Archive - October 2013

1
Stocks in a Close Parallel to 1999 Bubble
2
How Adding to Your Earnings Can Increase Your Social Security Benefits
3
Who are the Bogleheads?
4
Employment Report Shows Improving Job Market
5
Full employment economy ready to surprise investors

Stocks in a Close Parallel to 1999 Bubble

The SP 500 made new highs 33 times this year, the most since the 1999 tech boom. Only two months after the end of 1999 the SP 500 market topped out in March, 2000, and on a GDP adjusted basis has never come close to reaching the old 2000 high. The stock market has gone up this year much faster than had been forecasted by bullish experts, which implies that its appreciation rate is going parabolic, thus leading to a crash. The conditions now closely parallel the Federal Reserve induced stock bubble of 1999. In 1998-2000 the Fed kept creating …

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How Adding to Your Earnings Can Increase Your Social Security Benefits

Given the way that Social Security benefits are calculated, it should come as no surprise that increasing your income over time will make a difference in your eventual Social Security retirement benefits.  But how much of a difference does it make when your income is increased?

Of course, this is going to depend upon what your current income is, and how many years you have left before you’ll begin receiving benefits.  Keep in mind how your benefits are calculated – see this article for information about Computing Your Social Security Monthly Benefit – it’s based on your average monthly income …

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Who are the Bogleheads?

Last week, I joined a group of 200 John Bogle groupies at the 12th Bogleheads Reunion outside of Philadelphia. Long travels from the West Coast, Canada, and the Netherlands did not stop my fellow fanatics. No matter where they hailed from, all shared an admiration for the legendary Vanguard founder.

At age 84, Bogle arrived a bit banged up in body but not in spirit. His arm was in a sling, and he told us he was nursing a broken bone that wasn’t healing well. When asked what happened, Bogle quipped, “Stupidity.” He went on to share that he’s writing …

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Employment Report Shows Improving Job Market

Today the monthly non-farm payroll report was issued, 18 days behind schedule. Only 148,000 new jobs were created, lowering the unemployment rate by 0.04%, which rounds up to lowering it from 7.3% to 7.2%. The consensus forecast was 180,000. The news media was gloomy about this and bond prices went up. However, I think the long term trends for employment are still bullish. Gavyn Davies wrote in the FT today where he cited the SF Federal Reserve study that I had cited last week. He mentioned that there is a definite trend of an improving labor market. He cited the …

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Full employment economy ready to surprise investors



Tomorrow the BLS releases the monthly “Employment Situation Report”. David Rosenberg of Gluskin, Sheff and Macroeconomic Advisors said if no fiscal tightening had occurred in 2013 then the unemployment rate would be 6.0% not 7.3%. Rosenberg said monthly new job creation next year may be 280,000 instead of the recent average of 180,000. My opinion is that at this level, after subtracting 100,000 to 125,000 a month for population increase, in a year the unemployment rate would improve from 7.3% to 5.8%. At that level workers would feel more prosperous and buy more things creating a virtuous cycle where the …

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