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| JANUARY 2007 NEWSLETTER A classic topic in financial periodicals as a new year begins is a collection of market pundits’ comments and predictions of what to expect over the next twelve months. You won’t find that here. I don’t make ‘market calls’ in the classic sense. I do however have an outlook and a plan to take advantage of what my research tells me is probable. I don’t know exactly, nor does Harry Dent, Ken Fisher or Dr. Craig Callahan, what will happen next month or next fall. I do know that good research and sticking to a good plan has been a successful way to manage many complex endeavors. Your financial and investment planning is a very complex endeavor. So, as I look forward I see that the third year in the presidential election cycle is historically a good one. I note that the economy has a lot of good things going for it. Ken Fisher of Fisher Investments does a tremendous amount of global and historical trend research. He enumerated these good things throughout 2006 and sees the trends continuing now. Dr. Craig Callahan of ICON Advisers does an amazing job of sifting the numbers to get an unemotional read on relative strength and value. That research exhibits a 14-17% undervaluation in the current stock markets. Harry Dent has adjusted his forecast so that there may be only a doubling in the Dow Jones Industrial Average. This may occur as early as the end of 2009. Therefore, I want you to attempt to take advantage of the good trends and protect yourself from what may come. The Baby Boom has finished buying their move-up homes and you saw what that did to the residential housing market. They (we, since I am squarely on top of this wave) did that at approximately age 44. When we stop spending and driving the economy with our consumption there may be the same effect. I believe it pays to err on the side of caution and be prepared if our friend, Harry Dent is right. The Japanese economy went so far south that their central bankers could not stimulate the economy with zero percent interest rates. If this sounds repetitive, it is. As they say, repetition is the mother of all skill. I am beginning to put the defensive measures in place. For example, I want you to consider bond ladders for income that you can count on each year. If appropriate, I want you to use the guarantees available in today’s modern variable annuities in an attempt to protect your ability to withdraw from your portfolio even if the market has turned south. I ask that you get very specific about your costs of living. This way I can test to see if you have enough income and if your principal withdrawal rate is sustainable. Do you know what your fixed and variable costs of living are? You may have three more good investment years, or thirty. You want to be able to sleep soundly and enjoy those years no matter what happens in the investment markets. I want that for you also. So, let’s make this year and the next a time to begin putting the defensive measures in place that I have been alluding to since 2000. There will certainly be additions to the investment tools I recommend. Let’s get the basics in place and be ready for adjustments as needed.  | |
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Defensive Portfolio Measures
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The Lagging Healthcare Sector
AUGUST
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Investing in India
MAY
Consistency
JUNE
The path Ahead
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Gradually Moving Back to Bonds
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Key Demographic Statistics
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Closed-End Funds
OCTOBER
Revising Dent's Expectations
NOVEMBER
Service Integrations
IRA ADVISOR NEWSLETTER 2006
Trow profiled in the April Newsletter
MATTHEWS ASIA NOW
NEWSLETTER 2006
The Demographics Issue
BNET BUSINESS NETWORK 2001
Ready to Retire