Monthly Archives: June 2018

Ray Higgins on The 3-Rules of Money

The Economy: The economy continues to expand, the deficit continues to grow and the Fed continues to tighten. Sooner or later the tightening will bite … if Fed Chairman Powell can hold the line and not initiate QE-4 at the slightest hint of economic distress. What … worry? Every investor knows the Bull is long in the tooth. The question on everyone’s mind is, “When do I sell and what do I do next?” The bi-polar investment community continues to parse goat entrails, tarot cards, cloud formations and sentiment at the bottom of wine bottles in the age old quest to divine the future of the economy and financial markets. Glass half-full or half empty … when’s the next leg up or when does it implode? Do you care … or is catching that flight to Kauai more important than risk-proofing your assets? The 3 rules of Money are simple to understand: a) 1+1 will always = 2; b) If it sounds too good to be it is; c) Save it or spend it. The time of buy and hold may be nearing an end after almost 10-years. Passive investing as well. Every market crash has produced an altered investment landscape. ETFs may be the wild-card here. Do you have your next move or are you gonna ride this rocket back down and into the ground? If you’re doing it right, you should be sleeping soundly because you have a high probability of achieving your goals. Can you handle the truth?

Food for Thought: How to transfer investment or retirement accounts: Recently we’ve fielded questions from investors who want to transfer their investment or retirement accounts to a new advisor. Retirees in a 401k, people changing jobs and investors who just want a change have the same question, “How do I move my account?” The answer is a simple and easy 3-step process:

Step 1: Open an account with your new advisor; 30-minutes.
Step 2: Email your most recent account statement to your new advisor; 30-seconds.
Step 3: Have your new advisor initiate the transfer process; 0.

The transfer process is seamless, automated and does not require you to have contact with the advisor you are leaving. Most accounts transfer through an automated process called the Automated Customer Account Transfer Service (ACATS). In most cases, the transfer is complete in three to six days. No muss no fuss; no tearful exit interviews; no broken hearts. No more cousin Billy, your advisor for decades, knowing too much about your personal affairs. Move on to the land of milk and honey. Just Do It!

Powell is the new Paul Volcker

The Economy: The U.S. economy appears to be powering ahead with unemployment at a 48-year low. There are more jobs available than there are job seekers to fill them. Average hours worked are up; construction spending is up; manufacturing is up; factory orders are up … the list goes on. Economic strength continues to give the Fed leeway to raise rates. Another 25 basis point (1/4%) hike in June is a given. The longer Powell is at the helm of the Fed, the more observers believe that he’s cut from different cloth than we saw with Greenspan, Bernanke or Yellen. Some observers liken Powell to former Fed Chair Paul Volcker. It was Volcker who trounced inflation in the early 1980’s with interest rates in excess of 20%. The economic pain of Volcker’s reign was enormous. But it ended an inflationary cycle that threatened to spiral out of control. It also laid the groundwork for the robust expansion of the 1980s and 90s. The stock market took off with Volcker and has never looked back. The rocket ride accelerated with Greenspan. … almost 40-years of stocks and real estate going up with only the occasional pause. No wonder my doctor friend blithely talks DOW 100,000 as if it’s already here. The trick for Powell will be to keep the good times rolling while simultaneously taking away the moonshine punchbowl of free money.

Food for Thought: The “China Card” is huge; whether you’re talking politics, military or socio-economic. Check out today’s “Video of The Week” below for a compelling take on why culture may limit China’s rise. Then look at how San Diego,riding the crest of a building boom, has about $3.5 billion in downtown projects underway. Papa Doug Manchester’s Pacific Gateway project represents $1.5 billion or 43% of this amount. The Gateway project is the redevelopment of the 12 acres near the Broadway Pier. That aside, housing units are driving much of the building boom as the urban lifestyle is attracting both working folks and retirees. Prices reflect the demand with higher prices the norm. Downtown is happening. While the Gaslamp draws tourists, San Diegans are flocking to Little Italy for its charm, restaurants and the weekly Saturday farmers market.