Who does Mr. Market vote for…Donald Trump or Hillary Clinton?

Dear Mr. Market:

160323171742-hillary-clinton-donald-trump-investors-780x439How dare we put you on the spot like this?!? What an awful question! How will you (the stock market) react if Trump wins or if Hillary wins? By the way…as an aside….a great client of ours recently asked why everyone refers to Trump by his last name and Hillary by her first name. Why is that?

Depending on which side you’re on, this question may initially seem like simple semantics but it’s not. Are you “presidential” if you roll with a campaign based on your first name? Do you “feel the Bern” or did you “Trust in Ted”? Whether you’re a proponent of Hillary for President or Hillary for prison…it’s still Hillary. Where are we at America?

At My Portfolio Guide, the one thing we typically don’t shy away from is having a clear opinion. There are some great firms out there that simply can’t give you one! You’ll hear what you want to hear. They fear losing your “vote” or ruffling feathers. Yes…we understand that balance too, but as much as our job is about deciphering news versus noise…it does become important to take a stance. Continue reading

MPG Core Tactical 60/40: December 2014 Performance Update

MW-BB798_sm6040_20130422180557_MDDear Mr. Market:

We’re already two weeks into the New Year and want to make sure we wrapped up any loose ends with how you finished up 2014.

We finished up last month’s edition of the MPG Core Tactical Portfolio series by saying that oil prices could continue dropping to even under $50 per barrel. We’re not in the business of peering into a crystal ball and prognosticating, however this “prediction” was mentioned simply due to all the noise surrounding oil and its dramatic plunge. A multitude of experts began making statements that oil prices “are very near if not already at a bottom”. Mind you, this was just last month when oil finally dipped under $65 per barrel. The problem with these “experts” predicting bottoms (or anything for that matter)…is that not a single one knew that oil was near a top back in June or that it would fall as fast as it has. As of this writing oil has dipped again and now sits just under $45 per barrel!

What does about a 60% haircut in oil prices mean to the stock market? Simply put, the bulls believe that it is a positive for economic growth and is basically like a huge tax cut for consumers and therefore acts much like fiscal stimulus. The bears will opine that falling oil prices mean that the risks of global deflation are real and that the “kick the can down the road” mentality of a market that has been propped up for over five years is about to come to an ugly end. Continue reading

Understand the Herd…don’t follow it!

Investor StampedeDear Mr. Market:

It is human nature to want to fit in or be part of the crowd. We all like to feel that we belong to a group and are not isolated. Take a moment and go back to your youth…everyone can remember a situation when someone asked us if we did something, “just because everyone else was doing it?” Another favorite that is asked of children and teens is, “would you jump off a cliff if everyone else was doing it?” Investors don’t often ask themselves these questions but as the markets have now crossed into negative territory and volatility is present they certainly should be before rushing into any decisions.

Behavioral Finance is a fascinating field and the better you understand it the better off you are as an investor. A central theme in behavioral finance is the “herd mentality”. Investopedia.com defines Herd Mentality as: “A mentality characterized by a lack of individual decision-making or thoughtfulness, causing people to think and act in the same way as the majority of those around them. In finance, a herd instinct would relate to instances in which individuals gravitate to the same or similar investments, based almost solely on the fact that many others are investing in those same stocks. The fear of regret of missing out on a good investment is often a driving force behind herd instinct.” Every individual has made a decision to fit in or be part of a group but should that include financial and investment decisions? We would answer that question with an absolute NO!  Continue reading

Are you allowing the “tax tail” to wag the “investment dog”?

Dear Mr. Market:Tax tail dog 1

Not only do you toy with the emotions of every investor; you also have a partner that often surprises them and hits investors where it hurts the most… their pocketbook. Making money in the stock market is great but so many forget that eventually they have to reconcile with Uncle Sam come tax time. Look for example at some investments that we have recently discussed: Under Armour (UA) and InvenSense (INVN).   If you had purchased these stocks on the first trading day of this year (1/2/2014) you would be up 58% with Under Armour and up 20% with InvenSense. These numbers are impressive and would certainly make any investor happy but what happens when they are sold? How will they impact your tax return and how much of the gain will you have to pay?

Nothing is certain except death and taxes.

                            Benjamin Franklin 

*** Before we move any further in this discussion it is important to note that we are not tax advisors. In this article we will be discussing general guidelines. Every investor’s situation is unique and deserves personal attention. If you have questions we would encourage you to talk with a qualified tax professional.

Let’s take a moment to go over some of the basics when it comes to investor tax issues. Continue reading

InvenSense (INVN) : Motley Fool’s Secret Wearable Technology Stock!?

 

INVN #2Dear Mr. Market:

Technology is a bit like true love. You have to believe in it but it can also bite you in the ass.
Read through this article and you’ll see how this relates to a particular investment!

The technology Industry can be a challenging sector for investors. Perhaps the best way to describe it is with a popular saying … “the one constant is change itself.” Plenty of analysts and investment firms scour through stock ticker symbols looking for the next Apple (AAPL), Amazon (AMZN) or Google (GOOG).

We couldn’t help but notice the Motley Fool’s recent …shall we say, “stock pitch” about a company that could be your next homerun! If you’re a die-hard Apple fan, wouldn’t you like to know who their next HUGE inside supplier is? Rewind the clock and take for example the desktop computer or the cell phone you have within inches of your hand right now…

Put Apple, Sony or IBM on the shelf for a minute and think about investing in the next company that has a stake in every sale regardless of the brand you choose? In other words, buy the “chip” or technology that’s inside of each device instead of trying to figure out which phone or computer manufacturer is going to win the battle. Continue reading

The New “MyRA” … A Direct Route To Retirement Or A Bad Detour?

Dear Mr. Market:

MyRA#7

If you ask the average hard working American what their top financial concerns is, it’s that that they won’t be able to retire.  We could certainly go on and on about different solutions and how people can get on track to make their dreams a reality but today we will focus on a new program offered from the government.  On January 29th President Obama delivered his State of the Union address.  One of the takeaways from this speech was a new retirement account called MyRA (short for My Retirement Account).

Currently over half of the U.S. workforce is not covered by a retirement plan through their employer.  MyRA is targeted at low to middle-income workers, encouraging them to save for their own retirement.  Contributions will be funded through automatic payroll deductions where individuals can start with as little as $25 and contribute amounts as small as $5.  Individuals would be guaranteed that their account would never go down and they will not pay any fees on the accounts.  Sounds like a great product doesn’t it?!  Well let’s take a step back and dig a bit deeper to really explore what the MyRA is all about….

The MyRA can essentially be viewed as a way to introduce individuals that have not saved or funded a retirement account to the many long-term benefits of doing so. At this point companies are not required to be involved in the program, if President Obama wants to force employers to participate a vote from Congress would be required.  The accounts would be funded with after tax dollars much like a Roth IRA.  While it will be funded with payroll deductions individuals will be able to keep their accounts when they change jobs.  MyRA is subject to Roth IRA income and contributions limits.  Individuals can invest up to $5.500 per year (or $6,500 for investors 50 or older); once the owner reaches the age of 59 ½ they can make withdrawals tax-free.  There are also no required minimum distributions (R.M.D.’s). Continue reading

Should You Buy Target (TGT) Stock?

Target InvestigationDear Mr. Market:

With the holiday season now in the rear view mirror U.S. consumers are being reminded of the world we live in.  In the middle of the holiday shopping season Target made an announcement that had an impact on millions of individuals.  On December 19th Target announced that 40 million credit and debit cards had been jeopardized by a cyber attack.  Since then the number of cards has grown to 70 million, it has been reported that the number could grow to as many as 110 million!  Just last week Neiman Marcus released news that it is dealing with a similar situation and other retailers are likely to be in the same boat in the coming weeks.

On Friday (January 10th) Target announced that the security issue had a negative impact on their holiday shopping results.  Stores saw sales decline up to 5% (depending on location) when compared to the previous years results.  When 4th quarter earnings are announced on February 26, 2014, the additional expenses the company has incurred due to the hacking incident will certainly have an impact.  CEO Greg Steinhafel announced that 4th quarter EPS (earnings per share) were lowered to $1.20 – $1.30 from the previous guidance of $1.50 – $1.60.  Continue reading