Just when the big financial institutions were pushing back on the dreaded Volcker rule, JP Morgan Chase blows up 1% of its capital. The company (Ticker: JPM) is expected to post $4 billion in earnings in its current fiscal quarter. Still, the timing of the trading snafu couldn’t have come at a worse time. See comments from the CFA Institute, who argue this will help prove the case for the Volcker Rule. My take? The regulators can’t stop stuff like this from happening if Jamie Dimon can’t. And I agree with Charlie Gasparino: Just how do you break up a JPM anyway? Read the rest of this entry »
The Facebook IPO Bringing Out the Bucket Shops
Our good friend and contributor Josh Brown, a financial advisor who runs theReformedBroker blog says the bucket shops are in full tilt trying to scam ignorant but rich people in Reg D vehicles, promising them that they will hold Facebook shares. BTW, Brown wrote our cover story, “Staying Out of Murder Holes,” a primer on which financial products to avoid. Read the rest of this entry »
Americans Paying More in Taxes than for Food, Clothing, and Shelter
Pay your fair share.
ICI Mutual Fund Flow Data Show Investors Selling at Wrong Time
Below is the mutual fund asset flows dating back to 2007 as complied by the Investment Company Institute. Basically, retail investors have been selling equity funds since then. It would be interesting to superimpose the S&P 500’s returns over this period. But how to get nervous clients back into equities? How do you talk them back in the market after this latest crisis? Do you jump in and out of the market? Read the rest of this entry »
Retail Investors Continue to Sell Stock Funds
The Investment Company Institute reports today that the selloff of domestic equity funds continues —- even as the market rallies. How are you handling your clients? Are they still rick averse? Read the rest of this entry »
Have Housing Prices Bottomed?
A real steal, this fixer-upper.
How Changes in 401(k) Plans Are Causing Young People to Load Up on Stocks
Stan Luxenberg, our long-time mutual funds contributing editor, sent me an interesting observation today about how new laws surrounding 401(k) plans are helping prop up the market.
Stan told me, “Plenty of young people have soured on stocks. After suffering the dotcom meltdown and the financial crisis, they have been favoring bonds. Some pundits worry that an entire generation may stay away from stocks. But the outlook is not all bleak. Sweeping changes in 401(k) plans are leading many people in their 20s to load up on stocks. According to a study by Vanguard, plan participants in their 20s are now allocating 85% of their assets into equities. That is up from 41% in 2003. Have the young people become bullish on stocks? Hardly. The big shift can be attributed to the rise of target-date funds and automatic enrollment plans. Many target date portfolios designed for young people keep 90% of assets in stocks. Young people are automatically defaulted to the target funds. The heavy use of stocks is good for the markets and should help the young people get better long-term returns.”
Get Financial Advice from the Bible
File this under either: “The Most Clever Marketing Strategy This Week” or “What an Idiot.” Received this bit of nonesense (well, a strong word, no insult intended, but religion and money? Really?) from a flak this morning in the form of a press release; at first I regarded it as a late April Fool’s joke. I mean who relies on financial advice from “research” conducted 2,000 years ago? (”Go long donkey breeders?”) Read the rest of this entry »
Morgan Stanley Posts Best Performance in a Year
Brad Hintz, a senior research analyst at Bernstein Research and former CFO of Lehman years ago, still ranks Morgan Stanley (Ticker: MS) an outperform. Here are some of his thoughts. But Hintz still revised downward his 2012 EPS. Note his opinion of the retail advisory unit, Morgan Stanley Smith Barney. Our own Kristen French noted in a recent story that MSSB lost advisors but the ones who stayed were more productive. Read the rest of this entry »
The Psychology of Retail Investors
Always seem to be naked when the investing tide rolls out.
