, west-friendly, and stable banking and political systems. My view on gold is that everyone should buy some and hope the price goes down. I keep emergency coins on hand at all times in the same spirit that I store non-perishables and a weapon: portable wealth in case of economic nuclear winter – not as an investment strategy. I still hold a few funds of short-to-intermediate duration corporate bonds and utilities which continue to provide stable cash flow, but fear loss of purchasing power (and increased taxation) in the intermediate term.
I subscribe to several investment newsletters and try to stay on top of news in the investment arena. There is so much conflicting opinions and information out there that sometimes I don’t know what to believe so gut feel and instinct comes into play. I am Canadian and live in Cananda so 60% of my investment is in Canadian equities. The rest is in US stocks including EFTs in China, Brazil, gold and silver. I try to have 60% in the “conservative” stocks, 10% in speculative and the rest somewhere in between. The rise in the Can dollar is eroding some of the gains in US stocks.
I think too many fund managers follow the herd. With all the latest technology at our fingertips, everyone is seeing the same charts and related info. I do feel that the “Big Guys” can manipulate the market. How can the average joe invester win?
Tony J
Hello Dr. Martin. well as for me and what to do. I don’t have a clue .I donot own any stock
or shares of any thing . My only investenment is in a couple of insurance Co.Plus a CD.
I am retired and concerned . I think I would like to invest in the Brakken Oil but how to
do it . It is my belief that Oil, coal and natural gas is the way to go . but again I donot know.
Thank you for any advice . Lyle
Mutual fund companies rely on computer data history and market action more than fund managers smarts. Todays market depends on instantly following the next guys move.
I believe, for the most part, they are living decades in the past. They believe things will go back to the way they were, because that is what is supposed to happen they think. It is not in their best interests to be negative. I don’t think one out of 100 have a clue what really drives the market.
as before I did send my blog; but it went something like
25% natural resources
05% gold
invest in stock overseas
domestic stock just 5%
same with real estate/currency
I think most so called ‘managers’ are concerned more with their personal gain than accountability or loyalty to clients. My investment strategy is to ask the Lord for direction in whatever benefits the Divine plan and prunes me personally for His molding into a useful tool. Inspiration will guide my actions for the greater good. If I am seeking only selfish gains, failure is expected and earned. Shepherding is an art, privilege and responsibility. Most of my life has been spent foolishly to gain the wisdom to realize the honor and blessings that come with serving others and loving God.
Todays proceeds>precious metals and $long term contracts>pay off contracts later when dollar is low and metals high, eating from garden, teaching orphans as time is short so do good while you are here. e
Hello Dr. Weiss, To answer your question, From my experience with Brokers, some
shoot from the hip, others do not belong in the business. I am sure some have a
research dept. they get info from, but some time I feel they push the hot item of the
day. All they want is a sale commission. I bought a fund in May, The broker tried to talk
me out of it and get something else. I bought my fund, using my research and am up
80%. I put my Brother on this one, He called the Fund and got a broker that also tried
to get him to change. He is currently up 73%. Regards, Peter Kaip
Since asset allocation is the most important decision an investor makes, my approach as a senior disabled person with limited capital is to firstly skew my allocation towards assets with low volatility and positive real returns. additionally since I reside in Canada(fortunately) I keep all my fixed income assets denominated in C$. Due to the high likelihood of high future inflation caused by governments in the devoloped world printing paper money to bail out their banks and large buisiness conglomerates I have increased my normal 10% weighting in gold and other precious metals to 25% of my portfolio. Currentley my asset allocation is as follows:
Domestic: Equities-25% (mostly utilities, consumer staples, and income trusts.
Fixed Income-25% – high quality corporate bonds and preffered shares. Plus
high quality Reits.
Cash -5%- Tbills
Precious metals-25%- gold and silver bullion plus global equities of high quality resource
companies.
Foreign: US 10%- High quality tech and companies with well established
BRIC 10%- weighted using Templton Emerging marketing funds & Russia + E.
European fund.
Once a year I rebalance the major allocation and every quater between the components
in each category depending on outlook, earnings etc.
I hope I am doing this right, although my volatility has been low my returns have not been that stellar either. Looking forward to your sage advice.
Mohammed.
I think pros and mutual fund managers most probably have and follow a process and strategy. I feel most brokers have agendas and are often biased. Both are influenced by momentum.
Right now I have most of money in the bank (yes I know this may sound foolish) primarily because everything I seem to invest in does “south.” I read about gold a year or so ago and sure it went up but rest assured if I were in it, it wouldn’t have. I think maybe silver is good bet because of the disproportionality in relation to gold.
As for stockbrokers, I think they sell the “stock of the month” and really either purposely set you up in a lousy program for a higher commission or they actually have no clue what they are doing. I really wish I could find some sound advice just so I don’t have to keep losing. Granted I don’t have millions or even hundreds of thousands of dollars to invest but it sure would be nice to see my money work for me.
I think in all likelihood since I have invested in things that were suppose to be relatively safe (and still lose 20% + in mutual funds) I may as well either keep it in the bank or shoot for the moon knowing that I will either win big or lose. Sad as it is to say I am use to losing but that doesn’t mean I enjoy it.
At 45 I am past my prime and know that being a wealthy man is out of my grasp unless some absolute miracle comes down my street. As I recall, I do not live on 42nd street – HA HA
Have a good day sir
Surveys indicate that most mutual fund money managers don’t invest in the funds they manage for their clients. This should answer your question as to whether they try to “minimize risk” or “maximize profits” for their clients.
Mutual fund managers use much the same computer based asset allocation and timing strategies — this is why the major stock holdings of most funds are identical in selection and time accumulated.
These managers aren’t paid on performance — they collect their fees whether they make a profit or not. Their objective is to match the overall returns attained by market indices.
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
I would think that they have been doing this long enough to know the patterns and cycles of the stocks they are investing money in.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
I do not feel that they are just guessing or just shooting blind. They have tested reliable ways that they use.
Leslie
Martin, I have every confidence that had D.C. not bailed Wall Street out, many more Madoff’s would have shown up. The truth of the matter is that the authorities have just touched the tip of the ice berg. As long as there is a lot of cash flow that can keep the ponzi games financed many of them appear knowledgeable when in fact, they are anything but.
I have no intention of helping them to cover their butts.
I think they use historical financial performance adjusted with current and future economic conditions.
It’s very diffiucult to know the best route to take,but traders do their trades from a 401k a/c or a cash a/c. I am just learning the business and have a small cash account. My mini trades are diversified according to market posture and forecast, charts and technical analysis, Industry groups. OF COURSE
TRADING IN THE ASIANor “foreign” markets is proving very lucrative for some people,but I stay on the home front for now. I think one can do well in currency ,although now the “powers” that be want to reduce the leverage. Iam learning to do that also ,but its very tricky,until I learn the ropes.
I have no interest in buying gold coins.(have you heard about the bank on 5th Ave which asked clients to remove their gold and find other storage,because they dont want to deal with it any more?) I would like to think that mutual fund managers do thorough research,and try to do their best for the customers,but in my experience,i am
not so sure that they do. I have been told that some of them do every thing they possibly can ,yet the fund does not grow. But they dont advise the customer to try something else,they let you “bleed”. Of course they have to get their commission and keep the job! The others just buy whatever you ask them,no checking or analysis,and get their commission which is usually MORE than if you go to “Put Express”! Then you get a letter in the mail to say the stock went down and you either lose everything or have very little left! I was BURNED in the crunch,hence my decision to learn to trade.
I AM INVESTING (LONG-TERM) IN ENERGY STOCKS IN THE GREEN SECTOR OF THE MARKET. THIS IS BASED UPON THE GROWING NECESSITY FOR CLEAN ENERGY TO COMBAT GREENHOUSE GAS.
I AM NOT SELLING ANY OF MY ASSETS TO BUY THESE STOCKS, BUT AM INVESTING ALL NEW MONEY I HAVE AVAILABLE IN THEM.
I personally believe that hard assets are the way to go. I don’t have alot of savings but have decided to go with Precious metals because I feel in the long run it will pay off the best. I believe in both physical gold and also silver. My largest percentage is silver because the silver story is truely an eye opener when you see how much we depend on it for our daily lives. While the dollars burn a hole in my pocket by buying the actual metal it forces you to save. I believe that you should do your homework and then go for it. Even I made a mistake it will never go to zero and I have total control of it nobody in between.
a lot of the time,investing is alot influenced by gut feeling,because the diverse universe of professionals all have their own interpretations of the economic picture. the only thing that i as a investor can do is be aware of the different angles of the economic picture and draw my own conclusion as well as choose the right path and hope that is right way.
I believe there are very talented people providing great analytical tools and analysis. However, world economic and political conditions are probably influencing these analysis dramatically. Tough to project when volatility is high.
Information from the Weiss team and Money Shows I am approximately 40% oil and 40% gold and gold mining companys.10% is used to trade options and 10% international stocks.
I subscribe to several stock newsletters, and at this time am heavy in mining stocks and resource stocks, a number of which are based in Canada. I am looking more and more at investments outside the US. I like many others have missed out on the China market because I do not trust the Chinese. Also I am unwilling to invest in government owed companies.
My main investments are what you reccomend. I like American companies but consider some foreign stocks. I have been buying the foreign ETF’s that you have recommended. I buy gold (gld) and gold mining (ego). I also trade the forex market futures concentrating on the USD, EUR, CAD, JPY, GBP, AUD AND THE NZD.
Determining mix is really just a crap shoot. I read see what various advisors are saying about sectors, countries, commodities, resources, etc. Then try to mix it up. I was even confused with the Weiss staff recommendations. Each discipline has a mix per i.e $100,000. How do I put the staff recommendations together into a packaged (%) mix.
I spend about 6 hrs per day on the computer reading WSJ, your stuff and others and review several investment letters. It takes way too much of my time! But I afraid not to as nearly everthing is invested. I suppose my moves are viseral based on what I have asorbed. I would like to find one letter in which I would have confidance and get a life. This is why I am tracking yours which looks the best thus far.
How can one learn how investment letters are rated re: sucess rate?
Listening to warnings about the dollar, I began to watch other currencies and decided to get my money out of Bank CD’s and put into an Australian CD. I also have invested in gold and am purchasing a condo on a lake in the South as a vacation home.
Paying cash. I will also put some cash into T-Bills. I believe that those who work in the business of selling stocks, mutual funds, etc…..go by what they have seen in a more recent past. They do not look at cycles. I trusted a “reputable” broker to make some decisions for me a couple of years ago and lost money. He assured me that would not happen. I did not give him a lot to work with so that I could test him out…grateful it was not more. Now, I do it on my own with a lot of reading, studying,
and the great help from Weiss, which has been the greatest benefit of all.
I am buying USD now for ETF SH Proshare(USD 200000).I am waiting for the next happening in Aug.
I wish to buy some sliver or gold,but not now.
I am investing in 60% dividend paying stocks right now, with 40% going into inverse etf’s. i.e. skf, and qid. My 403b is mostly in fixed income and a small amount in European and Oppenheimer due to restrictions for pretaxed options.
I believe they use fundamental and technical analysis in selecting the companies for their funds.
I do not know, but think that they look to their own interests.
Like many others I read several sources, evaluate the allocations that these resources suggest and average the input. Additionall I work with an advisor, and we work out the areas of investment to manage risk and return.
I’m a day trader and am following the market trends by main market index : dxy.
Sometimes I loose it, but most of the time it works/wins.
I just simplified the way, it’s much more complicated when it’s combined with other pointers and graphs. My broker’s site is calculating it in details in seconds, which I can’t diclose it.
Good luck in your survey.
Mr Weiss
I have been reading your advise for decades and I feel you are the most trustworthy of all the money men , but I beleive most have a self-rewarding plan.Your team of professionals is top notch , I respect your opinium.
Martin, I don’t really employ a system other than having stocks that pay a healthy dividend. I haven’t tried very many foreign stocks, maybe 3 or 4, with reasonable success. I only have about 6 stocks at the current time and usually start with 200 shares and if it does well I increase it to 400. I usually plan ahead the price to sell the stocks and have it dialed-in. I’ve had a few that I bought for dividends and during the recession have lowered the payout and one discontinued the dividend altogether. I pay attention to what your group has to say, but I listen to others, also. It seems that I can learn quite a bit from the experts.
I am investing in China, gold & silver mining and hard gold and silver. I believe bonds will soon collapse and domestic stocks in general (though I dabble in them a bit in my 401K) are for the most part too risky at this point in time. We are looking at perhaps the greatest collapse since the fall of the Roman Empire! Not too optimistic, I must admit, but when you watch your government flush trillions down the toilet, as they are doing, it’s difficult to imagine ongoing prosperity greater than that enjoyed by the Haitians.
1- I think that they mainly use fundamental data and if they use a technical system they really don’t understand the dynamics of the market .
2- I think that they have a mathematical model that they trust is reliable but really isnt in all types of markets
In answer to your question; my thoughts on where information is derived from are: from following the activities of the commercial investors who invest before the (emotive buying or selling), activity, which is generated by reports given out by these share investment companies and media bulletin articles etc. The commercial investors & large families follow their own research and actually drive the market, therefore in most cases making profit opportunities. Would be interested in your reply and am very willing to be told differently. However I would be interested to have an information group in Australa. Thankyou.
Hi Martin, Mm…Questions that could never be truly answered, given no one will ever know how each mutal fund, wall streeet broker or proffessional money manager actually works.
But one thing is clear after reading many of the earlier responses, Investors dont know what to do. Remember Warren Buffets Rule No.1 “Dont Loose Money.” Before any investment, ask yurself am I going to loose money? If the answer is yes, Dont invest its that Simple!! Or is there a way I can minimise my losses? Yes, there is!! “Never buy a stock, without setting a trailing sell stop order immediately afterwards, set the percentage or amount that you are comfortable in risking. Secondly if a money manager is loosing “your money” for gods sake take it away from them ASAP. Your the fool if you dont!! After all its your money!! Not there’s!! Dont be afraid to ask more questions, invest time in yourself with further education, not waiting for someone to tell you a buy or sell tip, know why your investing? Use Asset Allocation (Dont put all your eggs in one basket) this is another tool big boys use. Use the internet, start searching for better safer returns outside of the USA (legally) Example: bank term saving deposits are paying up to 7% in Australia. Its your life, your journey & your retirement not wall streets… Start today, put yurself in charge of your own investments, stop making others rich, & you will be alot better off… Good luck & good investing..
Best regards
Private Investor, Investment Director & Chairman Of Private Family Pension Fund, Australia.
Martin I rely on your emails and information. I would think if I was in the broker business I would have information on the business and go from there.
I TRULY HOPE THEY DO GO BY GRAPHS, TRENDS, KNOWLEDGE AND ETC. BUT PERSONALLY I HAVE BEEN FOLLOWING THE MARKET TO THE BEST OF MY ABILITY AND STRONGLY FEEL THE STOCK MARKET IS BEING CONTROLLED BY THE GOVERNMENT, MAYBE TO INVESTING TO MAKE MONEY. I HAVE SEEN THE MARKET GO UP AND DOWN (2 DAYS GROWTH, 3 DAY LOSSES. – USUALLY LARGE LOSSES AND GAINS ON GOLD AND OTHER GROWTH CO’S. MYSELF I PUT MY TRUST IN PEOPLE I HAVE A GOOD FEELING FOR. YOU AND MOST OF YOUR ASSOCIATES. THANK YOU FOR MAKING ME FEEL SECURE IN YOUR KNOWLEDGE.
I have increased my gold holdins in gld & aem from 10% 20% the same with energy an that would be bpt which just paid a huge dividend! Also hold some tbt,cpfl, slv& ung with
10% in cash
I use the black bean method. Sometimes it works, rarely, othertimes it’s just something to chew on. I usually get in while everything is on the slide.
I have been “in the market” for more than 50 years – have made my share of mistakes, but I “survived” into retirement. I read a lot, including most of what you send me, and make frequent changes in my portfolio. Conservative in my IRA accounts, income producing in my regular investment account. I deal with 2 low cost brokerage firms and sometimes even follow their advice.
I have not done much investments yet but I have been studying and about to start. The one I have been told again and again is not to invest in one area only.
I try to read up how well each has been selling throughout the years
I learn to trade with currency,and I put $5000 because i do not have money anymore,thats what i got.If i have $50.000 or $100.000 i will invest at stock market $30.000 and curency $50.000 and $20.000 for term deposit.
I try to read how weel each one has been selling throughout the years
I have been subscribing to real wealth for a lot of my recommendations.
I use other newsletters to confirm recommendations.
I have gold ,gold mining, silver, natural gas and etf and some oil.
I read a lot and talk things over with my advisor and reach a decision that agrees with my head and gut.
I do not like options,forex market or funds. I have invested mainly in Canadian stocks because of the higher dividens. I do have two American stocks that have been O.K. Kinder-Morgan and Progress Energy.
I read a lot and talk things over with my advisor and then make a decision that agrees
with my head and gut.
Answers to these questions:Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Question #2: How do you know how much of your money to invest in each area?
Q1-A I agree with Larry – Asia and Gold/Metals/Raw Materials – so the first thing I do when I get any cash is convert 95% of it to gold and silver bullion. THEN I decide where I might invest it – but I absolutely keep a bare minimum in the bank – about enough for a month of expenses – no more.
Q1-B. While I’d like to play currency markets and no doubt there are opportunities there, I don’t gamble – I have books on investing, I wrote an artificial intelligence driven commodity trading software package in the 1990s that actually works – trades automatically and wins/earns nicely – and I still do not gamble. The trends are whipsawing so badly – no way. I do have some Gold ETFs and some mining and some oil equipment mfg stocks together they delivered 50% in 6 months – not a bad return. I cashed out profits at year end and let the principle ride. My coins went up nicely (I was buying around 750-950) and every now and then I take some of that as well.
I invest my time in my biz – a renewable energy company – and pour my capital in there as well – we have billions in contracts and once we complete our first escrow on a wind farm every dime in earnings we pick up will also be held in metals – copper contracts are a good thing for a wind farm company or any utility related firm to hold and gold and silver are the best (my opinion as CEO) for retained earnings. – my two cents
Martin: You pose an interesting Question. I believe most fund managers actually think they know what they are doing. But as we all know, it is maddening to have money 100% invested and despite our best efforts, we infrequently hit the big winner of the day. I personally have everything in silver. Well, of course there’s my land and lots and lots of bamboo. If I buy anything, it will be natural gas or domestic oil enhanced recovery. Possibly some of these new technologies coming online dealing with the Smartgrid. But lets face it, it’s all kind of a crapshoot! I think you are a really cool guy(I’m 62 and still using vocabulary from the 50’s). So I’ll think some more and get back to you. Regards, Richard
Most of my choices in building an optimal portfolio have come from reading your emails for over 2 years. Energy and Natural Resources are definitely key since the energy demands of the world are increasing and natural resources are getting used up more quickly day by day. Domestic stocks of course are not increasing as quickly as Foreign stocks because China , India, and Brazil are quickly advancing with their own Industrial Age. The domestic stocks I prefer also have strong international roots as well. For foreign stocks ETF’s seem safest as we really do not know how their businesses and governments run their organizations. Also, I sit at the edge of my seat waiting for “Tony Sagami’s” videos and interviews in China. Foreign Currencies I would need more knowledge and help. Bonds sound scary from what I’ve read in your emails. Gold Bullion, Silver and other Precious Metals are definitely the way to go. The other category I love but you have not mentioned are Monthly Dividend Stocks. To have some of these in Energy Trusts is an exciting way to go.
But first I am getting rid of all debts and building a savings as prescribed by your emails and your book, “The Ultimate Depression Survival Guide”.
As for how much money I would invest in each area I still need to learn. So far I have a little in a dividend stock, a speculative energy stock, and a speculative green energy stock.
Mutual Fund money managers I have no idea how they make their decisions and have absolutely no desire to invest in that area in this market.
Wall Street Brokers and pro’s read and read. They know how to read graphs (the technical) and also study (the fundamentals) what the companies are producing and who are running the companies. They may even visit different companies to meet the CEO’s excetera especially if they hold millions of shares in that company’s stock. They pay attention to the numbers in year end reports and listen to certain phone calls that discuss the year end reports. Thank You for letting me contribute this and I love reading as many emails of yours as I have time. God Bless to you to. Brenda s.
I try to allocate across all asset classes. I like the natural resources and foreign markets in general right now.
My investments and percentages come after reading a lot, talking things over with my
wife and advisor and then make a decision that agrees with my head and gut.
I think they look at trends, and how different actions of governments or companies have changed things in the past and how it affects the markets. Doesn’t always work though. Sometimes they get to caught up in their own self and what they believe.
Martin, while I would like to believe that some professional managers and brokers use historical charts and graphs and/or rely on respected analysists, I think that far too many are just shooting blind and guessing, based somewhat on what they are hearing from their “inner circle” of fellow managers and brokers. That being the case, we might as well just follow our own instincts, especially after reading what you and other respected writers think and suggest.
All I know is -
1. When I use gut feeling, I always lose money. I usually make money when I take advice from a reliable advisor and don’t put too much money in.
2. Have you seen the video “Demographic Winter”? (Effect of population changes on economy, & even market prices.) Worth while.
3. Also, fundamentals affect mainly long term market swings. For short term, you need technical indicators.
4. How will you know when to sell in gold investments? Cycles? Hmmm.
Reply to your first question Martin
1. my decisions are formed by
reading & listening to
Weiss bulletins
world news
economic reports from governments
broadcasted money programs
weather & climate extremes
currency flucuations
my own preferences
2 like – energy & natural resources [including oil, gas, water & metals]
3 Dislike – foreign currencies due lack of trust of banks & other financial institutions, who are seen to act in their own interests & frequently delay transactions & interest payments to the disadvantage & cost of their client, for the institution’s own personal gain & benefit. Been there got burnt.
Bonds – not interested – yields are low /with long timeframes that reduce flexibility. bonds are linked these days to failing government currencies in economic crisis.
They use standard formulas for investing in stocks, equities, and bonds.But as of 2008 I’m afraid the model has broken and conventional wisdom doesn’t cut any more. And I’m not willing to trust it any more. When things sort out a bit I wouldn’t mind getting my feet wet but until then I think I’ll keep ny powder dry.
Earl
I think that most of these fund managers are just shooting in the wind. They may do some analysis, but in the end they are just selling what may be the flavor of the day.
Investment Decision for domestic or foreign : Domestic 25%(Singapore) Foreign 75%. domestic into stocks mainly blue chips. Foreign in familiar established blue chips such as HSBC, MayBank, Bangkok Bank, Berkshire B Shares and Country/ regional ETFs such as BRIC and S Korea. Natural resources… GLD and SLV ETF and BPH and Rio tinto.
Foreign currencies: stick to familiar pairs such as A$/S$(long…profitable over past 1 yr) and US$/ S$(short..awaiting profit)
Bonds. Middle of crisis and took profit and things look better.
Dear Martin thanks again for your incite about WAMU a while back it helped me big time. I was also able to help my family to park out there 401k before it hit bottom. I would say in 2010 after much research into the future of world trends and usable resources that I am looking into silver and other tangible investments.
Firstly I enjoy your daily articles and emails , how ever I’m Canadian and our tax laws don’t always jive with some of your recommendations. 2nd: I wouldn’t touch Mutual funds of any kind with a sanitized stick. Brokers are the only ones that win in that game in my oppinion . I only invest in real equity land #1 Agricultural commodities #2 and similar things that society needs on a daily basis
Hello Martin,
Good questions. Unfortunately with all that has happened this past year, I am extremely disappointed with the general greed and lack of integrity of brokers and investment houses. As much as there are many good and honest financial providers, the dishonest ones tend to eclipse the good. This of course makes it difficult for many to know where to turn, for good honest financial advice, so many have chosen to go it alone. Through reading, studying and with the transparency available on the internet increased financial literacy is accessible to all. Today, people can lose their own money for free, they don’t have to pay someone to do it for them! And that, unfortunately in many cases, is what it has come down to.
Re: where/ what sectors in which to invest, it appears fairly obvious which ones, one needs to focus on.
Martin, you and your Team, in my mind ‘ooze’ integrity. I have learned so much through your online publications, your videos, interviews and your books, etc. I am most appreciative of your financial wisdom, your honest work ethic and your passion for helping others. Thank you so much for caring!
I do not have enough money to invest and just buy a few gold coins or recently silver because I cannot afford gold anymore!
At any rate, I would not invest on a hunch, and do not think this is the way Wall Street operates!
Gabrielle
I believe they do a lot of research, collect data from various sources and then their gut to make their decisions.
I doubt if there is a truly tested process to make these decisions or they wouldn’t be showing the huge losses that occurred in 08.
I think that Mutual Fund Managers are more qualtitative than individual investors, but even they vary somewhat. I think that there is a place for Gold, OIL & foreign firms in my portfolio.
I invest in USA and foreign stocks through ADR’sand ETF’s I am fairly strong in Energy stocks, and Mining stocks. I also have GLD aand SLV. On the Bond side, I have several Municipal Bond Funds: NPI,NQU, VWLTX, annd THNMX (all Long term)
I don”t have the time or inclination to become involved in Currency or FTX trading.
Logically they should be watching the latest news developments,anticipating the wants and needs of the consumer and finding those investments that match these criteria within well positioned companies. The biggest problem I see is the mass amount of information that must be analyzed in many cases. Most lower functioning brokers simply pass on the recommendations their firms are touting. Of course there is always the disclaimer that we cannot be 100 % sure. Kind of reminds one of the weather forecast, as long as the weatherperson does not predict 100% or 0% they can never be wrong.
The Basis of Mutual Fund Money Managers and Pros make their investment decisions. I believe each Investment House has their in-house Guide Lines. Generally, their Guide Lines are too cumbersome to take advantage of sudden new economic or financial developments. I believe the returns from Fund Managers’ investments are mediocre. However, the Funds are structured into Capital Safe, Higher Capital Gains and so on.
As such, an Investor has the choice to select the Type of investment that’s best suited to one’s Temperament or preference.
I’am trying to learn. I’ve lost more than I have Gained. That was due to a greenhorn approach. I bought high and sat on it for years thinking that the market would rise and recoup the losses. NEVER. Not really understanding how bad the US was in debt and that we were sending our jobs overseas. I have read up on some history now. I read crashproof 2 by Peter Schiff. That will make you set up and take notice. The US is finished in my opion. As a viet vet and a long line of family vets it really hard see what a mess this country is in. I want to invest alot more. However I want out of debt more than I want to invest. I make about 2k a week so I’am trying to retire a mere 24k as fast as possible. I’am almost 60 yrs of age. I believe that my pensions are not going to be worth hardly a thing in the near future. The house is about 450k, but I believe that will also decline in value. I think that commodities are the way to go. I will invest some more later but for now I want out of debt!!! In the meantime I will follow along and lear what I can.
Q1. I am deciding how much to invest in Domestic (Canada) and foreign (including US) stocks. 50% Canada, 10-20% 10% Non-US foreign, Gold/precious metals, 10-20% Canada resources, 0% foreign currencies, and will NOT invest in Bonds 0% (due to interest rate risk and currency risk).
Q2. I decide how much to invest based on quality information (and instinct), such as Weiss report and other sources. I have some limited access to mutual fund managers reports. Perhaps in 2011, I will reconsider investing in the US, but I have avoided the US equities since 2001 due to american debt load, the bubble had to burst. I believe Gold and precious metals will peak in 2010 and I will reduce exposure to them by mid year. I will continue to invest in Canadian equities. I will not invest in Bonds until I see how interest rates react.
Q3. mutual fund managers and wall street brokers. Unfortunately, too many mutual fund managers to a 100+% turnover of their equities in their mutual fund every year. That means, they cant possibly know the companies they own very well. I prefer lower turnover mutual fund company managers and have found excellent quality in AGF funds. The lower turnover rate of a mutual fund shows they are sticking to their guns and not just shooting from the hip at every company that comes along. The TSX S&P index is up 55% since 2008. Canada blue chip companies have held strong in strong mutual funds. Staying the course has preserved equity.
The brokerage firms are ONLY interested in sales commission/bottom line, so they sell whatever makes them the most money. Most of them will not deal with low turnover portfolios or small investment portfolios.
Hi,
All fund managers are constrained to the parameters of the type of fund that they run – whether either specialist,general, balanced or aggressive.
Personal portfolio managers generally run their portfolios according to the risk appetite of the client, there are no definite rules to personal portfolios, except – not to put all your eggs in one basket.
When it comes to advice from a financial planner the emphasis should be on determining risk profile, as well as income requirements.
With a self-investment strategy, asset allocation should be contained to not more than 30% allocated to any one category. Even then it should be split into different sub-categories.
The whole idea behind building a portfolio, depends upon a balanced diversity of investments to build and retain wealth over a long term.
I have a Financial Investor/Adviser with an umbilical cord to Merill Lynch that petty much leads me through what I should be doing with the money. I think the last big move was to invest in mostly Grade A Bonds. I am told at my age I need to play it safe, and I can not afford another big hit like last year. Funny I asked to invest in gold 20 months ago but was told that was not a wise move at that time. Then after the big dump of 2008 I was told I was lucky that I only lost 5 % but the losses kept building to almost 15%.
Martin: Only those funds or managers that can consistently make 15% plus returns, year after year, have any sort of “system” to beat the averages. These individuals, like Warren Buffet, are few and far between; they probably utilize astute observations, research, common sense, experience, and gut feelings to guide their ultimate decisions which result in stellar performance. An individual that is adept at predicting future trends and with the insight and knowledge to assess its impact on various companies, industries, countries, etc, should be able to do very well.
………….. In short, Martin, I am counting on your recommendations.
Dr. Weiss,
I truly appreciated for having me on your distribution list. All the information from your researches are truly valuable and very informative. In terms of investments, I really don’t have any personal experience, and don’t know and where to invest in. And I don’t have very much to invest, most my 457 and 401(k) contributions through my employers are restricted to a limited number of options. However, here are my answers to your question posted:
Question #1: How are you deciding whether you’ll invest in domestic and stocks, gold and other precious metals, energy and natural resources, foreign currencies or bonds in 2010?
Answer: If I the funds to invest and knows how, I would still put 25% in stocks and 50% in energy and natural resources and 25% in other precious metals but gold is out of reach for me.
Question #2: How do you know how much of your money to invest in each area?
Answer: I don’t know how much but I think put everything in one place is too risky, so I would spread them in at least 3 or 4 different options but not all over.
Your today’s Question #1: How do you think the mutual fund money managers and wall street brokers and pros make these all important decision? Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
Answer: I don’t know, but if I have to guess, I think good money managers and brokers will need to do their homework well, they must do some extensive researche, combined with the media reports and have to be familiar with each funds’ investment options (such as company’s earning reputation and stability).
Dear Martin
I have lost quite large sums through finance managers. Presently I am trying to understand the market myself. I am interested in metals, gas and engineering and stapel foods eg: corn, rice etc.
When I make informed decisions I find 70% is with the head and the other 30% is with ‘instinct’.
I think it does take years to feel quite comfortable in the market and lots of studies eg. economics, finance, politics and experience. I am looking for another finance manager, but over the last 20 years I have had my share of being ‘bitten’.
Petra
I think mutual fund money managers and Wall Street brokers don’t have a clue what they are doing, just promoting the stock they feel may go up. This market is showing signs of coming apart. If there profits were based on it’s customer profits, rather then how many customers sold to, I would have more positive things to say.
I think they use sophistacated technical data combined with fundamental data. I think they consider the psychology of the market, as well. I have been reading and reading and reading because I’m relatively new at this kind of investing. Before, I only had mutual funds and forgot about it. I follow your advise but I’m, also, trying to formulate my own investment style. I have s-o-o-o much to learn but I’m trying and keep believing that I will succeed.
well my thoughts are that i still like gold stocks,i reckon our market will be higher than previous high well i am talking about the australian market.i still think that china will play a big role
I base most of my trading points on reading charts, as well as trying to keep up on company reports and news releases as they come out on the companies I invest in.. Money and Markets is a very good guide for a more unvarnished truth about the world of investing. I never feel like I’m being shilled by the cheerleaders that are so often found in the general financial media. Many thanks for sharing your well researched reports.
I have been trading gold equities(small,medium,large cap).
I normally am a seasonal investor in energy but missed out on the runup this year so abstained.
I have a holding for most of the base metals.
At present I have no emerging market holdings but plan to diversify in this direction.
I personally think money managers are going into things blind. which is very scary.
Hi Martin and his great staff:
I think some of the mutual fund managers have good methods and analysis techniques,
but many don’t. It seems they just shoot from the hip with one hand.
Since joining the Weiss Inner Circle, I am very impressed with the knowledge and true professionalism of the managers/analysts in all of the different categories. All of the government stimulus and bailouts have made it very difficult to analyze and predict the market activity.
Thanks, Chuck
To: Martin,
I personally invest in domestic stock and also invest in I-share (china equity) and gold (physical). For the weight that i allocate on each asset is that I put 50% on devidend stocks, 10% each on I-share and gold, the rest i put on speculative stocks.
for the today’s question, i have read lot of daily analysis from brokers and mutual fund. I don’t actually buy them as sometimes they they are too optimistic about the economic and the firms’ performance. Also, in this economic environment, they do rely more on technical anaylysis rather than fundamental.
The best investment has been gold. Saying it since 2003 as I predicted in my radio show and TV show since 2003 the collapse of fannie/freddie, the mortgage crisis, to the month the last two stock market crashes and the numbers they would go to. I still predict soon after reaching 12,000 they will collapse to under 5000 and not rebound anytime soon. The dollar will become a domestic currency and America will take on an international currency. The treasury bills are being held up by the strong arming of portfolio managers to purchase them with retirement/pension funds under their control, at almost zero interest. Many of the poor performing DOW stocks were replaced with better performing stocks, giving it a false security. It also seemd to rally right around bonus time. When the national debt becomes larger than the money in circulation the financial system collapses, it cannot be paid back under that scenario. We are so close. Because banks only offer on average insured accounts for depositors up to $250,000, the tarp money shored up the big banks while the largest depositors could take out the cash, build tangibile commercial buildings ,amusement parks and bunkers to invest in and hold through the collapse, because otherwise if that bank went under they would lose everything over the FDIC Guarantee. Even the Hurshey Foundation in PA has been buildings, roads to nowhere, and tearing up perfectly good gold courses to put in water parks, seems the foundation mandated all of the trust had to be liquidated by 2011. Think Old Man Hershey new something most still don’t, domestic cash will be worth almost nothing very soon. Especially when it is exchanged for a new international currency at about .25 cents on the dollar. Real property, with a water source, that has no liens and an ability to grow on if necessary, at least 30 miles outside of an urban area.
JIM RICH 1-20-10
I FEEL THE INTERPRETATION OF DATA IS COLORED, THOUGH NOT ALTOGETHER DETERMINED’ BY ONES ABILITY TO CONNECT MANY DOTS, HOW BROADLY ONE IS EDUCATED, AND DISPOSITION [ PREJUDICES ONE MAY HAVE].
Hi,my portfolio splitted 20% in stocks and the rest in cash
I noticed some investors putting their money in oil, short term might work in my opinion
but any longer than early 2011 might cost. Geological surveys indicate earthquakes of a high enough magnitude that could make extraction near impossible on some very large wells. The auto manufacturers will quickly turn their attention to mass transit (trains)
and electric/hydrogen autos. The Governments expect it which is why that are purchasing such large amounts of auto makers stocks.
CDs’ only work in securing the cash, not the value of the case when you take it out.
Thanks for you’re concern towards me by giving time to e-mail all that you got in you.I personally i’m confused with the whole issue,but do no that you want people to know more about “Investing” in any busisness one decides to take. Iknow from afew comments some colleagues wrote down. Secondly, Idon’t have the money to put in as amember to get profit by the end of the day as previously shown from your chart depending on the amount of cash invested in by the individual.Lastly it’s my prayer that you continue giving,helping,advising the public about the current situation around the globe,and iwould wish to be part and partial of the whole crusade and see abetter future and make profit,though in everything one has to bear risk’s and challenges before you ripe what you sow.
Thanks very much ,
Erabu Robert (from Uganda)stay Blessed.
Dear Martin,
I am old fasioned, I belive in addressing a person.
I have three sentiments about mutual fund investors:
a. They are primarily motivated by what investments will reap the greatest commission for them, rather than what is in the best interests of thier clients. Sometimes self interest and client interest coincide but this is purely fortuitous.
b. They are chartists who work to a formula.
c. They do not look at the bigger picture as we have learned to expect from you.
Yours aye,
Anthony Cole
There are trend setters following are the global supply & demand and those that are following the trend . Big mutual funds are one of these trend setters, they spot a need via analysis, inside information or a shortage in supply.
Fund managers must have some means of deciding what to invest their clients’ money in, and I am assuming they do research, study the fundamentals, sector trend analysis, historical information and patterns, and pay attention to the so-called respected experts, favoring their own, but not necessarily always following them. I believe that they then select the most conservative of the securities they identify as having the quality on which any given fund is based, e.g., growth. I assume that many of the previous steps are computer-generated, and that individual human expertise is in short supply–it’s more of a collective. The fund that does the “best” (gets the most clients) is the one whose model has had the most recent success, which doesn’t necessarily predict future success at all.
Going by their behaviour in 2008 none of them got anything to safety as far as I could see, I think they just follow the flow. No matter what they see on the horizon they just soldier on and follow like a bunch of lemmings. Regards Rob, ( keep up the good work)
i THINK mUTUAL fUND mANAGERS READ ALL THE LATEST MAGAZINES AND THROW DARTS AT THE LISTS THEY COMPILE…
Fund managers and WS brokers make important decisions by A) hiring newly minted MBA’s or math PHD’s to design or decipher complicated algorithms not necessarily based on reality, B) hiring a Russian immigrant computer programmer to electronically front run the trading at the exchanges and probably the futures markets as well, C) having an inside relationship with the capo family of big Fed Res banks and their numerous moles in the right places, D) influencing the SEC, CFTC, and the congressional financial oversight committees to never investigate the big players.
Just as no amount of money should be put in circulation that exceeds the increase in wealth production, so no greater profits, on average, can be realized that exceed a zero sum game in a fairly run trading climate. In this respect today, Los Vegas is more equitable than Wall Street. Thus, maximizing profit potential can only result in a fairly low rate of return based on the actual growth of wealth. All the rest is based on gut (fear or hope) instinct or a genuine working system not available to the common investor.
With a zero or near zero return on T bills, bonds, savings where is the money to come from for any return to exceed zero or near zero? It must come from manipulation of the market or informed speculation in the markets. I do know that some VERY few traders have a legitimate trading system that can beat the market and they wisely keep it to themselves. You can be lucky or you can have an ‘edge’. I’ll take an ‘edge’ every time.
How to invest? Only that which you can afford to lose. If you do succeed, save half and reinvest the rest. Greed is your enemy.
And finally, if you can truly handle it, the futures market with its high leverage is the best place to realize above average gains.
On the note of Gold, my opinion is buy Gold you can touch and feel, have it second appraised, its yours then. Gold certificates if the company holding the certificates were to go bankrupt you could lose it all! If you are afraid of the tax on precious metals start a small denistry supply business, what you dont sell should be able to be written off your business taxes as a capitol expenditure/capitol gains would apply if you resold it for a profit after the original basis was taken out. Another good buy you see everyday, when people have change laying around, check the quarters, if thet are pre 1964 the quarter has about $2 worth of silver in it. Give them a quarter in exchange and you have increased your investment 10 fold in a 5 min transaction.
i trade proshares.
http://www.proshares.com
when the market (s&p 500) is going down
i buy sds
when the market is going up
i buy sso
this week i gained one doller per share.
in Physics every thing is a wave.
follow the wave.
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
ANSWERS:
1. Domestic & international stocks – short term sector rotation and & use ultra funds
2. Bullion – only through ETFs
3.Energy – staying out for now, but mostly small & midcap
4. Foreign currencies – Options on ETFs
Question #2: How do you know how much of your money to invest in each area?
ANSWER: Getting better at money management
- 30% Cash to jump on a compelling opportunity
- Rest divided into 5 – 7 positions max.
Cut losses within 20% for stocks; 40% for options.
I believe most professionals study the industries and individual company balance sheets (after doing appropriate ratio and volume screening) to determine investments and recomendations. From the investor
viewpoint, it is frustrating when many talk of hedging with puts and calls when we may not have the knowledge or capability to execute these to protect our position as they do. This tends to provide a vast gap in the return of the “professional” versus the amateur. Also, the method of professionals in computing their returns is generally misleading. This leads to scepticism and makes it difficult to make your decisions particularly when many “professionals” (as mutual funds) do not make their appropriate index.
I AM READING AND LEARING THIS NEW FIELD AS I DONOT HAVE EXPERIENCE IN BUYING AND SELLING INTERNTIONAL STOCKS /BONDS/CURRENCIES/BULLION/NATURAL RESOURCE. I BELIEVE THE FUND MANAGER ARE RELYING ON THEIR VAST EXPERIENCE AND HAVE EXCESS TO VARIOUS TOOLS TO GUIDE THEM TO MAKE THEIR DECISION.
I AM A CAREFUL INVESTOR AND WOULD NOT INVEST 25% OF MY TOTAL INVESTEMENT THAT I CAN SPARE AND KEEP IT MOVING IN BULLION , NATURAL RESOURCE AND CURRENCIES. HOWEVER FOR THIS I AM LOOKING TO HAVE SOME ONE TO GUIDE ME THROUGH TO WHAT AND WHEN AND HOW MUCH TO BUY AND SELL.
I follow four rules: (1) Above all protect the “money tree”. My first rule of making money dovetails with the Buffet/Soros philosophy of trying hard not to lose any. (2) I do my homework and invest on the right side of major economic trends. In line with the preceding I “Buy and Manage” risk rather than try to contain risk through over-diversification and “cruise control” (buy and hold) investing. (3) I buy strictly value and turn over my stable of winners in line with specific objectives (e.g. appreciation by amount of dividends and transaction costs) (4) I do not speculate in highly volatile and technical, non income producing investments nor do I follow typical financial planner “cookie cutter” approaches to investing being peddled to the masses. I track very closely the weekly changes and the moving average of the US Dollar Index, Price of a Barrel of Oil, Price of Gold/Oz, Commodity Index, VIX and Changes in the Yield Curve and subject them to rigorous quantitative analysis. I use this data to map out and adjust my strategy and my investments in combination with a number of very fine publications that address the issues. At the moment I am roughly 30 percent invested in high dividend yielding ETFs, 25% short term reserves and 45 percent in a combination of a short term investment grade corporate bond fund and a short term bond fund (both from Vanguard).
As a post script to my 4 rules and approach to investing, I use a StockFinder software to ferret out investments that meet my criteria and bounce them off Morningstar premium advisory comments. Among the other resources I rely on is obviously your very informative newsletters and web seminars.
Precious metals make up the pie. The pie has a certain value. If you make the pieces smaller so more people can have a piece, it will give advantage to those who got the first few pieces. Take Gold or Silver. If you had a piece 10 years ago, it is worth more now, than ever. It is because you can print paper but metals you have to dig out, refine, etc. Even though
we are not on the Gold standard it will still go higher, not because it increases in value, no, becauce the means to aquire it has been eroding.The paper money. I stick with with things in the ground that are used and useful. Gold just sits and looks nice, Silver looks nice too but it is also used up in many applications and it is gone, like in solder. So we need to dig out more. Oil does not look nice and when it is used up, its all gone. So while we still have some, more people want it, use it up, and want more. Supply will be a big problem and you better have some metal to by some oil.( Or by a pedal powrred rickshaw) There you you have my reasons.
Well the pros should be using asset allocation strategies, having considered the fund’s underlying investment objectives such as country specific, theme specific, large cap, mid-cap or small cap, value versus growth or blend or some combination thereof.
Martin, you know that it is not easy for an ordinary man to just decide in a jiffy which company to invest his hard earned money. People take extra carefulness when it comes to money and investment to eschew the risk of not making profit or establishing business and another man is reaping the gain.
Wise people rely on the advice of experts like you, I cannot be exceptional, I equally rely on your expertise advice.
Most fund managers pick the big guys (high cap) in their bets, from what I read most mutual funds do not make money.
I havent the feintest idea & some of them probably fit into that category too.
I live in AUSTRALIA & I have a heap of gold shares & I am wondering how I offset your falling dollar?
I look at and invest in the one big trend. Am always early but that gives me the extra early power kick and an easy out. Got out of Real Estate in 2005. Got into Precious Metals in 2006. Am bunkered down for the next 2/3 years minimum. Paid for Real estate, No debt, Low expenses.
60% net worth in Physical Metal only. As soon as I get Paper Currency, I move it into Real Metal Money. I do not trade, do not do Stocks, Bonds, Treasuries, Forex. The whole works is based on a system that illusory at best, criminally fraudulent at worst. Systems and charts are pap for the masses IMO. Investors subscribing to whatever method that gives them permission to gamble in the direction they prefer. The system is set up for the house to win over time. If the Currency holds value, capital controls, tax grabs and means tested benefits will depreciate it to nothing. It’s not like the Fed is going to see the light and stop robbing the populous now. If you have a window of profit? It is just because they haven’t found the right sized rock yet.
Anyone who is not in asset containment mode right now is about to get their assets handed to them.
You are not doing your readership any favors by letting them think they can ‘play’ the system and win. I read your newsletter to reaffirm my resolve to hold pat. The hard sell has echoes of the pre tech hype…our system is a sure thing. etc.
I’m Waiting for the Earth shattering Kaboom… there is supposed to be an earth shattering kaboom?
The only winning move is not to play. IMO
Hey, You asked. LOL NM
My original financial advisor pretty much taught me to do this:
1. Keep the number of different investments to 5 max. for manageability.
2. For simplicity, allocate an equal amount to each.
3. Follow the daily performance of all the investments available to you,
that way you will be able to see how your investments are doing compared to all
the other investments available to you, and can reallocate from underperformers.
4. Diversify between foreign, mid-small-large cap, bonds, utilities (energy), and
keep one portion in fixed interest.
(During a general market decline – move all funds to safety (bonds, fixed interest, etc).
(During a general market advance – move funds back into more aggressive vehicles).
Martin,
Decision-making by the big fund managers has to follow the crowd for the most part. If, as a big fund manager, you stick your neck out and go way beyond the crowd and get it wrong, your business will be creamed!
Much safer to stay with or near the crowd, as few get badly punished for being as right or wrong as most others.
The exceptions are the boutique fund managers – but how many of these survive for more than a few years?
Cheers,
John.
The answer to all of your questions is that I read a lot to become aware of the macro environment, whether this is domestic, global or certain markets like emerging markets, currencies and commodities. But after this I try desperately to find individual companies with outstanding fundamentals at a fair price. This is the main course. We have a company right now that has outstanding fundamentals and which has voluntarily but reluctantly caused a macro moment for even his firm. It has risen ten percent in just a couple of days. When I see this, I usually go all in. I don’t diversify per se (as a means of spreading risk) If I don’t feel certain of something–and I’m not talking about gut feelings, I mean if a good solid analysis of the situation whether it be micro or macro (I consider speculation a macro activity) it is the analysis that counts, not my gut. And I frequently have a portfolio of fewer than five and often one or none.
Self investments through research and publications has proved far more prudent then deploying services of brokerages in the last decade.
Q.1 the managed funds have a very large basket of shares… basically if the market falls they go down too. Q2. every share I buy must have a yield, steady shares only, utilities telco’s, major food retailers. If I want to gamble I go to the races.
I very much enjoy reading your investment info but as it mostly involves US., and World wide investments, my portfolio is simply not large enough to participate. My investments consist of blue chip Canadian equities, eg., energy, precious metals, communications, financials and industrials with a few spec stocks. I realize that the diversification is limited but at age 79, I like to go with what I know and am comfortable with. I have read your latest book and am amazed at the accuracy of your predictions, as well as the efficiency of the various companies that you have “master-minded.” many thanks…Sam.
Reading economic pages in the press, seeing what has happened, I have come to believe that most decisions made on Wall Street are predominantly self interested. I prefer to listen to Claus Vogt, to Martin Weiss and attempt to learn what is going on in the world. My decisions are made for medium long term investments in a chaotic world. If Wall Street was so smart and really concerned about the portfolios of others, we would not be in the situation we have today.
my main problem is that i keep getting tips for ETFs investments which turn out to be great with good profits.
My dilemma is that i am from the uk and i cant invest into these ETFs because everyone that i have tried in the UK dont list them on their markets. It would be great if someone could show me a way around this. I am sure there must be many uk citizens with the same problem
Hi
I am only a small fish in a very big pond and I usually invest in energy or in precious minerals. Hence I keep to mining, oil and gas. Lately I tried JKX though the gain is small at present. I avoid technolgy as you have to be very knowledgeable about such things.
Being on a pension I deal in a few thousand pounds at a time.
Thank you for your interest in such a small invester.
Regards
John Gillard
I believe that fund managers decisions are based on intelligent guesses, they are better informed than most private investors but they are handicapped by exaggerated fears of the consequences of their actions. Whilst they believe that they a well informed in reality no-one and no group of people can be sufficiently informed to be able to make a single investment without making a guess about several key factors.
In strict truth there does not seem to be a way of determining profit potential accurately. Equally the it is not possible to assess likely risks, I do not know anyone who can faithfully list all potential risks.
Every fund manager must resort to vast experience and cool assessment of personal competence in order to be right in three decisions out of five.
A. Wilkinson
Professionals might have computer programmes to analyse situations prior to making decisions.
Maximizing profits for them and not necessarily the customer is their objection.
Dear Martin,
for the guys dealing with real big money, it is a different game. They have big research departments, do have some “insider” information but the most relevant point is that they can sit out some trough and are therfore able to buy if private investors are to anxious to invest.
Have a look at most of the fund managers (They deal only with big money) . Although they have plenty of research available they rarely beat their index. I conclude that they are also driven very much by gut feeling (leaving the market when it is down and reentering it when it is up again).
Look at all the zombi banks – when their guesswork was still working, they made plenty of money but now they need one infusion after the other. Is this a reliable structur of risktaking, a sound business model?
The real big ones have anaother advantage: They are not ony floating in the market like small investors, they are moving the markets and that is a big advantage.
Best regards
Andreas
The Presidential Plunger team manipulations that guarantee insiders the win at the expense of the ignorant retail investor.
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Personally, I would invest in each market based on how good my understanding of how each segment would function according to market expectations. Prior most on my list is capital preservation before capital appreciation. Therefore markets that i recognize i lack good understanding, I would leave that investment out totally even if the hearsay is otherwise.
Question #2: How do you know how much of your money to invest in each area?
If you have done your homework properly, you should trust your own judgement to put your money where your mouth is. At least 30% of the fund set aside for investment in that particular market segment.
I think the managers look at debt, expenses, capital, and risks, and have access to information that most individual investors do not have. I would hope they would have more knowledge of derivatives, etc. that is unavailable to individuals. However, the credit crisis of 2008, and housing crash certainly makes me wonder if that is indeed the case. I am also curious about their pressures to buy/sell, and what other factors than profit for clients go into those decisions.
Their decisions are based on their personal need to survive and consequently adopt a sheep herd mentallity in making their decisions… can’t be a bad decision if everyone else (professionals) is making the same decision!
I have no idea, but they would not be fund managers if they were hugely successful!
I try to only invest in companies that I have read quite a bit about. I mainly invest in Gold and Silver companies because that is where I have done most of my studies. I currently do not trust banks, bonds, paper currencies, China and most foreign markets. I do not trust the US and South Africa in gold and silver. I do trust Australia, Canada and Mexico. My main gold investments are in Canada and my main silver investments are in Mexico. I like Nova Gold, but its main holding is in the US. I will move in and out of it, but will not make a long term commitment there because of Barrick Mining (its current partner-a long term hedger and legal bully) and the current US administration. I carry a grudge against GG because of it selling off its 325 tons of gold when it had been bragging about it and I had invested because I considered it part of the capital assets. They sold it for “retirement reasons” and the company lost the whole asset suddenly. I hold a few oil stocks and those are in the US. The US will have to deal with the enerrgy issue whether it wants to or not. One of the great investors has said “diversification is for the uninformed” and I kind of believe he is right. With no more assets than what I have they all need to work over time. I’ll stay in the asset group that is in the current bull market. The assets take turns and I will move about according to whose turn it is to run….Right now that is commodities…especially precious medals and energy.
Dear Martin,
I am retired. I have 75% of my liquid assets invested in gold stocks and 25% in cash. I am 0.08% down on my investments in gold stocks since 2009. Currently there is great volatility in most asset classes and one must be cautious when investing, and really do a lot of homework before one invests in the stock market. My RA’s are currently at SAR 3m and it has grown by 1,5% since mid 2008 taking into account the financial crisis, my monthly annuity payment by the fund as well as the contractual fee that is paid from my RA.
Mutual fund managers base their decisions on publicly available information, including balance sheets, quarterly results, market placement, business plans, press articles, in other words from the most obvious sources; what you would gather from reading the Financial Times, visiting a company’s website, attending a company’s conferences, etc.
Mutual funds managers with large FUM however must invest investor’s funds in accordance with the mandate given by the Board to the investment committee. The investment mandate only allows investment in specific equities (which may exclude small caps, precious metals, ETF’s etc), bonds, treasuries. Such funds are in most instances also regulated by the relevant Financial Board of the country and is also subject to defined prudential requirements in order to maintain a minimum liquidity level. In most cases fund managers aim to equal or better a certain benchmark, in the case of the USA it may be the S&P500.
100% with stop losses,65 % on stocks,15% gold ect.,15 % energy and resources,5% currencies.
On Stock investing I analyze the financials to see if they have real things like cash and fixed assets, as well as checking on the owners past reputation and how long they have been running things. I feel the owners should love the company and be able to run it without borrowing from the stockholders and the banks (Weiss, Austrian Economics)
for the past year i only invested in bank stock just one bank bought low sold low in out up about 50+ % might win or lose
I have no system and go with my instincts and rely on information from the press and financial advisor. It would be good to have the system and facilities to look at the trend and knowledge of technical analysis to decide before deciding on investment but due to lack of time sometimes i go with the instinct.
How do you think mutual fund money managers and Wall Street brokers and pros make these all-important decisions?
They look for companys that can grow earnings.
Are they just guessing? Shooting blind? Or do they have tested, reliable ways to structure portfolios that truly do minimize your risk while maximizing profit potential?
They look at the history of companys with earnings that are predictable and whose stock prices are relatively stable. They pour over their balance sheets, profit margins and study trends.
I think they have special personal ($) or employer required interests ($) in the recommendations that they make; some eveidence of that is they NEVER recommend getting out quick of a stock that they recommended in the past.
Mutual fund managers are relying on history. History is no longer reliable. Hence, with governmental interference (money printing, stimulus) mutual fund managers are in worse shape than the rest of us.
I believe that most Wall Street analysts, in recommending where to make investments, first
look at the overall growth projections for various countries for the year ahead. To this, they add factors such as political risk, economic stability, currency, and GDP history. Once they have determined which countries offer the most economic growth potential for the coming year, they will attempt to identify the sectors of that country’s economy which will benefit the most. It is these sectors, in high GDP growth countries, that they will earmark for investment. Some of their investment recommendations will be for specific companies in identified high growth sectors, or ETF’s that address the same. Other investment recommendations would be for specific companies in the US, or other countries, which are multinational and feed into the sales/purchase cycles of the high growth counrties and their associated high growth sectors.
I work for Fulton County which has two retirement plans: one is a 401A Deferred Compensation Plan managed by Mass. Mutual, and the other is similar managed by Nationwide. The County has a larger match of the first, and a very limited match of the second. I have tried to put a fairly large share in foreign based equities, but no options are available for gold.
Unfortunatly I was already 65 when I came to work here and am now 71 so I only have about $80,000 accumulated, and a life expectancy of less than 15 years. I intend to retire in 2013 if I have enough income to survive with this tiny nest egg, a little $32,000 a year pension from a former employer, $20,000 a year in Social Security, and $4,000 from a trust. I enjoy my job, but I am beginning to feel the ravages of time on my knee joints and memory, I don’t want to outlive my sources of income.
It scares me when I realize that the market is led by emotions and not much on hard facts. Are there any hard facts to go by? I am a conservative invester. Try to stick to tried and true companies with every once in a while I take a small flyer on a hunch! Thereby proving my own theory about “emotions”.
Most fund managers do use technical analysis to make decisions, but their view is narrow and because of this they are really flying blind. They rely on false government statistics, and don’t see clearly what the broad indicators are saying. They don’t understand or appreciate cyclical bull markets. They don’t care that the Fedeal government is destroying the dollar. I believe that as along as they prosper, they don’t really care if someone else loses.
Dear Martin:
* Deciding where to invest – locally or over seas? I invest locally as I think it is more convenient (data, my preferred brokerage and follow-up at my finger-tips) + (perhaps) a feeling of trusting more what I know first-hand.
* I do invest only in stocks that return monthly dividends. When some of them cut-down the dividends, I sell them and invest in others offering higher returns. Most of these are of the type “income trusts”, which I will have to deal with before January 01, 2011, when they should lose the privileges (reduced taxes) they are still enjoying now.
* How do I know how much money to invest in each area? I do not know – I just decide, based on the yield that “income trust” is paying as dividends.
And Martin – thanks for your work and advice.
I use a% of 60% bonds & 40% stocks using Vanguard Iam 62yrs old
Thats what i pay your service for, to tell me what to invest in
Rick
I split my allocation 33% conservative investments such as money markets, bonds, cash, and treasuries. 33% is invested in stocks with most of this being in foreign mutual funds. 33% is invested in land, gold, home and ownership in business partnerships. I’m not trying to time the market anymore because I’ve concluded no one, absolutely no one can guess when the market will dump or jump.
Martin – I will hold my position on gold and silver for now as I see this market static. If gold drops below $1080.00 I will then buy more. I plan to move more into natural resources, energy and foriegn stock. No bonds, especially U.S. and European.
I believe money managers follow charts, quarterly and annual earnings reports, etc and when times are good, they decide which stocks to invest in to show gains for clients. When times get dicey, money managers want to keep money invested because they get paid by amount invested as a percentage. I have not found any money manager ever telling me to take money out of the market. I have had to insist. And these seem to be good ones. However, it is a business. That’s how they make their money. Lesson: stay on top of investments and make decisions that need to be made.
jtl
Investing is easy. I buy physical gold and wait for what Ludwig Von Mises calls the “Crack-up Boom.” In my humble opinion the stock market is controlled by the ‘power elite’, and until the Federal Reserve is abolished we will never have a free market.
my mentor and i have discussed that alot of the time, hype is all there is. that being said, when we spoke of allocation and amounts to fund them, we always wound up with this thought: if you hold alot of different assets and only one or two asset classes were launching for the stratosphere in ANY form of return, it occured to us that perhaps holding just one exploding asset class is better than a little of as many as possible.
that being said, my mindset is one that looks ahead to hyper-inflation and financial combat leading me to hold natural resources and hedging against our currency for PROTECTION and hopefully, a nice return.
percentages are high in terms of the amount of holdings but i always wish i had purchased more gold, lets say back in 1999. that is what guides my decisions on the subject.
Martin,
I believe the fund managers, brokers, and buyers have their own agenda for any given portfolio. I would prefer them to first contact the individual holder to question his/her preference. As in most cases, the fund manager, broker, or buyer buy and sell according to what they feel is the holders wants/needs. All to many times – that’s not the correct case.
Kathleen
Question #1
1. As a Euroland resident I count my money in Euro but I invest in a variety of countries.
I buy US stocks mainly because I currently believe in the USD (short term) and my decisions are based on reading both self proclaimed experts and general economic news. I make up my mind by selecting specific categories, namely Energy, Junior Mining in gold and silver and certain Pharma stocks (both US and Europe). I also make it a rule never to commit more than 2-2.5% of my portfolio to any share I invest in.
2.Gold bullion ( I dot like other precious metals) is another story. At the age of 69 I am an old fashioned person and a believer in gold. I have a long standing position because I was convinced we were going to get a repeat of 1929 and more recently of hyper inflation, all be it in maybe 2 years from now for starts. I maintain a physical position of 30% of my portfolio in the metal.
3. Energy etc – I think I have answered it in 1 above
4. I do not like bonds of any description and as to currencies I tend to stay with ‘western currencies’ and get guidance from Elliottwave International. I have for short periods looked at the Aussie dollar as they count under my ‘western’ thinking.
As to your question #2 I think that too has been answered above
Lets see what fun I am in for ey?
I am going more into rural undevoped agriculural land that is under utilized. Noone is making more land and every minute there are more mouths to feed.
The professionals seem to use indicators that tell them when to make an investment decision. Reading Claus’s columns has been informative for me since he seems to have time-tested indicators that he responds to. Larry seems to go with fundamental trends as well as technicals. A combination of these would probably give the best information.
I joined your group hoping that I would be able to determine what to invest in – initially I just watched to see how your advise panned out. I have now started to invest in gold, energy, China stocks hoping that your adivisers are correct. I find it disconcerting getting the other advise from so many sources – Small Cap Inv., Daily Reconing etc – I am not sure if these are reliable and trustworthy – and I wonder why your main advisors don’t give this investment information – this confuses things.
I do not believe they necessarily develop a structured portfolio or do they emphasize minimizing risk but rather they have an investment style that guides their actions.
It would be my guess that the “Pros” use statistical data from all sorts of economic databases along with observing political trends as best as they can.
Their performance however would suggest that they are trying to make an educated guess, and they guess wrong more than right.
Have yet to see and investment advisor consistently outperform market indices.
Q1 ans: I try to diversify but this rarely works out well or even as intended. Generally I would only invest in industries I at least had remote understanding of.
Q2 ans: Until the crash I tried to be fully invested and purchased stock with a reasonable track record.
I guess i try to determine which area of the economy is due to be
be popular and make my moves.Right now a large number of
analysts feel Gold will continue to go up in price.I will stay invested
in this area.The current feeling to be invested in china,Brazil&India
has me in these stocks.I use certain analysts such as Martin Weiss,
Larry Edelson,Steve Sjuggerud,Alex Green,Keith Fitzgerald,Tom&
David Gardner and others to supply me with ideas.then I make my
own decisions.I try not to get heavily invested in one area.
I have invested in gold and muni bonds plus a various other investments over time. I presently have the above plus approx. 90% of my money in cash. I am waiting for the next crash. I am seriously considering in slowly moving into a diversified index funds or etf’s where the fee’s are low and stop trying to be able to try and figure out the best investments which if anyone could do that they would be not reading any of the financial newsletter, blogs, or investment advisors.
They should and probably do the research, at least I hope they do. I do have a financial advisor, although I still research and buy income stocks.
Martin,
1.I am investing in both foreign and domestic stocks based on the advise of Weiss advisors. This pas year is the first for foreign investments. 2.In have not invested in gold or silver just EFTs and mining companies. 3. Currently one energy stock and several natural resources. 4. No foreign currenies, too hard to follow and not much time to watch and 5. No bonds, don’t understand them and too volatile.
Questrion 2, How much to spend? I currently have less than half of total funds invested. Usually invest invest a max of $2500 in each except gold EFT. No equities over $200 each. I no read other information; but, find that they are attracting attention with a pie in the sky ad. that may or may not be true and appears to be very speclulative. Also, I find may of the promoters to be about a year behind the times as compared to The Weiss Group.
I echo the sentiments of the other Greek-sounding person J Tamvakologos. That is why I read your material, for added information
Even when your advice is to invest in China I know it is still to much risk because they are not a free country and could nationalize any or all industries as did venezuala with oil . Then any investment is $$$ gone . I know it is risky advise .
In answer to your question. Truly good brokers do research. They look at which markets are effected by certain events, who the players are and what they are doing. Interpreting that information takes some skill and some guts. Like a chess game of sorts. This is not to say that there are probably some well composed statistical models that may weight one venue over another. But then again these models are just another form of information gathering.
In anticipation of runaway inflation, I am primarily in precious metal investments (bullion coins, mining stocks, etf’s) and inflation protected treasuries. Just a few commodity etf’s and energy stocks.
I think that fund managers use all data at hand, as well as using their own instincts.
At this point in time I suspect most fund managers are working from a”don’t lose” pov. coupled, perhaps, with enough diversification to allow them to try and catch an outlier.
The market is too volatile right now for me. I am sitting on a lot of cash and I have been taking my liquid revenue to pay off my kids mortgages because I think it is better to be debt free now. Until interest rates rise and I see that I am earning positively on every kind of investment I really don’t feel comfortable in risking ANYTHING.
I choose the allocation of assets based on what I see happening in the market at the moment (the reason i signed up for your newsletter and receive 3 others). I pay absolutely no attention to the commentators on the TV…follow them and you will be late to the dinner table 3 out of 4 times…It would be overly simple to say I am doing this or that because I change as the opportunities change. I still favor a high percentage of my assets in individual stocks because in the short run they are more predictable. However in saying this I am not a buy and hold kind of guy. If i can make 10 to 30% return in a few days or weeks. I generally will sell the stock and look to get into other positions….
However I do diversify in mutuals funds and Bonds with great track records and long time managers, the Spyders ETF, precious metals (mutual fund), etc…My past experience has proven on more than one occasion this diversification is necessary…
I like to be actively involved in what we invest in.
Regards
I think it’s 50/50 in all catagories,if anyone really new the future they wouldn’t be doing what there doing now.Remember what the word is INVESTMENT,no matter what your thinking this is not a savings account.INVESTMENTS CARRIER RISK TOWARDS THERE OUT COME,SAVINGS HAVE NO RISK AND YOU KNOW THE OUT COME.
Martin; This is my 2nd. letter on the same subjects; —Re; 1) I Follow Larry, Sean & Tony in that order. Based on the overtones of the above 3 and how emotionally they express themselves——Most importantly, I try to extrapolate; What financial class of person they’re talking too: i.e. portfolio of 200K, 500K, 1Mill., 3Mill., 4Mill., 4Mill.+— Additionally I try to do as much research as I can on Fidelity. + I try to put all reco’s. on 3 Alphabetized Watchlists and gauge the ferosity of their progress for a short period of time. Then I use a bit of advise from Sean: In short: “Bag those Gains & Get Out” (GLD is the only exception) —
—Why am I skeptical ??— 2 reasons: 1) I’m not sure which is the tail and which the dog, and who is waging what. The market does not seem to be breaking away from the administrations (seeming and hopefully, short term) control of the DOW. The Manipulated Dow seems to be dragging along most commodities, to an excessive degree. Secondly; Will the crazy Administration intentionally or not, trip China, Brazil, Russia, and the rest of the world into a downward spiral, by way of its severe moves. This I am most afraid of; I wish I had some measure or yard-stick on this. Martin perhaps you and Larry can help?
—TO ANSWER YOUR QUESTIONS CONFIDENTIALLY: 4 mill. @ Fidel. — 1.5M Very Sht. Term T-Bls. — .8m GLD–.4m Gold Mines or related to G— 1.1m all other Commidities in China 30% –.6m remainder of World.– Thanks for the Top 10 Brazil Picks — It helps a lot when you talk $ amount investments, as in the aforementioned Brazil Picks. —–Hv. bagged .35m pro. since I started w/ you.— I hope the above is helpful
Since my financial advisor who is affiliated with WellsFargo/AGEdwards has increased my portfolio I am quite pleased with her suggestions. I held on to my portfolio when the market tumbled, but it has all come back since 2008. I do invest some money on my own as the price for a trade is only $7.00 as opposed to what WellsFargo charges .
I usually look for stocks that have to do with energy and green investments. Then I research them and choose what appears to be growing. I look for their EPS and dividends.
How do money managers and Wall Street guys do it? Wow, they all have their own ways of deciding based on what I hear on CNBC and read in various newsletters.
Chartists, fundamentalists, you name it.
And they all have a different opinion of course. The Mutual Fund Managers scare me the most because if they always have money coming in they have to find somewhere to put it.
But I would guess that deep down they are also using instinct somewhere in the process. That really is what it all boils down to, that gut feeling of which way to go. And you just hold your breathe and push the button on the screen!
However I am sure with money market managers there are stict guidelines that have to be followed.
Dr. Weiss:
HOW DO YOU THINK MUTUAL FUND MONEY MANAGERS AND WALL STREET BROKERS AND PROS MAKE THESE ALL-IMPORTANT DECISIONS?
It all depends. The Goldman Sachs, JP Morgans, et al use a combination of inside information from their wholly owned subsidiaries (fhe Federal Reserve, the Treasury Department, the SEC, FINRA, the GSE’s, and other “consultants”) and their own clients’ intentions to anticipate market set-ups and positions themselves to make money trading. Then they add a dash of front-running by receiving tradinig information BEFORE it gets to the other traders on the Exchanges, ladle in some high-frequency trading, add a pinch of help from the President’s Working Group on Financial Markets (aka “The Plunge Protection Team” or PTT), whip in a generous amount of “tips” and “rumors” they inject into the markets, mix in some useful insider trading information and engage in naked short attacks without any fear of meaningful SEC action, add a drollop their own “projections” made to a gullible public through the mass media 80% controlled by five large corporations, and–voila!–markets move and they make insane trading profits. HOW ELSE COULD A FIRM LIKE GOLDMAN SACHS MAKE A TRADING PROFIT 98% OF THE TIME IN ONE QUARTER!!!!?????!!!! I’d very much like to know the answer to that question to dispel my complete and utter distrust of the American financial markets. I might add that it helps to be able to control the flow of government economic statistics as redefined and twisted to mold public perception in the “right” way, e.g., have the Bureau of Labor Statistics “adjust” the U3 employment numbers by the ridiculous Birth/Death model of new versus shutdown buisness consistently report increases in areas such as construction during a complete meltdown of the construction industry.
The rest of the world orbits around the Goldman Sachs, JP Morgan, et al players to use models and strategies to hopefully make postive returns based upon various combinations of algorithms (Fibonacci, Gann, Elliot Wave Theory, etc.), market oscillators and second derivative calculations etc., and fundemental analysis. I do not know how well their models deal with what appears to be suspiciously manipulated data (as per the above Bureau of Labor Statistics U-3 employment numbers) and subject to oddly huge volume transaction spikes that suspiciously seem to appear at critical points or at times when large profits are to be made. I believe that the manipulated data, the kinds of actions such as naked short selling taken by the “Hugemongous Brokers and Bankers” (not my term but you may look it up to find the source), and Wall Street’s and Washington’s coordinated market interventions (such as the after hours futures market activity) render such models and strategies much less useful today than in the past, especially at inflection points.
Now, don’t get me wrong. I believe most are honest–I credit you with being honest–and desire to make money by providing a valuable service to others. Then their are those who focus on maximizing their own return before worrying about their clients’ interests. The financial community is just a microcosm of our society–a few saints and sinners, some selfless servants and some selfish scam artists, and a huge mass of average people like me who go on with their lives believing the world is mostly a fair place until slapped in the face with something that just doesn’t pass muster as seeming to be equequitable.
If you doubt the validity of these seemingly jaundiced comments, I’d be willing to go over my sources to provide factual data to back up my assertions. (My services are fairly priced–like yours.) Don’t get me wrong. I don’t think that there is a “conspiracy” here. What is occurring is simply the working out of a very logical mutuality of self-interest between Wall Street entities well connected with Washington. As you pointed out in your excellent book, The Ultimate Depression Guide, we are in very deep trouble. Whatever Washington and its allies think can be done to prevent this next Depression, WILL BE TRIED even when it skirts the law. If you doubt this, then ask yourself this question: How in the world Secretary Geithner last Christmas Eve could commit the US taxpayer to unlimited support of FNMA and Freddie Mac over and above the $400 billion authorized by Congress without a statute authorizing such action.
I still laugh at the nutcases that talked about silly plots and plans by secret cabals. I still laugh at the fringe elements that see bogeymen everywhere. But after following the events of the last three years I’m no longer laughing about the fairness of the American markets. I also am sure than I’m not the only one thinking along these lines. After all, why are all so many individual retail investors sitting out of the stock markets and putting money into fixed income despite the marvelous green shoots popping up in the press and the tabloids and Washington’s pronouncements? I’m not so sure that this is a good idea, but it appears to be what is happening.
I didn’t lose my shirt in the markets the way many unfortunates did. I even made a little money. Today you can’t invest without taking huge risk, nor can you sit on the sidelines in cash without taking huge risk. One thing to keep in mind while trying to decide what to do–always think first about what Washington’s goal is. Washington is dedicated to saving Wall Street. Whatever Washington does will follow from this simple fact, and you need to think about the implications of this fact before you make any investment decisions or chose any investment advisor.
Thank you and keep up the good work.
Very Truly Yours.
ARE THEY JUST GUESSING? SHOOTING BLIND? OR DO THEY HAVE TESTED, RELIABLE WAYS TO STRUCTURE PORTFOLIOS THAT TRULY DO MINIMIZE YOUR RISK WHILE MAXIMIZING PROFIT POTENTIAL?
All of the above apply to the universe you specify.
Very Truly Yours
Hi Dr. Weiss and Associates–
I think that most brokers probably use technicals, charts, systems, etc–but which ones, I don’t know. My broker checks his computer to see if something is underbought or overbought, if Ed. Jones is recommending buy, sell, or hold, etc. I think that the economic theories that a broker and/or the financial company follows influence decisions, and that broker/company honesty, ethics play a role too. Seeing what happened with Berrnie Maddoff and other examples like him caused me to see the need to be ultimately responsible for my own financials. The repeal ten years ago of laws that helped protect us from what happened during the Great Depression only proved that mankind is still a selfish and territorial animal and there needs to be checks and ballances in place. No, we have NOT, as a species, evolved beyond the need for those checks and ballances! Edward Jones, thus far, seems to be a good company to be with, and my broker appears to be doing his best, honest job for me–but I am ultimately the one responsible for my financials, and so endeavor to do my own due dilligance. By the way, I also blogged on your last weeks question, and appreciate the opportunity.
sincerely,
Lisa R.
Mr. Weiss,
To answer your question about how the pros make their investment decision I will have to guess that they use a combination of computer programed investment models combined with input from research assistants to reach the decision of where to put their money. I also think they spread their investment around to many differing investment vehicles so that if one is down, another should be up and hope at least one will show a positive result. Even with the advantages they have at their disposal I have to think that “gut feelings” would play a part in their decision.
I would say that most have charts and moving averages for the total market and individual companies for buy and sell signals, as well as to what sectors are under or over priced. They also need to look at past history for the dollar, interest rates, etc., plus keep an eye on government and politics for indicarors. I am 84, and the future for our country does not look good. Most of my money is in gold, natural resources, and foreign country ETF’s
I would certainly hope that fund managers have tools that guide them through their decisions. I am sure some is gut instinct but I hope most is based and good reliable information.
I have 25% of my investments in gold, not sure where to invest money. I am mostly out of the stock market, 25% in money market. Would like some advice on what the best stock is to invest in now. My husband and I are in retirement years.
Martin; It would be a financial diaster if the Wall Street Pros did not use past history and a good guess what Washington will do with securities. We know that even the most experienced make bad descisions. Mutual Funds may use the same descisions except it is a group descision instead of individual descision making. I am concerned that after the banks showed the financial world how to cheat, that mutual fund drivers may take more than a just fee and hide the costs to the clients.
Mutual Fund managers and Wallstreet traders are market makers and trade for small increments and their commissions. These guys are just hyperventilating and are not even worth asking for advice.
With minimal risk funds available, I don’t rely on their moves at all. Rather, I look at economic fundamentals, specific company trailing data and my personal forward projection, management performance and the personal time horizon available for special situations suitable for myself.
In the past, I have learned that the buck stops with me, myself. Right now, I find a strong cash position very desirable in order to take advantage of upcoming bargains.
Regards, Harald
1/3 of my investments are in companies/sectors that are out of favor or where pricing is at historic lows such as UNG, VLO, GAR, C.
1/3 are diversified companies such as 3M, Proctor/Gamble that pay dividends.
1/3 are in tech & mining companies (some speculative) such as VG, BAJFF, PAAS,PAL.
I believe that they have tested ways of investing but they concentrate to much on funds
with a good record of returns. The problems in todays economy is unlike any in the
last 70 years (as you point out) and until we can see what the results are of those problems and the government responses are the target should be safety and a hedge against inflation and deflation.
Greetings,
My understanding is that there are rules-of-thumb regarding percentage of loss vs percentage gain needed to offset loss. So, no one would reasonably want to risk more than say 1/3 and have the chance of losing it where it would then take a 50% gain on the remainder to offset the 33% loss. Making 50% might be doable whereas if one risks say 50% and loses it then one has to make 100% on the remainder to regain the loss which might be somewhat less doable.
The other part is that one would like to develop some understanding of how fast different asset classes would be likely to advance or decline and put more money into that which would move more (up or down based on the use of options to magnify the profit/loss potential for such identified asset classes). Obviously, this presupposes that one has some kind of reasonable idea of what various asset classes are going to do… This might be reasonably accurately accomplished by use of the historical cycle data along with technical analysis as well as an understanding of what is currently happening to develop one or more plausible scenarios regarding upcoming events over say the next few hours for really short-term trading or to three- to six- to twelve-months out for real investing.
Hopefully, this is a reasonable rendition. Would much like to hear the ideas from Weiss Research.
Bye for now,
– Dennis
As non essential liquid funds or sales of existing stocks become availailable I look for the what I think is the best place to invest it. I try not to be overloaded in any one area but do not follow any specific percentage. I do not invest anything that I am not prepared to lose.
I think the pros mostly follow trends. I doubt many make contrarian picks, except perhaps for some hedging.
Dear Martin,
Your two questions are not at all “simple”. Nevertheless, I’ll try to give you “a hand”.
Q1/1: Domestic/foreign stocks: I am relying on recommendations from several reports.
Q1/2: I have been waiting for the collaps of our “dept system” for 30 years. During this time I bought succesive enough gold- and silver-coins.
Q1/3: See answer to Q1/1.
Q1/4: I am thinking about buying cash Norwegian krone or/and Australian dollar.
Q1/5: Bonds: no thanks.
Q2: That’s the big question. Celente expects the “big crash” in this year, Mark Faber in
five or ten years. What is the FED thinking? If we only knew!
What are You thinking about investing into the VIX?
Kind regards
Christiane
What do you think about investing
I am splitting half of my money to play in Vegas versus the equity markets. I figure the chances of winning are about the same right now, especially since my subscriptions are not clear as to which way to go during this volatile market.
Since I am a member of your Weiss Inner Circle I make my decisions based on your recommendations for the most part. Weldon
I need help to all your question, I was unlucky to get in to the one Million dollar port folio where I lost a significant amount of money, bud I still trust your operations and your research with all your professional team, and some how I am looking to find the right investment to make up for the loses so I can by in to your programs.
I like energy and natural resources, foreign currencies, and bonds.
Best Regards
Mark Benabou
Question #1: How are YOU deciding whether you’ll invest in (1) domestic and foreign stocks, (2) gold bullion and other precious metals, (3) energy and natural resources, (4) foreign currencies and/or (5) bonds in 2010?
Ans: Approximately 15% of my portfolio is in GOLD ETF’s. About 25 % is in energy and natural resources mutual funds. About 10% is in domestic, dividend-paying individual stocks. About 50% is in foriegn bond mutual funds. About 5% is in cash.
I don’t have a formula. My proportions are the result of gut instinct. It would help if you could issue a general recommendation regarding the proper mix of assets classes for this market.
Question #2: How do you know how much of your money to invest in each area?
I am just new to this thing of trying to play the market. However; I have discovered that it is not “play”. It is down right gut wrenching to watch the stocks go up…. stocks go down…. funds go up and funds go down… I have decided to put my trust in your million dollar Inner circle. I was all excited about receiving your alerts only to be dissappointed to see that I was not qualified by my broker to make those kind of “deals” and “trades”. I need to find a broker that will allow me to do some of your Currency alerts! so far I am butting heads and getting nowhere. How money managers do it is beyond me. So give me all the help you can give me. Thank you.
I have been reading your money and markets for a couple of years now and have seen many changes in the market.I have never invested because for one thing i have no idea what I’m doing so I just let my $ sit and collect a small amount interest from a money market account. It’s safe and I know nothing about stocks or bonds. I still like reading your blog and your website. I’m 60 and never learned anything about the stock market but I’m trying to learn. It’s all a little confusing so I try to pick make believe stocks but of coarse they don’t make money. You should give a coarse to people who are new can learn about stocks. you know talk to me like I’m an 8 year old and you are trying to explain stocks to them
“if” is the smallest word in the dictionary! but has a big meaning! “if i could have gotten in on the groundfloor of IBM”,things like that. hindsight is 20/20 only after the fact! alot of people don’t do enough research into the history of company they are thinking about investing in, who’s in charge, who’s on the board of directors, is the company the target of a hostile takeover, & did the stock lose any of it’s value in the past year (which could be for more than one reason, such as another firm introducing newer technology that is better than yours) a diversified portfolio has been always a safe bet, not putting all your eggs in one basket. one good example is the diamond market, when this company somewhere in the Tampa, Florida area perfected the synthetic manufacter of diamonds, market for them went up overnight, it’s cheaper to make them than to buy them from the overseas diamond cartel, & they are as good as the mined ones. vance brown signing out
what used to be reliable to money managers is no longer…….period
Hello, It’s kind of rough making decisions with the market the way it is today, and trying to look ahead, that’s why I depend on your expertise,along with the rest of your staff. Right now I’m looking to jump into Gold, I feel it’s my safe haven,and it’s only a matter of time as soon as I catch the bottom or rather the lowest where I think Gold will be at, that’s where you come in. I would take a portion of money that would come from my latest profit from Gold, and also, as the economy stays firm and starts to grow, I would invest a small amount in stocks at your recommendations .
Experience is a powerful tool in the decision making process.
Q1) Watch the trend of the markets;
A) I also do a lot of reading and do subscribe to a few early market guru’s to
get a consensus of what the markets are doing and which of the stocks
fall into that category.
Q2) Gold and Silver — I watch what the US $ is doing and go just the opposite to
buy the commodities.
Q3) Practically all the natural resources and energy are becoming to a degree very limited
and all are of interest.
Q4) Don’t do much with this category.
Q5) Nothing in bonds. For an income source I have some Canadian energy trusts and
have some LLC’s in small family run oil drilling and development enterprises
which produce some good investment advantages and benefits.
Cheers
/s/ Lou Wood
Dear Mr. Weiss,
In my experience mutual fund money managers use a variety of resources to form their opinions on buys/sells. They use the fundamentals available from the company, third party newsletters of varied quality, personal and second hand research of the markets a particular company participate in, their own and their associates experience in forecasting those markets, and then present their conclusions to a committee of their fund managers. A composite of those opinions is then used to decide to buy or sell. They then use technical analysis to decide when to make their move in the live market. Many good post above delve into the various specific factors that are analyzed, so they will not be repeated here.
There is more lately an alternative method popularized by ‘hedge funds’ to trade shorter term based primarily on technical analysis and mathematical models of price behavior. However this form of analysis seems to have reliability problems in general use, especially in 2009.
Both types of management will use technical analysis to determine which market sectors fit their investment profile and restrictions as well having sufficient general interest to provide liquidity for the time frame and size of their investment.
Fortunately for us investors most of the information used by professional managers is available to us at the same time they acquire their information. However, few of us can actually afford to make personal visits to companies to assess the longer term potentials for success in their markets. This is a specific source of information that individual investors lack that fund managers have available to them in general. (Some fortunate souls are able to visit the work sites, learn and evaluate these businesses, and report on what they find.) Smaller investors cannot reasonably bear the additional costs of traveling to acquire the interactive element obtained from personal visits to companies or other investment vehicles.
Martin-Brokerage houses have all that staff “analyzing” financial reports from various companies, but I believe the recommendations they offer are from luncheon conversations with their colleagues-i.e., the “good old boy” network that leads to a common hypeing of a stock by all the major brokerages at the same time.
i.e., not some special insight or superhuman knowledge, just repeating what they friend at the compettitor thinks.
Mutual Fund managers are limited by the general purpose of the fund. Within those parameters, I assume they select investments relying heavily on computers to scan for investments that meet their criteria. They would then select by eliminationg investments they already hold and then pick the best of the rest. In the case of stock brokers, i assume the are also influenced by the investments their firm wants them to push.
We do it based on projected returns, prospects and market conditions. We don’t use formulas.
Most buy probability analysis of different expected returns in individual stocks and then market them as conservative, aggressive, value ,growth etc A lot of them buy other ’s research .Marketing is their biggest help to grow their assets so they can earn more.
Mike da Costa
I really don’t know if the pros have method or not. You would think that there is some model upon which to make judgements. In the end though, predicting the future is still a guess.
Dear Martin,
I am retired, (near 70 years old) Live in England and have to be carefull with my investments.
Lost money is not replacable.
I now look for best savings from Building Societies as I do not trust the market recovery yet, Governments tend to massage results & look only for good signs.
A double dip is still possible. I am waiting for more positive signs before getting back into investing in the Market. I will then only invest modest amounts in what looks like safe investments, with not all my eggs in the same basket.I do not look for long term investments.
Bill
Martin: Responses
Question 1: I invest in areas from Guruadvisor comments and where I believe the economy is going.
Select stocks/etf’s in what seem to be established areas of growth.
A key sub set to this question is first to determine If I even should invest anything now, how much of my assets should I commit and the timing. I fear how our leaders are handling our economy. I am willing to invest/gamble 60% – 70% but am not comfortable with that.
Question 2: Investment distribution: 85% Domestic/foreign; 5% gold etc; energy etc; 0% currency (don’t know this area enough); )% bonds.
This year I am changing my investment portfolio to 50% U.S. and foreign stocks, 20% metals-gold, silver and rare earths, 20% energy and 10% currencies; betting against the U.S. dollar where appropriate.
I had investements in different currencies and gold. My options on those investments is just based on info aroun the globe, that’s all.
I believe the vast majority of institutional investors and professional investors use predetermined systems or criterian to make their investment decisions.
Morning Martin,
I see money managers, Wall Street brokers and investment media pundits as having a array of diverse analytical, methodical and intuitive strategies influenced in many cases by special interests and way to often led around by peer pressure and herd mentality.
Nearly a one of them was able to predict and get out of the market to save themselves or their investors as the Dow dropped from its high of some 14,000 in the 4th quarter of ’07 to 7,000 in the 1st quarter of ’09; in many cases losing half of there market worth in this short period of time.
Most of them have somewhat tested portfolios strategies that may hold up for periods of time but are often blindsided when unexpected market corrections and bubble bursting events takes place. Few of them have a truly global perspective.
Martin, you’re Money and Markets updates; with its insightful, global and in-depth perspective adds quality information to my research, writing and world travel experiences and knowledge.
Along with its outstanding germane information it continues to be the most enjoyable and entertaining reading for me on world trends, demographics and investment strategies.
A number of concepts, bedrock historical perspectives and future projections that I have written about in my book: GOLDILOCK MISSION: Man’s Next Migration have been sharpened and honed by your excellent writing style, insightful knowledge and clear thinking presentation.
Thank you for you continued great work; the world would be a far less understandable, profitable and enjoyable place without it.
Dr. Spencer William Brown
As of now,I am 100% out of stocks and am buying real estate.
Thanks for your help.I enjoy all your updates.
David
I have never been an investor in Mutual Funds. I did get into the Reits, which were doing well in the 90s’However my investment broker did not advise me to to get out soon enough. Thus I lost $100,000.This was big as I needed it for retirement. Now I am working a Home Business, have Bank Stock and own four peices of property. But I am 70 and have to be careful so as to have enough money to last me. I am shy about most stock investments now.
I am close to retirement and new in those investment.
I read as much possible, money and markets and five others.Use common sense.
Question two : not enough experience to have and opinion.
With what happened to china last week and what may happen in six months
it is eanybodys guess.
Good for people who spend there time in the stock market and succeed
Most of the people don’t have the talent the time the money or interest.
I have the feeling nobody knows where we are going, is no stability anymore.
I think a mini crash is comming gold silver play like a yoyo keep cash in your safe.
M.B
I feel that mutual fund investors don’t go by feel, but by a very set logical process fixed in their mind (be it right or wrong). I think they look down the road further than the average investor….but one of their weak points is that they cannot enter or exit a trade quickly……they sneak in and out over several months…..or else they would possible drive the stock price up or down with the volumes they operate in.
1.I watch for your recommendations that are listed each month. I try to follow them when I feel that they are for me, but I don’t use many of the Speculation reco’s. I’m not comfortable with most of them.
2. I usually invest the percent of my portfolio that you recommend.
Dear Martin:
just now I read your message, I would like make investment ,but I think till now all
investment have unsure, I don t like the mutual funds investment, I m follows the shares of Teva and others ones as it. several months ago I followed all yours commentary about
the market. I would like investment in international bonds and local too.
I appreciate so much all yours cooperations in its matter,
warm regards
Guetty
Martin…
Being largely financially compromised and investment dyslexic I am sitting on a very
small nestegg that I am hoping I can outlive. Translation: Most of the investment offerings are foreign to me and with current income only from Social Security the risk is too great. I am just squeakin by. The best I have come up with is to find a reliable local credit union with the highest interest on a money market fund and pray. How
about some sane suggestions for the little people? Pray about it.
the money mangers and brokers are dealing with high risk decisions, so they need a sophisticated research approach. They collect, sort, and analyze massive amounts of data to insure the iformation is as accurate for the investment strategy set before them. Their fimiliarity with the market trends also aids them in making informed decisions. And I think the love for what they do also plays a critical role, if they don’t love what they do they will not be successful with the invesment decisions. I am brand new to personal investing and I want to develop theses characteristicss.
I think the pros each have their own methodology based on their personal knowledge, experiences systems they have established or adopted and areas of interest.
Martin…
Being largely financially compromised and investment dyslexic I am sitting on a very
small nestegg that I am hoping I can outlive. Translation: Most of the investment offerings are foreign to me and with current income only from Social Security the risk is too great. I am just squeakin by. The best I have come up with is to find a reliable local credit union with the highest interest on a money market fund (at least its liquid) and pray. How about some sane suggestions for the little people? Pray about it.
I think the pros each have their own methodology based on their personal knowledge, experiences, areas of interest and systems they have either established or adopted.
Question 1. I have a mixture of foreign and domestic stocks. I get numerous
newsletters and I try to pick companies that I think will move up in price.
I also collect coins which I have had for years. I have had a silver account with Merrill Lynch years ago but gave up on it. So I am not to fond of metals. Even my gold option was to early.
Question 2. No response
I think a lot of fund managers push funds that they get paid to. I don’t think they really know exactly which funds are better than others. In no way do they have a tested strategy, otherwise many of them would have been telling their clients to get out of the market in the fall of 2008. I believe they just go with the bigger name funds and try to make people think they are diversified.
1/21/10
I can not put every fund and all fund managers in the same box, some probably are like monkeys shooting arrows blindly but companies like vanguard are more methdically inclined and have their customers in mind. I have put my money in certain funds that lost me terrible amount of money, I have lost faith and now I only have
vanguard 500 fund and 2 other vanguards, they have been good to me. Don’t trust any
body I buy ETFS
Martha A. Mason
Question 1 & 2 I would think that mutual fund investors have a system they use to decide on what is going to be included in their portfolio. I am talking about the people who run the mutual fund not individuals. I have not had mutual funds for a long time
so I do not follow them any longer. But i think for the individual see how the fund has been doing over the years and just keep adding to your fund long term.
Based on what I have read, people who trade in mutual funds have experience
and are knowledgeable in the rules of these riskier funds. I don’t think most anyone will make any money in stocks ,ETF’s, Foreign currencies, bonds, silver ( I don’t know about gold) when the United States economy is as bad as it is now. I believe it is a good idea to buy US Savings Bonds because you can cash them in in as little as one year if you have to. I think if I was stock broker, I would try to retrain into another field.
Mary Bender
There are good and bad mutal fund managers. The good ones have experience in the field thay are investing in and do their due diligence. dynamic precious metals is run by an engineer who also has a cfa designation.
Used to say ‘good advise pays-not costs’ but can’t seem to find advisories in my price range and portfolio size anymore, I am lost and uncertain, older and discouraged. Need help!
Of IRA’s 25% Wells Real estate; 9% Money Mkt; 66% commodity ETF’s (gas,oil, copper,food, lumber)
Liquid assets 55% gold & silver.
Want to look at foreign currency ETF’s
to quote Yogi Berra……” it is always hard to make predictions…….especially about the future!”….:-)
I believe most professionals do have sound methodology for sourcing the basis of their opinions. I am significantly concerned however that a large % of these investment managers, disregard the evidence and react from excessive “ideological” beliefs about economics, and therefore are prone to actually missing complete sectors of very important investment opportunity, on the Global scale. This has been evident in particular, with the rising of the Asian economic juggernaut. Equally this narrow “blinkered” approach to investment criteria, has caused an undue “lemming” psyche, in the advice dynamic, particularly in the West and more especially in the U.S. Whole sectors of opportunity have been, and continue to be essentially overlooked! In Asia, Africa and South America etc. This is one of the reasons that I am a supporter of The “Martin Weiss groups” non political approach to reality in economics and investment. In my experience they have been seldom wrong in their assessments. The other “800lb gorilla” is the seemingly “head in the sand” approach to the price to earnings dynamic presently at play in the US market, the continued overheating banking sector and the unemployment realities! One can see the pending “Doubledip” and I believe this is being critically ignored by Wall street managers in their overall advisories.
Simple. They subscribe tdo your newsletter.
TO ANSWER YOUR BOTH QUESTIONS.I INVEST WITH THE RECOMENDITION OF MY FINANCIAL ADVISER,THANK YOU.
Will I don’t agree on what is everyone else is saying, you don’t feel it out, that’s not a natural process of elimination, nor is it worth trying to give context to say. “Will I’m going to go with my gut instinct,” that won’t suffice in any at all ways necessary to invest.
As I’ve told everyone around me, you start with an opening account depending on field, stocks and bonds, 2500 to 5000. Which will go upwards depending on how much you put in over time, or all at once. You can grow it in anyway possible, each check you get from work invest 5 to 10%, every time you get a check. Or you can go the rolette way, and just throw it all in at once, and hope for the best.
As for bullion and precious metals, 5000 to 10000 as a starting price, then buy more overtime, not all at once. This is more of saving’s investment then anything else, and should be played like bank cd’s or money markets, with banks. This one will grow overtime, since we have more currency per ounce, or per resource, then we actually have resources produced for.
As for energy and natural resources, this one’s tricky, it can work in either one of two ways, through royalties, and through commodities/futures. This one take both sully, cunning, and researched action, as one can know the trends of the season, one must know the trends of the weather, as if to invest in the com./fut., of farming produce. To know the planet can suffice you a way to see the future of a thing, and invest wisely and knowledgably in that field.
As for FX trading, I’d advise you stay away from this as it’s not possible in a year to learn the simple steps to take on it. For one, a person must not only know the following and above, but should have a basic or intermediate command of the Hadrin Enigma, or for the Fibinocci Sequence, mixed with a solemn understanding of all investment scheme trends. To do the math is one part, to not have feeling for and or responsive psychosis, is quite another. Each trade made can either play as loss and defeat, and you learned, could just as easily go out the window.
Another fact to remain in as the fx trade thingy, if you don’t take my warnings and just say, “oh how can he know, it’s not like he spent three years trying to understand the beast that is our money.”, go right ahead and invest, but be warned, the minimum requirement is 2500, but you’ll soon realize you need a minimum over a year of 20k or 40k to try and work this system.
Will to the final question, simple, I’ve spent years trying, and doing. To understand the mind of Wonderland, known only as, our world markets. It comes to the solemn, yet sinister realization, that to invest can only yield a future retirement, or a future case of schezophrenia, in which you believe the “man” is out to get your brains.
I would think they would review history and charts to see the performance of the company and what is in demand. I do not think they just guess.
Hi Martin,
You can get fifty different answers to those questions. Some like thinking outside the box. Then there are chartists. I think that Carter Worth is just about the best technical analyst on the street. Denny Gartman is no slouch either. You’re pretty sharp yourself. I’ve been trading daily for the past ten years and just when I think I have it figured out, someone will drop a clinker in the campfire. I easily put in ten hours a day working on the market, because I actually love it and I need the money. If they handed out awards for shopping, my wife would win hands down. These are not the days of buy and hold. You better be a stock picker and do your research. Over the past few months, I haven’t held a stock for more than a few hours. I go both long and short the market. I really don’t care who is having a good day or a bad day. I just strap in and have at it. At the end of each day I am in 100% cash. What a nice surprise these past few days with the market tanking. I know this isn’t the answer for which you’re looking, but this system seems to work for me. I’m a chartist plus an avid momentum player. History repeats itself, again and again and again, ad infinatum. I can never have too much information. I love to read a lot of the newsletters out there. I always find the input helpful. Keep up the good work. I’ll give you a tip. I think with the stronger dollar we may see gold bang right down through 1065 to lower levels. Then you buy GLD or if you’re feeling frisky, buy DGP for a real ride, stay in touch.
All the best,
Edward Vernon
As a small investor, I’ve primarily looked at financials as available through stock look-up, including dividend history and return percentage. I cannot say that this has been fool-proof for growth in value during the past few years, and I have not had enough to invest to diversify beyond these stocks. However, I have done things like start a small art business for growth with royalty potential.
I believe that fund managers and analysts alike use their own formulas for deciding on thier own individual paths by looking at current and past trends within the marketplace. so many look at what worked in the past, without looking outside of the box so to speak. Each economic trend differs in the way they started and how they will persist. I always try looking at what is upcoming and will work toward making life better for all people and not just one set. We have to look at supply and demand and general need to be profitable.
Hi Martin
I think that very few “professional stock pickers” are better than flipping a coin. I base this on that only 10-20% even beat the market indexes. Very few do this year after year. Fads come and go but few remain. Remember “dogs of the Dow”, Sector funds or the Motley Fool? Very few of the Wall Street crowd seem to think that the present crisis is alive and kicking. They do not seem to have knowledge of or read history books about countries that printed money without some foundation of real need for currency. We have a government that believes inflating the currency will restore business confidence. I feel gnorance and arrogance are determinig our financial futures.
Martin,
The US Commercial & Industrial Loans graph shows no sign of reaching a bottom,
when looking at the 52 week EMA graph so until it reaches a trough, I will continue using a very conservative investment approach.
Regards,
John.
I believe this is the calm before the storm. All my investments are in bullion,silver and gold stocks. Three years from now, or perhaps sooner, we will not recognize the economy, our country, or the economic disaster that controls our lives and dictates our future. I am amazed at the few friends and acquaintances that are taking these coming events seriously. I worry for all of them, this time, currently allowed us, is not being used appropriately in preparation. I know of no social democracy that has survived a currency collapse. The last chapter on Iceland has not been written.
The “Good Luck” closing of Martin is pause for serious thought for me.
They go with the pack.
I allocate 30 percent of portfolio to each of 3 different newsletters, but I think your service could help me watch market., as I will pull out if market tanks. VG.
For me, the only things I trust anymore are: Gold, silver, mining stock, precious metals, and oil. It’s harder for the crooks to cook the books on the tangibles. I’m all in, 100% in contra dollar investments until the feds. shut down the printing press.
I am very mistrustful at this point. 50% in physical gold and silver. 25% in CEF & GDXJ. the rest in. OII, BJS & HLX.
I am a goldbug and have long been 100 % invested in non-margined Gold and Silver, the metals, and partly in their producing miners.
I believe that all the Keynesian sins committed over the last 60 years will come to haunt us, and this time the planet, soon.
Then Gold and Silver will be the only saviours. I have been through this before, elsewhere, when people laughed when you wanted to pay with pieces of paper with numbers printed on them (such as Federal Reserve Notes).
I read advisory letters one of them is Larry Edelson– I listen to CNBC and i read Bloomberg for trends and attend a Money Show Meeting in Orlando. As I said before the money besides the money mangement plan (By Weiss CAP M.) is invested in Oil Gas (Canada pays good dividends) commodities gold platinum etc equally
40% of my total invested in domestic and foreign stocks, no more than ~ 3%each.
Never use gurus advice. ETFs drop just like any other stock when the bubble bust.
1.) M.F.Manegers,W.S.Brokers fallow a system. Invest in stocks, bonds, hold some cash
and use the pump and dump system.
2.) First group is guessing.
Second group has government inside information.
Laws are made to create bubbles and the comity on top knows when to pop them.
Just my opinion and observation of history.
I hope… the brokers are examining trends, both current and historical, reviewing the management and employees of each company in which they consider investing, as well as its’ competitors; as well the management and stability of the countries in which those companies operate; as well each countries’ currency’s trends and fluctuations. I started out with “I hope”. But I dumped ALL of my stock in 2006. I might have missed some good gains, but I knew that 2008-9 was coming. Trully,they are driving at high speed blindfolded… and our government certainly climbed into the Ferrari with them for the ride into the wall.
I do not have a precise allocation. I know when to get in, but fail to follow my same charting to get out resulting in a loss of guaranteed profits. Last Fri. my personal indicator told me to get out. I was too late, the market was closed. I don’t have confidence in my own system. Dumb, dumb, dumb.
Well! My experience in the third world guides and the veggie stand I worked for joe the huckster helps me balance what to buy and how long to hold! and some classical Ed thrown in gives me an extreme aversion to lose. Today ! farming and dairy cows , but if i was to make a bet? Rare Earth, used to be a Bands name now in I phones, pods and smart bunker buster bombs a hot commodity ,like uranium ,copper, gold , steel and oil but even in China’s long history they considered there music was once the rock of its time . Will history repeat itself? They seem to think so, all that stockpiling, its amazing the scale of it, cornering the market! Human nature and some ancient world histo , guess what’s next. My bet is that we should do what we won’t do and that is to stick to our own back yard and learn how to live with less . All this self preservation on the verge of selfisness and greed This could mean another war! Not much left after this one !
Hi Martin, thanks for your effort in trying to guide those of us who really need it. Well when I started investing I thought I was wise and followed the advice of the government and that was to put as much as possible into my 401K. Although it has done OK it has not performed as promised and now its locked up and I don’t really have any access or other way to invest it. So two years ago I started investing on my own and follow Sean, Larry’s and Tony advice and have done well.
i DO A LOT OF READING AND TEND TO USE FUNDAMENTALS TO DETERMINE THE TRENDS IN THE MARKETS AND THEN USE TECHNICAL ANALYSIS TO FINE TUNE THE INDIVIDUAL INVESTMENTS. SOMEONE SAID THERE IS ALWAYS A BULL MARKET SOMEWHERE. MOST OF MY INVESTMENTS ARE CONTRAR TO THE US DOLLAR.
AS FOR MUTUAL FUNDS; I WOULDNT GIVE THEM MY MONEY TO MANAGE AS THEY DO NOT SEEM TO CHANGE WITH THE TIMES AND ARE TO STUCK IN THE MUD; MOST HAVE NOT MADE MONEY FOR THERE CLIENTS IN THE LAST DECADE.
I believe that their is a lot of collusion among a small reserve group of individuals within certain firms to manipulate certain investments, and others abide by the rules by reading financial reports, board meeting minutes and asking questions…..by a gut feel……..b/c an element that connects the dots, dometsic and foriegn economics, are left out of the equation..WHO WOUlD of THUNKED….
I imagine that fund managers study company fundamentals and technical charts, but they also are privy to information that we ordinary punters don’t get. I have no idea how to play the market, other than to find stocks that pay a decent dividend.
I still do not have a clear vision on how to diversify my portfolio.
Presently, I allocated: 25% in cash; 27% in Preferred/High-yield Funds Fixed Income; 36% in Common Stock; 10% in Income Trust; and 12% in Index Funds.
In relatively short term I wish to acquire more knowledge and find out where my assets would be more protected from the coming inflation.
Those pros do a little better job of picking, rather than shooting darts from the hip like many of us. That is why we at NAIC Better-investing advocate investment clubs to follow fundamental analysys for building portfolios. I am also a life member of AAII which advocates TA for research. In our CCIC investment club both sceens must be passed to consider a buy. My only personal buy&holds are KO & Brk.b (I sold my BRk.A) I also trade optons. I have Schwab & a full service family broker to filter the newsletter leads.
I closely follow ETFs of the various catagories and then buy at a good buy point. My holding time is dependent upon duration of the trend.
I decide to allocate my investments based on Weiss advice and my gut feeling tempered by the cable business TV channels I have mostly shifted out of US stocks and into Brazil, China, India and Gold mining stocks and ETFs. I also have several funds holding mostly short term foreign bonds. When and if the political/economical outlook of the US changes, I will get back into the US Market. The percentage I invest in each of the categories is mostly based on a feeling or hunch.
I suppose that fund managers have a formulary for their allotments but I also suspect they use intuition and hunches as well. I don;t think that investing is a science as much as it is an art. It seems that there are many successful investing strategies as witness the many newsletters all claiming success.
Question one: I enjoy reading and researching via internet and investment letters. Presently, I am investigating macroeconomics: currencies, trade, central banks, commodities and emerging markets. I am only twenty percent invested and planning on buying about ten percent gold/sliver. I will be using ETFs for agriculture, metals, and some of the BRICC economies. Also, some cash is Vanguard Short Terms Bond Fund, I am waiting and selective buying companies with very good dividend histories.
Question two: I am retired. I have about sixty percent in dividend companies, limited partnerships, TIP and shorter term bond funds. Also, I have about thirty percent in commodity, foreign, and short(TBT) ETFs. Finally, about ten/fifteen percent in GLD and SLV.
through technical analysis and sector trends
Dr. Weiss:
Those are some very good questions! I do feel more organized than just ’shoting from the hip’ or using ‘instinct’, because I do have some very good organization behind my investment ’spread’. The mutual-fund group that my employer had in place was Valic and they have done a really good job, so far, with maintaining my investments and making them grow. I believe they have 3 categories of risk desired; low (conservative), medium, and high risk. Since I had only 10 years to get this done, before retirement, I felt I should go for the highest gain I could accumulate. They don’t use just one mutual-fund group for the investments, as I experienced with Amoco Oil, but rather a large list of fund-groups. I currently have 10 funds, with various %ages assigned; the risk is therefore not restricted to just one ‘make-it’ or break-it’ group. HOWEVER, a couple of years ago, I elected to utilize services of an analyst (Valic), who oversees the portfolio and makes adjustments. Only thing is, I have no input! It’s done well, but I’ve dreamed of using your investment suggestions more wisely, whenever I retire, which I did New Year’s. Maybe my analyst uses your info? Thanks for everything, you’re great!
I think money managers are using sectors that have potential to guide their selections and then they are fine tuning with leaders in each sector. With the large sums of money they have, they must be allocating to some extent.
Question 1: I subscribe to Elliott Wave Theorist and Financial Forecast (Robert Prechter), monthly news letters from Marc Faber and Larry Edelson. I also read a lot, e.g your flagship website and blogs, David Rosenberg, John mauldin, Financial Sense, MISH’S Global Economic Trend Analysis, Alex Jones Infowars, Sunshine Profits, etc. regularly. The abvoe give me excellent overview as well as detailed analysis of the investment markets. I make my own conclusions and informed decisions on where and how to invest.
Question2: By reading and anlysing as above. I am almost out of stocks as I sold everything. Currently invested in inverse ETF’s shorting S&P, silver, metals and industrials and also financial sector and real estate (20%). Gold and silver Bullion (10%). Bonds 5%. Cash position 65%. This is because, I belive depression is inevitable in the near future, i.e it may be for a brief period. But happen will it for certain before we get the inflation or hyperinflation due to massive bailouts and money printing. Consumers are not consuming as they are jobless and they can not use their houses as cash machines any more. Jobs are scarce as almost nothing is manufactures in the western world any more and many high profile service jobs are also being outsourced and this trend will continue. Hence just money printing will not help as the psychology will take a complete change. Money will be sitting in the banks or somewhere as the banksters and investors, individuals alike will be fearful to invest and hence hold cash for the coming several months at least. This is what is called the herd behaviour.
Additionally, the financial sector will be ailing as well will be controlled more and more by the government which will be deflationary as they will not be allowed to speculate as usual. They will become pariah after next few years. Government intervention will increase in almost every walk of life as deflation sets in. Municipalities and other local government agencies and provinces are getting broke and will be bankrupt. This is again highly deflationary.
Best regards,
Dilip
I am already heavily invested in all these areas. I have ridden them up and down.
I do not know what else to do.l
I lost to much last year so now I am low on funds to invest on anything.
I think money managers know what they are doing…to their benefit. If things get rough for them, I think they will act to protect themselves first. If I am talking to such person, face to face, I believe I will get the best information, otherwise it’s my problem.
I can’t wait
Ifeel Wall street have reliable sources when makink decisions
I believe because they all go with what they see across the board sort to speak, and go with calculated gut feelings on the investors best interest. I believe everything we do and undertake in life is a gamble and investment, therefore most of us go with our intuition sort to speak and or also known as our deepest gut feeling. I’ll invest into that thought, cause its scarry. And like life an investment is as such, unpredictabble, but oh what a challenge and a thrill. I could be wrong but that is my gut feeling.
I exited leveraged housing investment in 2004 and sold our personal home in 2007 at height of market choosing to rent despite much derision by septics. I chose to start buying precious metals primarily silver for back in 2005 for maximum reward due to its extreme ratio inequality with gold and of course fixed term deposit bank interest and junior mining stocks of late primarily being the TSX using regular subscription newsletters and personal observation and study. This has seen this portfolio rise by 200% . I do have substantial weighting in gold bullion as well and my reading of this site plus many other accurate commentators warning of events impending give a good overview to both deflationary and inflationary events even as they seem to be occurring synchronously at the same time ensure at least I am not going backwards but forwards.
I am a beginner, just trying to learn the right way to initiate my investment strategy.. i have little money to even start.. trying to pay my debts so I can begin. I have been reading Money & Markets, bought Martin’s book “How to survive and prosper in coming depression” I am sometimes overwhelmed but have learn a whole lot by reading the Weiss group information.. I sometimes feel by the time I’m debt free I will have missed many opportunities.. hope not. I know I will target the foreign markets like China and other emerging markets and investments the heaviest.. I want to invest in Gold and other Natural Resources next. I know little of bonds.. all in all I am trying to learn and rely on the expertise of Weiss Group. Thanks for all your enlightment I find it exciting and challenging. Bud- Sacramento, CA
Am pretty new to “investing” but am learning…..
For where and what to invest in?
1. Would consider stocks in domestic companies that are “globalized” that provide essential services/products.
2. Precious metals and co.’s that mine them
3. ETF’s in co.’s that advance technology and infrastructure in emerging economies (China, India..)
4. Foriegn currencies…not sure
5. Bonds..not sure
Would decide by personal priorities…liquidity, protect, growth/risk? what percentage? How to “weight” things in which assest classes? Not sure..but will research and figure some things out.
First of all a very big thank u for ur recommendations of AENY and JYHW… Ive already got a 250% return in a months time.In the current year Id invest 50% of my capital in real estate in India,
25% in gold and silver stocks and 25% in Natural gas stocks. looking forward to ur comments……thanks manju
I agree that my decision to invest comes from a combination of my head and gut. I have been reading your website for quite some time. It has of course influenced my ‘head’, but you can’t do anything with my ‘gut’. My portfolio consists of mainly shares. Remember I am living thousands of miles away from you in Singapore. So the shares are from Singapore and Hong Kong. The so called Hong Kong shares originate (some of them) in China. I had some unit trusts, but most of them were sold right after this financial crisis. I am on the lookout for ETF, but in this region, they are immature and lacking in transparency, so I have nothing at the moment. I reestablished my position in paper gold. However, before I went far enough, the prices began to skyrocket. The memory of me stuck in it some years ago is still fresh, so I am only up to 3% of my total investment. Regards, Anthony
They hire the brightest and best that money can by to create teams of researchers and porgnostigators. I still believe they have much inside info and manipulate the markets to their wants. I don’t trust any of them because they have no conscience. I have nothing left to invest any way. Mr. Weiss- you and your team are the only people I trust when it comes to “The Market”. Even tho I am not investing I learn something every time I read your information. It helps me understand what’s going on in the world. You are “Right ON” regarding the issues and I “Thank You” for your honesty, great heart and sincerity.
This message is for me.
Being sensitive is not a bad thing, the absolute reverse in fact, it is being Elite with all of my senses, making me the most beautiful, caring, mighty, smart and Unbelievably Noble in completing my wedding vow and many other new things.. getting healthy.. Tv+ commercials steals Everyones Creativity, you have all been Horribly Disrespected for a very long time. So weird eh!? lol
i evaluate the managerial competence of the company i want to invest in and viability of its product over a period of like ten years(how long will the product be in deman). this my basis of deciding how much to invest in the company… an education from my father. i also have interest in real estate and land developing…
MF with stated investment objvectives, I assume are trading to fullfill their mandate. Other’s with broader mandates I assume have strategy to maximize their return which are reviewed on a periodic basis to adjust for current market conditions and changes in the investment enviroment. The private investment pool which trade for themselves, however, are at the cutting edge of the investment arena, using dark pool, high speed trading and many other techniques unavailable to most other investors, to game the system for gains.
I’m in the learning process and counting on your advice.
Do fund managers know what they are doing? Yes but they are hampered by too large an asset base and also they have problems isolating themselves from the market in general hence most funds either underperform or shadow the indices.
I have 20% trading, 20% private or deal related. 40% in resource/ commoditys and 20% in non-finance dividend bearing mid and large caps.
I choose to invest most of my assets in bullion as I don’t trust the markets anywhere with the massive debt that is out there. Martin has drilled it into us to many times that this mess isn’t over and to play it safe, so that is just what I have done. Some of my friends call me a fool for doing so but alot of them are still loosing thousands of dollars with the markets in such flux. I have one friend who pulled out of everything and bought a large piece of property to garden himself in case the dollar really does belly up. Yes I am running scared but am still listening to the sound advice from Martin and his team as they have,in my opinion, nothing to gain by fibbing to me.
Thank you Martin as you have saved me a lot of hurt.
I used to work for one of the large brokerages. I saw a parade of representatives from the large mutual fund companies. It was apparent there was a large overlap in holdings from one company to another. Many people do not realize they were actually holding the same stocks albeit in different funds. I was not impressed there was much “out of the box” thinking. If the fund was portrayed as a large cap, you can be sure it would hold MSFT, GE, PFE, etc. Clients often thought they were diversified by holding different fund companies, when in fact the “cookbook” approach left them more exposed to risk than they thought.
I am subscribed to couple of your news letters and also follow research (micro and macroeconomic) published by two of the big banks. I try to detect common patterns (sectors, individual stocks recommended) across the material I read and try to decide where to invest. In terms of how much to invest, I just go with my “feelings”. However, one of the challenges I have is that I come across conflicting information at times and that kind of takes me back to square one. The fundamental question I ask myself is, “which of these publications can I trust the most?”.
Dear martin, I don’t have any certain way I invest other than I diversify. I watch the mutual funds to see where they seem to be doing well. I have no idea of how they choose what stocks to invest in . Wish I did. Best Regards,
I rely on Fidelity’s portfolio management tools as well as comments re market direction, Since I have a lot of mutual funds as well as ETFs the Fidelity tool for analyzing allocation in terms of category and national/international exposure is particularly helpfuul.
Must mutual fund managers provide to poor proformance.There methods copy cats
-my guess / my ‘bet’ – is that they (for the most part) are fairly ‘identified’ with self-importance , follow the crowd ( generic computer models , gossip , ‘net-working’ and the like ), spot-light the ‘wins’ and shadow ‘elsewhere’.
it seems to me that a real ’solid’ hired-manager would neccessarily have a ‘big’ view of the world including our climates of weather,wars,politics,astro-physics,various media & religious ‘trends’ & manipulations and then apply good-sound reasoning by combining ‘head’ & ‘gut’ intellegence while having ‘investment-respect’ for the Planet ! – Richard
well what I see is the risk factor for different stocks or funds and the past 5 year performance average return on investment then they are usually split according to age the older the person usually the less risk factor they want to take and the higher the risk usually mean the chance of a greater return.So when selecting the stocks or funds keep in mind you will want a range 33 to 50 percent in a conservative then 25 to 33 percent in a moderate and the same as moderate in a higher risk category using there past performance as a guild line. question how can i get stock in the 3-d movies industry If you know please send me the info thank you. hope I answered the questions.
Martin, Thx for the Q/A format. I learned a lot from readers comments. I was in the $ mgt bus for 39 yrs,so I have always been sensitive to asset diversification. I own core stocks[abt 8] ,farm and ranch R/E, pure bred cattle,irrigation water rights,metals[not enough] and a trading acct where I trade options. The mutual fund question of mgt style is ainterestin. I believe good managers are severely hampered by the significant volocity of $ moving around-often in the wrong direction @ the wrong time. I use numerous research resources with diametricaly opposing opinions on many things[the usd, outlook for inflation/deflation]. This coupled with the activities going on in Wash keep me on the edge of my chair daily! Appreciate your efforts. Albert
Unfortunately I think most brokers and investment pros make recommendations from a
list of stocks that are a plain vanilla flavor provided by their inhouse advisors, This list does not reflect the individual needs or opportunities in several markets. I also think their list is skewed to maximizing profit to the broker firm and not the investor client.
Dr. Weiss,
and other comment posters:
What a wonderful “gut issue” question, and follow-up!
My strong feeling is that the 2008-2009 financial crisis marked what
Andy Grove (author of Only the Paranoid Survive) would call a “strategic
inflection point”: I think that a lot of the ‘conventional wisdom’
with regard to modern portfolio theory (especially risk deterioration or
reduction through diversification) has to be fundamentally re-thought.
Furthermore, I don’t think ANYONE, as yet–whether they are informed
individual investors (and I’m very impressed with the obvious astuteness
of my fellow comment posters!), or “Wall Street professionals” have even
the beginnings of a handle on this. I think we’re now in “uncharted waters”,
and it may well take 1 to 3 years for us to get our ’sea legs’ again.
Best regards to all of you, Jonathan A. Wells (e-mail prnceryl945@gmail.com)
Dear Martin
I really only have a 401k with vanguard for my retirement, with about $100,000 in it. I took a beating when the stock market fell about a year ago. But while it was on the up swing I also followed the crowd and bought into some of these on line market gurus like “motly fool” and acouple of others. I have afair amount of stock in the fertilizer company Mosaic who I work for. I made note you were the only market analyst saying we were heading for a crash. This registered win my mind afterwards and I started paying attention to what you were suggesting.Basiclly fertilizer is acomodity so I figured I needed to hang on to the Mosaic stock in my 401k.Vanguard doesn’t give you alot options so I am very devisified in thier plan with 70 %in ferilizer stock 10% bonds 10% in straight intrest 10% spread out in funds availible(vanguard)My personal rate of return is currently 49.7% 1 year return and 9.2 % for 3 years.I know this is not the best setup but I’m extremely limited in this plan, however I am looking at either pulling all of it out or 1/2 of it out and reinvest outside of the 401k. But back to the foreign investments I do have funds in foreign funds but only a small percent they are mostly in european companies. On question two I read alot looked at company performance read what your group said and weighted how much risk I was willing to handle.I have already worked on some rough drafts of what I would like to have if I pull my retirement money out of the Vanguard 401k. Sincerely David W. Turner
Martin – My wife is fully retired and I’m just semi. We’ve planned our future with no debt. I sold my business in 2007 and I run another now. I still enjoy working, but not on a regular schedule. Most of our 401 is in a conservative mutual account. I opened an IRA last year so I could deduct something. I look at the IRA as my trip to Vegas. If I loose the money, I still won’t miss a meal. I’m actually doing better than my broker at Merrill Lynch. I read about three to four hours a day and try to digest all the defferent investment suggestions. I think most brokers only read what the Journal says and what their bosses tell them to read (and recommend). I’ve already told my broker that we need to talk.
I think professionals probably use as many analytical tools as are available and then use experience and the consensus of their staff and colleagues to feel their way through the maze and play the percentages, just as I do. Even then, I limit my total investment activity in this shamefully manipulated market, and I trust very few investment advisors other than Weiss and Everbank. In particular I don’t trust anything in the newspapers, magazines, or “You could make a million dollars…” scams on the internet. I trust Obama’s intentions, but not what he is doing in practice. They should have listened to the Weiss recommendations from the beginning and Obama should have swept out all the Bush administration holdovers. At the same time, I have no confidence whatsoever in the concept of unregulated capitalism, and I certainly support the idea of taxing the big banks for the CEO bonuses. I am outraged by the obscene salaries and bonuses on Wall Street. Only limited greed is good, and investors are not motivated by just greed and fear. In fact, most investors think of investments as an enhanced means to save money for the reasonable prosperity of their family and such things as retirement and keeping up with inflation. Interestingly enough, investors also want to promote the interests of their nation’s business interprises.
H Martin: If I own a stock, it needs to be traded on the NYSE etc. I watch the stock every day I am invested. If you gave me one of your picks I would have to research it personally before investing. Not the I don’t trust you or other advisors, I just have to have know the company before I put my money down. I agree with you, natural resources looks good.
Martin your questions are good and answers also very good. BUT. I find all your comments and advice directed toward Americans who have American dollars. Sure you advocate buying some foreign stocks in China and others, but where do we get these….. on the NYSE.
I am a Canadian with Canadian dollars. If I want to buy the foreign companies, I have to convert my Can $ to US$ they buy. If the US $ is headed down like you and Larry indicate, why would I move my Can$ to US$
In short you do not provide any advice for Canadians and how they should manage their Canadian dollars. As you probably know the TSX is very limited in foreign stocks.
Please include in your article what Canadians can or should be doing with their Canadian dollars
Thank You
Phil Coatta
Edmonton, Alberta
pcoatta@wildroseinternet.ca
I am 70 –have enough money —so interested in keeping it—buying Ishares and ETfs-looking for the best dividends—have about 1/3 in bond related –20% in gold—about 30% in income trusts—and some finacial stocks
spend a lot of time baby sitting this–but enjoy it
have noproblem dumping on gut feeling —even if up or down
As to your question – “how do I think mutual fund money managers, Wall Street brokers and pros make these all important (investment) decisions?”
I only just started receiving Money & Markets a few days ago on recommendation. Unfortunately, when it comes to money and investments I am fairly clueless. So I opted to go with mutual funds with a somewhat conservative company – Edward Jones. I have very little to invest, $100 each month. And it hurt more then I can say to see the monthly losses exceed the monthly gains. However, things are gradually turning around. With that said:
I believe that my Edward Jones money manager makes his financial decisions and recommendations to me based on ‘tested, reliable methods’. If he is ‘just guessing or shooting blind’, he is still likely doing a better job than I would. As to the Wall Street brokers/pros – oh boy.
I’m just cynical enough to say they knew exactly the risks they were taking with OPM and were greedy enough to not care. There would always be more money where that came from. And if one or two companies (individual Americans were irrelevent) suffered catestrophically – such is life, that’s business!
Clare
I believe the majority of Wall Street Pros make mutual fund decisions on the buying, selling and frequency of trading based upon the incentives contained in their goals, objectives (which they submit) and how they can profit best via salary and bonus regardless of the benefit to the individual investor., . They appear to personally have little downside to taking risk. In some cases they push stocks via favorable recommendations then dump them after they have begun to peak. They then buy them back at lower prices and start the cycle over again. With the continuing greed on Wall Street it dangerous to buy mutual funds not only because of the unethical values of some but also because of the excessive fees.
On the other side of the coin, there are intelligent, honest, trust worthy professionals (in my opinion in the minority)that have reasonably reliable ways to structure portfolios that reduce risk, which sometimes reduces upside potential with an optimistic view of maximizing profit.
There is obviously an institutional bias regarding large Caps since they are controlled by institutional investors. Many mutual funds invest in the large caps and they reflect this bias. Index funds have the same bias. So from my view the individual investor is better served via individual stocks, bonds and factors such as the consideration of tax consequences, etc. I believe the majority of mutual funds leave a lot to be desired and should be avoided.
MARTIN ,I THINK THEY USE THERE COUMPUITERS,WITH ALL THE TECHINICAL CHARTS,GRAFF’S AN ANALISS REPORTS TO DECIDE WHAT STOCKS TO COLABORATE ON , AT THE COUNTRY CLUB OR THE BOOBY BAR! [deffitenly not work!] AND AFTER THEY DO,THEY RUN SOME OR SEVERAL STOCKS {THAT HAVE NO POTICULAR REASON TO SOAR} TO THE ROOF DROOPING THE FLOOR OUT OF OTHERS [THEY SHORT THEM] AND THEN WHEN ALL THE DUMB-*** REGULAR TRADERS THAT LISSEN TO THERE {{ ? EXPERTS?? }} OR THERE TALKING -T-V HEADS ,OR ALOT OF OTHERS ,THAT HELP THEM RUN UP EVEN SOMTHING AS AMERICAN AN LEGIMAT AS {{{ U.S.STEEL}}} {$166.00 to $26.00} in 30 day’s or less .THEY SAY THE BOOK VALUE HAS DROPED ?? AND THE TALKING HEADS SAY EVERY DAY WE NEED TO GET TO GET ALL THAT MONEY OF THE SIDE LINE ?? BUT THERE IS NO QUESTION WHERE THEY WONT TO PUT THAT MONEY?? JUST!! ONE STEP A-HEAD OF THERE BEHINE” “PLEASE!! “”SWEET “JESUS!! {{JOHN OUT}} GOD BLESS
Guess I am lazy. I have invested and reinvested in several conservative mutual funds which have done very well for me over the last 40+ years. I read your information and perhaps will invest in some of your future investment recomendations, at 77 years of age, on a very conserativfe basis.
Hey Martin –Happy New Year. For investment ideas, I pretty much read and listen to what the experts have to say first. And if many of them agree on a certain stock, I certainly take a closer look at it and do some researching on my own. I’m pretty much a buy and hold investor of quality compan ies. Sometimes I buy a few shares and see how that works out before I get “crazy”. I also try to read between the lines on info I get from my stock companies and if I smell a “reverse split” (most will not come out and say that’s what they mean–obfuscate just like the government) I get out but quick. I have saved a few calamities that way. Martin, I know if you use any of my stuff, you will not reveal my full name and e-mail address because you are one of the most moral and ethical individuals I’ve come across in a long time. God bless. Nan
artin, Take care. Nancy
Dear Martin,
I read most of your research and have been very impressed…..I have a small firm where your research is very timely…..I pass this on frequently by forwarding some of your current comments to business owners who are pondering the current state of affairs.. they then become more familiar with you and some, I am sure, have become subscribers ….Our firm provides 401k and DB plans for corporations…..much of your data ties in with what we are looking for in future market trends….Personal investing for me outside of my firm will be in about 24 months and at that time I will be utilizing more of your personal recommendation….
With Great Admiration,
Ron Mills ….Salt Lake City, ….
I would say it is a combination of 71 years of living and ‘paying attention’ to my “seniors” and following their successes which were more than a blind lucky guess. Everyone has a lucky investment now and then. Those do not count! I pay attention to those who consistently have a “reasonable” return on their investment. I consider reasonable as anything over the averages of gold/precious metals, mineral futures, and the investments people such as yourself bring forward which I am not familiar with. Those I study for a period and then act accordingly to my depth of understanding. I don’t invest in anything I don’t fully understand! (Mom, a great invest er, taught me the basics).
I would say it is a combination of 71 years of living and ‘paying attention’ to my “seniors” and following their successes which were more than a blind lucky guess. Everyone has a lucky investment now and then. Those do not count! I pay attention to those who consistently have a “reasonable” return on their investment. I consider reasonable as anything over the averages of gold/precious metals, mineral futures, and the investments people such as yourself bring forward which I am not familiar with. Those I study for a period and then act accordingly to my depth of understanding. I don’t invest in anything I don’t fully understand! (Mom, a great invester, taught me the basics).
I intended to add that : Better late than never! Been without the ‘Net’ for a bit. Winter weather.
Martin I fit in with the (sheer Instinct group) My knowledge of the markets are slight !!
I joined the”Million Dollar Contrarian Portfolio Group” to make these decisions for me.
My problem now is nearly all of the stocks have to be bought on the “US” markets.
I loose money on the exch.rate.($CND to $US) If or when ? the $us falls I will loose money when I sell. Plus the tax. Do you have any suggestions?? Is it worth my while ?
Sincerly Daniel McIntyre Toronto ont. Canada
Martin:
I am definitely not a sophisticated investor and am relying on the recos of you and your group. Where fund mgrs are concerned, I’m sure there are those who do their homework and strive for excellence down to those who “play it by ear”. As an amateur, finding the people I can trust has been my biggest task over the years. I feel comfortable with you folks and hope that time will prove us all right in the investments selected. Presently I have 20% invested with the rest resting securely. Most of the 20% is in gold and silver with some of the rest in emerging markets. I await your recommendation to increase the amount to invest in the future.
Dr Weiss I invested in Mutual Funds back in the early ninties and did very well untill just after 2000 and as you know every thing went to hell my investment almost went down the drain but I was lucky with the investment I pulled out more that I had put in and retained as much as my origional investment which began a decline. The past two years I’ve gain a little but it has not been that which happened in the ninties.
As for how the account managers handle investments it looks like it is a shot gun act they go out for lots of investments both foreign and domestic and hope for the best. Their quarterly statements show they draw lots of income but most of it goes to the managers and their staff a very small percentage gets to the investers
Hi Martin,
From what I read about Wall Street and their ways in your articles and others I understand that their way of investment is very simple: invest into what looks good and use some high level advise that my management provides me to keep an acceptable average. Otherwise, why should I bother if I use other people money? Why do I need to use complicated analisys? I am going to make my money anyway. Right?
So, My unswer to your question is : They are just guessing at best.
Thanks,
Igor.
I try to evaluate the recommendations of the person making the suggestions. It depend on how I feel about this person and his previous track record. Analizing what he has to suggest and if they make sense in what he submits. If I like and trust his judgements, I give it a shot. Success inspires confidence.
Financial planner thru the bank.
I invest under the following criteria:
PAY ATTENTION TO HISTORY and incorporate current events to predict events within parameters, (allowing for lag time I am finding as it takes a while for many to act).
1) Read the opinions of analysts with solid track records.
2) Stick to what I understand while learning as much as I can.
3) Research, research. Due diligence before buying or selling.
4) Follow market action when not buying or selling, even a couple of minutes helps.
5) Act on what I know and expect.
I am only invested in gold bullion, (bullionvault, my 1st investment, 2007), And gold and silver junior miners and explorers. I am only up about 30% per year. I would be doing much better had I stuck with acting on what I had believed I should be doing. Part of that would be taking sound advice that I agreed with and acting on it. I sold some of the stocks far too early and I knew better. On the other hand, 30% per year isn’t horrible either, especially for a newbie.
Fund managers usually = herd mentality = late trend investing. Not good in volatility.
Fund managers miss the profitable small caps due to large investment requirements.
Fund managers rarely think outside the box that their education and experience has put them in.
Fund managers usually ignore history.
Fund managers rarely have a small investor’s interests in mind.
Analysts, Brokers, and Mainstream media are at worst self interested and corrupt, and at best willfully ignorant.
This site is one of the exceptions, well done, and God Bless you all.
I do a lot of research as far as the industry/stocks/funds are concerned. I read your comments and go over your suggestions as well as others in the field. I’m very interested in China stocks and funds. Right now I own 50% energy equities, some gold and tech stocks. Mutual funds comprise about 40% of my portfolio. I feel I’m pretty diversified. My financial adviser alerts me of new items of interest which I may or may not act on.
Thank you for all the important information you send my way. I enjoy reading everything especially in this very volatile market.
Thank you Dr. Weiss. Well I think fund managers try to do their best, but the overall is we really are just guessing to some point. With that said there also is looking at past events and merging markets such as China, Twain, Brazil, Russia, and Africa. As I said Dr. Weiss this means that analyst have spent many hours reading and looking at markets and extensive education with licenses to certify the ability to give advice. Dr. Weiss I am very interested in Africa the king of energies and raw materials and China the king in a booming economy and over a billion people. Dr. Weiss all of the reports I read from you and your staff is very appreciated and respected and I thank you and your staff very very much.
I have been following the recommendations from your Smart Money Reports. I must confess that I still have not sold the GIS stocks yet.
Dear Martin, So much information, I really don’t know what to do. I listened to the forecast today and will call to see if if I can get the type of help I want. I want to thank you, because I believe you are there you help not just make money.
I believe most analysts have a herd mentality and they do not seem to be interested at all in the ethics of companies, the lack of which can cause a downfall. I try to avoid investing in companies that have a whiff of scandal – something very difficult to do…I don’t believe that any amount of research can guarantee success in the stock market because so much is hidden. I have turned quite pessimistic over the past year or two, which is the reason I have most of my money in CDs now. I read what pessimists like you say and am more likely to believe you when you see glimmers of hope. But, so far, I am not budging.
investing in money but i need to make u some
this year I plan on buying gold coins of which I have bought some and invest in bonds. Being a begginer in investing in bonds i want to start with the ones that promises a return or at least protect my principle. Stocks are too volatile to me and am afraid of them.
Dear Martin a very good day to you. I believe that for any worthwhile investment to be made the variables in the acrimony RRARIB are very essential. RRATIB simply stands for risk, returns, availability of funds, Tenor of investment, inflation and business environment which are critical business factors that will affect the investors decision.
Thank you,
Joseph Imoukhede Ahonsi
If you were to diversify on which investment should you put most of your eggs.
I am planning to reassign the percentage allotments on each investments I have on TSP FED
plan.
Thanks
I do not trust most stocks or instruments at this time. I have no one that I know that do excellent investments outside the US and I do not trust this government to not confiscate all profits made outside of this country. I have ownd gold and silver and numismatic since the middle 70’s . Although I own my home , I believe most of americans will lose their paid off homes to massive property taxes when the government have no payroll taxes or bank accounts to rip off. If we continue down this road Zimbabwe will be a paradice. I am now 65 andhave a gov pension and ss and my wife still works.
Dear Martin,
I have read with interest the works and studies of you and your assosiates over the period of the past two years. I decided from indication of opinion collectively that my interest were spread too far and wide. With the unstable nature of the economy I took your collective advise and started to bring home cash and consolidate in currency which
by your better judgement lends itself towards being stable with a lesser risk to loss and variations. This is taking a deal of time to exit and this like the investment at the time was well researched and indicted a good upside and minimal downside.
If I want to make gut decisions on investents I can always go to the race track. No thank you!
I am of the opinion that there are far too many recless decisions made in professional
firms in pursuit of the dollar resulting unspecified losses. As to the questions you raise in respect of Mutaul Funds and the like are influenced by the human psychy, how good is the input of knowledge and experience leave alone diligence and due care.
Martin,
For the most part, except for my pension, I’m, as they say in Texas hold em, ALL IN”
debt investing. I get 30% on my money. 1988 the same ROI plus Qalcomm in the stock buyout. Look at that stock the last 20. I am confident that my funds are in the right place. Martin, in 20 years the only risk I’ve found in debt investing is THE PAPER SUPPLY BEING SHUT OFF. THIS IS EXACTLY WHAT HAPPENED WITH THE FDIC FAILURE CIRCA 1988. This GARGANCHUAN opportunity, never for 20 years is upon us as never before and I’m all in. The FDIC is forcasting these events as well.
CJ
i have overseas investment, and cash w/pretty good interest, stocks mutuals and annuities.
I think all the investment gures are just shooting in a pond and see what they get, they don’tknow any more than we do. The market does it’s own thing and no one can predict what that is going to be now or later!
The government is our worst enemy and all their manipulation of OUR money.
I have not done very well so far. My portfolio went way down in 2001 and again fall of 2008. I know I need to get invested and am reading, reading, reading and haven’t been able to make a decision. I’m leaning toward commodities, energy, water, metals. I would like some good dividend stocks and growth, also foreign. I have about $10,000 in a Roth IRA and $10,000 in a custodial acct for my great grandaughter. I don’t like mutual funds and I just can’t make any more mistakes.
I think the mutual fund managers do a number of things: sector analysis, fundamental analysis, economic growh in US, or other countries, ratio analysis like pe, roe, cash, and cash flow analysis. some do technicals like averages and 50 day cross over. some use sentiment overbought/sold. some weigh in on contrary investing or out of favor sectors.
Martin;
I never spend time on bloggs but I owe you, so here are a few comments. I started 20 years ago trying to figure out what I did not know and who to listen too. I knew it would take a while and a lot of work, experiments, and loses to get the prize of experience. At this point, I have paired down to two people that I will listen too at least to a point. Those two people have a track record for being right most of the time. They are Martin Wiess and Robert Kiyosaki. You are both to be learned from and viewed on a big education picture. I am not going to be a robot and follow every direction of anyone. I already learned the hard way to never do that. I consider what I say here as high compliments for you. Your confirmation helped me dodge the stock crash in early 2000. You and he confirmed me to buy metals in early 2000’s and sell my non income real estate in 2006 and buy a small amount of rental real estate then. I have made a few misteps but Life is better for me in retirement or as I think of it Semi-retirement( I do not believe retirement will be there for anyone in the future and it is a bad concept). I was not able to get every desired move accomplished but enough to be top side instead of in the dumper. I have no bonds or stocks now although I studied them some but backed off. I have no ETF’s. I have learned that stocks must be watched often and buy and hold is mostly a dream for losers. Here is a question for you. You have been pro china but they have all our US worthless paper. We have seen TV programs on their abandond cities where manufacturing has crashed. Businesses that operate on the cheapest human capital in the world have moved on to exploit other poor people. As we stop buying they look more and more like us while holding our worthless paper. I say beware. What do you say? Number two, I would like for you to explore where the outflow of big world money is flowing away from the US. I believe Soros is leaving for Hong Kong. He has done all the damage here that he can! Where is the next free, capitalistic, country wihere opportunity will abound and Americans will emigrate too? Or are we going to need to renew this one? I read your book and Sean’s and I wonder what your crew learned in your travels abroad?
Thank You, Martin, Thank You!
R
Let me give you some straight questions to answer on your daily primary post.
1. Should we hold a cash stash (green stuff) in our sock? And How Much?A lot of dissapearing money is Electrons.
2. How dangerous are Credit Unions if the banks come crashing down?
3. Should we raise our gold and silver holdings by percentage?
$. If you can actually accumulate cash, why is the 30 day US treasury safe when government bonds go under?
In everything we do there’s always an element of risk. However as a professional fund manager I suppose they will always evaluate the risks by monitoring specific Economic data,Industry / corporate performance,demand & supply,return on investment etc:
A prudent fund manager however much aggressive one could be will not have all the eggs in one basket.
I am deciding by reading the papers to see how well the foriegn markets are doing, and weather or not the the US Bonds will remain secure if they keep on gaining dept. I also am reading the papers to see if any markets show a definite upward trend. I am trying to stay away from banks, atleast for a while; and I am looking for stocks beside hightech ones that I think hold a promising future.
In answer to your question, and I am sorry if it is late, but I do not always read my Email, as it has gotten out of hand lately, that is why I have given you a new one. But I try to decide by reading the papers to see how well the foreign markets are doing, or rather the foreign economy’s, and weather or not the US Bonds will remain secure if they keep on gaining dept. I am also reading the papers to see if any markets show a definite upward trend. I am also trying to stay away from banks, atleast for a while; and I am looking for stocks beside hightech ones that I think hold a promising future.
Dear Martin,
If fund managers/brokers decisions are based on some study, most would use it for their own gain. I believe the majority care very little about me.
Gaining knowledge in the area of finance requires a lot of time and study. I’d be a fool then if I thought I knew where to put my hard-earned $, and preservation of capital is vital.
I depended on a gut “feeling” before I invested in gold and uranium, and can only pray I know when it’s time to pull out.
Thanks for your interest and concern,
Joanie
P.S. FWIW: I believe you run a business where trust is as important to you as it is me. Oh, and Ron Paul for President.
I am pretty much a novice at investing right now most of my money is in a variety of what I thought were “safe” mutual funds. I have a managed account and have also been choosing some funds on my own after reading about them and checking them out on Morningstar. I read and like your Money and Markets information on a regular basis and am learning some broad concepts. To be honest, however, I am feeling incredibly overwhelmed by the number of emails I am currently receiving from some of your partners. I’m retired and in my mid seventies so what I have is what I have and my tolerance for risk is negligible.
Martin, I am not in market at all. Need to build portfolio from scratch. I need to be very cautious. How can you help.
I have wanted to post something like this on my site and this has given me an idea.
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