Skip to main content

Summer of Death

By Rick Walter

It was the summer of death for many. I say that literally because that is how it seemed. Every other day a really well known person was keeling over, not to mention the scores of regular folks leaving us on a regular basis. Gives me the shivers just thinking about it. I hope the death-letting has subsided for awhile. Well, I am not the only one talking or thinking about death.

Did anyone read that article in the New York Times this week, "Wall Street Pursues Profit in Bundles of Life Insurance". The article briefly implies that some on Wall Street are looking for the next cash cow and are preying on old and sick people by securitizing life insurance policies that focuses in on elderly and really sick people cashing in their life policies for whatever reason- Life Settlements. "The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money."
Of course, the article is a real gross exaggeration of the business and just sensationalizes the topic. I know, who knew death could be so profitable. Ewwww-w-w!

On to the markets- the modest pull-back that I was projecting and looking for last and this week, barely materialized. The Dow fell less than 200 points- less than 2%, and the broader markets, declined less so, percentage wise. Nowadays, it has been a steady drip-drop on the positive side with 30 points here, 50 points there and so forth. So, what are you supposed to be doing now? Buy, sell or hold?

I recommend that you add to positions that have performed well this year. You may still want to be in a defensive position, not to be confused with 'defense stocks' - by adding a defensive stock or two to your portfolio, until the economy gets firmer traction. There is the iShares S&P US Preferred Index Fund (NYSE: PFF). This ETF fund is yielding 8.83% and its YTD market return is 15.68%. It's one of the ETF funds that I regularly follow and its fits the bill as a very good defensive play.

Get investment advice tailored to your retirement needs from a trusted source. Make a commitment to your future today by opening an Individual Retirement Account. An IRA should be the center of your retirement plan and its easy. Open a $1000 or $5000 Investment IRA or Roth IRA, earning 4.125 %. Rates are subject to change.

Comments

Popular posts from this blog

Morning Update

By Rick Walter Still working on putting together a strong biotech portfolio. Here is a good general article on the state of the biotech industry that was posted yesterday on the online Wall Street Journal's site- Biotech Stocks Hot Right Now, Ho-Hum in the Long Run.

Portfolio Update

By Rick Walter I have posted a new Biotechnology portfolio . It's total return as of November 25, 2009 is 3.4%. However, to download and use it you will have to subscribe to the portfolio, of course. On an important note, I consider each portfolio to be well diversified in its particular sector but I've recently decided to add stock futures and options positions to each portfolio which will increase each portfolio's return but lower the risks going forward.

Whose lending?

Troubled times ahead for everyone it seems. Credit markets still seems to be troubled. The Federal Reserve stands willing to provide liquidity to the markets although modestly. If I was running a pretty profitable business and I needed capital now, could I rely on my existing banking relationship to provide me the capital now? Here is an article in the WSJ on "Prior Loans, Future Pain?" Link . This article is free, no subscription needed . I guess the answer might be how much you need and the terms, but wouldn't you feel slighted if you had a banking relationship with your banker for lets say 10 years and you asked your banker to increase your credit line by about an additional 40% and they said no. In this scenario, with all things being equal, of good personal credit and business scores, pretty robust industry growth projections, and business debt to credit ratio of 1.20 or better. What would be the reason(s) for a bank decline? I called and left a message to a banker...