Do Your Investments Need Water to Grow?

Unknown-14Dear Mr. Market:

One of the most fundamental concepts of economics is Supply and Demand.  Demand refers to how much quantity of a product or service is wanted from buyers and supply tells how much is available. We can often apply the law of supply and demand to investments to find the next lucrative opportunity. In general if there is low supply but high demand the price will rise. Conversely, heavy supply with weaker demand should lower prices. What happens if you had a resource in abundant supply but it was also scarce?  Water actually fits this paradox of sorts.

Most people have heard at one point or another that water covers about 71% of the earth’s surface.  Even the human body’s composition is somewhere in the range of 60% to 70% water. Again, although water is abundant it’s also scarce. Over 97% of the earth’s water is seawater and of the remaining 3% that is fresh water, only 1% is available for human use. Saltwater can’t be used for drinking, crop irrigation, or for most industrial applications. Not only is there a global shortage of water but also the demand for it is estimated to double every 20 years!

Investors need to understand where the next great opportunity is before it happens. Hockey legend Wayne Gretzky said it best, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”  This can be applied to investing in oil over the last century as it has driven the headlines and proven to be investment worthy. While that may not change overnight there are other developments and trends to watch for and the price and supply of water is such an example. Continue reading

10 Ways to Save Money


(1) Write it down! – You’ve probably heard this before but the act of simply writing down a goal considerably increases the chances of you actually accomplishing it. One of our favorite quotes is: “A goal without a plan is just a wish” – Antoine de-Saint Exupery

One major thing to remember when writing down goals is to make them concrete and specific. “Saving money” is not good enough. “Saving $10,000 for an exotic family vacation” is better…

(2) Set up your “buckets”– Regardless of the stage of life you are in it’s smart to have different accounts (or buckets as we call them) assigned for specific goals and needs. Initially everyone needs to at least start with their “emergency bucket” where at least three months living expenses is tucked away. Get a few other goal buckets lined up as well. If you’re working you’re likely to have a retirement bucket (401k, 403b etc). If you’re self-employed or own a business set up a SEP IRA or a Simple IRA. (there are plenty of choices here but you get the idea) Do you have a “vacation bucket” or an “automobile bucket” ? Get them established and then start filling them up!

(3) Tackle dumb debt Credit cards are NOT dumb or evil; not paying them off in full each and every month is.  We won’t get preachy here and to state the obvious the past few years have truly tested many Americans who had to do their best to make ends meet. What we’re pointing out here is that it makes absolutely no sense to hold a balance on a card when you have cash or other “non-performing” assets elsewhere. For example: If you have $5,000 on a card that charges you anywhere from 13% to 22% and your friendly neighborhood bank is ‘generously’ giving you 0.01% to hold your money….there is a serious disconnect. Continue reading

Women Investors : Who Controls the Purse Strings?

Women Investing

Dear Mr. Market:

Did you remember Mother’s Day and get her something special?  As we celebrated Mother’s Day earlier this month we would not be surprised if Mr. Market didn’t do much for his mother or for women in general.  The financial services industry has been notorious for overlooking women investors however the ‘tides of change’ are quickly approaching and everyone needs to be aware of it.

Women have become a major power player and are making a huge impact in today’s financial world.  The statistics speak for themselves; here are some eye opening facts: Continue reading

Has Natural Gas Finally Hit Bottom?

Natural Gas picDear Mr. Market:

Your market shenanigans have tempted investors millions of times with the promise of new technologies, advancements, and innovation. One topic that got us thinking recently has been what you’ve done to investors in the natural gas space. Let us explain more…

If you think the stock market clobbered investors in 2008, you can take some solace in knowing that it could have been worse elsewhere. If you had invested in natural gas back in 2008 when it traded at about $13 per thousand cubic feet (Mcf), you either sold it in frustration or are an extremely patient investor. Five years later natural gas is trading at just over $4 per Mcf . Could we be near a bottom though? Continue reading

Fool’s Gold

images-2Dear Mr. Market:

It’s been a while since we saw you get so upset with the gold bugs. Today marked the worst two day slide to gold in 30 years. Your temper really punished gold holders with a 13% hit.

Do you remember August 23, 2011? What happened that day? Maybe if you were a Virginia resident you might remember since that was the day a 5.8 magnitude earthquake hit the area. For those wondering, that was the strongest earthquake in the United States east of the Rocky Mountains since 1897. Back to our question though…What’s so important about August 23, 2011?

Investors sometimes have short memories but nothing specific really happened on this day; it’s what was happening that summer that we want to bring back into focus. Since we recently wrote an article about “Sell in May and Go Away” let’s actually go back to that very point in time.  After a positive month of stock market returns in April of 2011, the S&P 500 dropped -1.35% in May, -1.83% in June, and another -2.15% in July. Continue reading