You have probably already attended various seminars that teach you about strategies on how to manage your financial assets wisely. But have you ever wondered what your real asset really is? Sometimes, you may become so caught up in earning more profits and making more money that you might have lost sight of the things that really matter in your life. These things include your health, your family, your contentment, and your happiness.
Sadly, you will notice that a lot of seemingly successful businesspeople do not enjoy the real assets in life. They may drive the best cars that money can buy or live in posh houses, but what good are all these assets if they are suffering from poor health. They might be experiencing severe stomach or chest pain for which all money in the world is no compensation.
So if you are a businessperson who is constantly on the move tying to find better business opportunities and better investment mediums, you might want to determine if you are compromising your health in order to achieve these goals. One way to do this is to realize several things. The first is the fact that only you can manage your well-being because you are in control of your actions and your feelings. The second is that you need to let go of past failures that continue to haunt you because it will only make you suffer needlessly. Finally, you should remember is that it is possible for you to lose interest in life if you place too much emphasis on items that really don’t matter.
Through it all, it is most important to know who you really are because this will enable you to examine yourself properly so that you will know what can truly make you satisfied and happy. All these facts are pointed out not to tell you that money doesn’t matter because it does. But the real question is to what extent are you willing to sacrifice to have more money?
Here are a couple of questions to ask yourself. The first is whether you would allow stress from work to hinder you from having joy in your life because it is possible to become so caught up with the problems involving work that you might not notice that you are continually making your body suffer from stress and neglect. The next question is whether you will still continue to give time to activities that will not provide a significant improvement on your quality of life. You usually hear about time management skills and its importance but are you really allocating your time wisely to fruitful pursuits?
The answers to these questions can help you to determine if you are really living a life that is worth living.
John Kaighn
Jersey Benefits Advisors
Plug In Profit
John Kaighn's Web Business Review
Saturday, August 25, 2007
Sunday, August 19, 2007
Summer Close Out Sale
As we prepare for the last two weeks of August and the Labor Day Holiday, traditionally a time of vacation, low volume and low volatility on Wall Street, there are many folks who hope the Fed move on Thursday was the right prescription for the credit markets. By dusting off a little used weapon in the monetary policy arsenal, Mr Bernanke has attempted to encourage banks to loan to the credit worthy, without bailing out those who have been irresponsible in the use of leverage. By lowering the discount rate by half a percentage point to 5.75%, the Fed lowered the rate it charges banks when they borrow from the Federal Reserve. While borrowing from the Fed is viewed by banks as the creditor of last resort, this should help companies such as Countrywide, which has a banking operation and is able to borrow from the Fed. It also encourages banks to continue to make credit available to other businesses, who are not necessarily affected by the subprime mortgage mess, but have had a difficult time lately selling commercial paper and other short term financing facilities because banks have been reluctant to make any loans, due to the fallout from the mortgage mess.
The markets reacted positively to the Fed move on Friday, and after reading numerous articles over the weekend, my conclusion is that this was a very good move by the Fed. While it may not stop a further slide in the markets in the short term, it doesn't reinflate the mortgage bubble, because the Federal Funds rate, the rate banks charge each other, hasn't changed. While there is a minority calling for a lowering of the Federal Funds rate, and you can be sure these are the people who are being toasted by their use of leverage, most responsible voices seem to be indicating the system can handle the losses from the subprime mortgage sector and lowering the Federal Funds rate could lead to further speculative excess.
The Dow crossed the 10% correction threshold on Thursday, but managed to close in somewhat better shape and rallied on Friday. While the S&P 500 was down as much as 12% from its July peak intraday on Thursday, it also managed to recover late in the day and rose back to 1,445 by the close on Friday. Where the markets go in the next two weeks is really only an issue, if you have a need for short term cash. If you are invested for the long haul, you ride out the volatility and continue to add to your holdings, for when the markets are down, shrewd investors view it as a sale!
John Kaighn
Jersey Benefits Advisors
Plug In Profit
John Kaighn's Web Business Review
The markets reacted positively to the Fed move on Friday, and after reading numerous articles over the weekend, my conclusion is that this was a very good move by the Fed. While it may not stop a further slide in the markets in the short term, it doesn't reinflate the mortgage bubble, because the Federal Funds rate, the rate banks charge each other, hasn't changed. While there is a minority calling for a lowering of the Federal Funds rate, and you can be sure these are the people who are being toasted by their use of leverage, most responsible voices seem to be indicating the system can handle the losses from the subprime mortgage sector and lowering the Federal Funds rate could lead to further speculative excess.
The Dow crossed the 10% correction threshold on Thursday, but managed to close in somewhat better shape and rallied on Friday. While the S&P 500 was down as much as 12% from its July peak intraday on Thursday, it also managed to recover late in the day and rose back to 1,445 by the close on Friday. Where the markets go in the next two weeks is really only an issue, if you have a need for short term cash. If you are invested for the long haul, you ride out the volatility and continue to add to your holdings, for when the markets are down, shrewd investors view it as a sale!
John Kaighn
Jersey Benefits Advisors
Plug In Profit
John Kaighn's Web Business Review
Monday, August 13, 2007
Welcome to the "Credit Crunch"
In just a few short but grueling weeks, we have gone from an environment where liquidity was king to a "credit crunch", the antithesis of liquidity. Volatility has replaced predictability in the markets and the European Central Bank, their counterparts in other parts of the world, as well as the Fed pumped billions of dollars into money market funds last week to calm nervous markets and provide short term funds. Futures markets are even betting on the Fed to lower interest rates in the near future, to increase liquidity and bail out some of the bad bets on derivative investments, which have been magnified by the use of over the top leverage. Let' hope the Fed doesn't cave.
With interest rates at 5.25%, oil and gasoline prices in decline and the rest of the economy still growing, the interests of the overall economy would be best served by allowing for the liquidation of some of these bad investments and the subsequest pain being felt by the very individuals and institutions who initiated this newest bubble. There is credit available for other sectors of the economy, besides the private equity and subprime mortgage crowds, and while confidence may be shaken somewhat, by an end to easy credit, it is important for those who make bad bets with leverage and create asset bubbles to learn the Fed will not bail them out. Lowering interest rates at this juncture would only reinforce the over leveraged hedge funds and private equity managers to continue their risky ventures and to overpay for assets.
Look for continued volatility in the markets this week as investors try to ascertain whether the subprime debacle has been contained. It is entirely possible the Dow could slip below 13,000 as the market searches for a bottom. Thankfuly, this is also vacation time on Wall Street, so there should be a slowdown in volume after this week as we head into the last two weeks of August and the Labor Day Holiday. This is traditionally the time of the year with the slimmest volume in the markets and many hope that by September, the extent of this latest crisis will be better understood. My hope is that the Fed stays firm with interest rates and uses monetary policy prudently over the next few weeks.
John Kaighn
Jersey Benefits Advisors
Plug In Profit
Internet Home Business Ideas and Opportunities
With interest rates at 5.25%, oil and gasoline prices in decline and the rest of the economy still growing, the interests of the overall economy would be best served by allowing for the liquidation of some of these bad investments and the subsequest pain being felt by the very individuals and institutions who initiated this newest bubble. There is credit available for other sectors of the economy, besides the private equity and subprime mortgage crowds, and while confidence may be shaken somewhat, by an end to easy credit, it is important for those who make bad bets with leverage and create asset bubbles to learn the Fed will not bail them out. Lowering interest rates at this juncture would only reinforce the over leveraged hedge funds and private equity managers to continue their risky ventures and to overpay for assets.
Look for continued volatility in the markets this week as investors try to ascertain whether the subprime debacle has been contained. It is entirely possible the Dow could slip below 13,000 as the market searches for a bottom. Thankfuly, this is also vacation time on Wall Street, so there should be a slowdown in volume after this week as we head into the last two weeks of August and the Labor Day Holiday. This is traditionally the time of the year with the slimmest volume in the markets and many hope that by September, the extent of this latest crisis will be better understood. My hope is that the Fed stays firm with interest rates and uses monetary policy prudently over the next few weeks.
John Kaighn
Jersey Benefits Advisors
Plug In Profit
Internet Home Business Ideas and Opportunities
Wednesday, August 8, 2007
Keeping an Eye on Long Term Trends
As anticipated on Tuesday, the Federal Reserve left interest rates alone, didn't change their outlook on inflation being their primary concern and predicted moderate economic growth going forward. After the gains of Monday and Tuesday this week the Dow is halfway to 14,000 again. A little volatility now and then never hurts, and it keeps the speculators at bay.
Corporate earnings have been mixed, but overall positive, which continues to draw money into stocks. It is hard to sit in cash when the markets provide so much drama and a usually higher return to boot. For the long term investor, the daily business news reports take on an air of entertainment, as they put so much emphasis information with little or no long term significance. Sifting through this fodder for useful long term trends is my major goal.
One of those long term trends, which I have been warning about since early 2006 is housing and subsequently the credit markets. As the credit markets tighten, due to the mess created by lax lending standards during the specuative housing boom, there is a great deal of pain being felt. Containing the damage is critical, which is why the Fed is holding rates steady and not lowering them. Lower rates now would only create more liquidity, which in turn would provide reinforcement for exactly the kind of behaviors the Fed is trying to curb.
John Kaighn
Jersey Benefits Advisors
Plug In Profit
Internet Home Business Ideas and Opportunities
Corporate earnings have been mixed, but overall positive, which continues to draw money into stocks. It is hard to sit in cash when the markets provide so much drama and a usually higher return to boot. For the long term investor, the daily business news reports take on an air of entertainment, as they put so much emphasis information with little or no long term significance. Sifting through this fodder for useful long term trends is my major goal.
One of those long term trends, which I have been warning about since early 2006 is housing and subsequently the credit markets. As the credit markets tighten, due to the mess created by lax lending standards during the specuative housing boom, there is a great deal of pain being felt. Containing the damage is critical, which is why the Fed is holding rates steady and not lowering them. Lower rates now would only create more liquidity, which in turn would provide reinforcement for exactly the kind of behaviors the Fed is trying to curb.
John Kaighn
Jersey Benefits Advisors
Plug In Profit
Internet Home Business Ideas and Opportunities
Saturday, August 4, 2007
Two Steps Back
After a lackluster four days of up and down trading, the subprime woes and a weak jobs report hammered the market on Friday. With hedge funds, builders and mortgage companies melting down, the concern is the housing mess will spill over into other areas of the economy. Hence, the uptick of the unemployment rate to 4.6% gave traders one more reason to unwind their positions.
On Tuesday, the Federal Reserve meets and investors will be looking for any references to the problems in the credit markets or a change in the Fed's position on inflation. There is no indication there will be any change in the Fed's target interest rate of 5.25%, which has held steady for over a year now. Lehman Brothers anticipates the Fed's outlook on growth and inflation will remain unchanged and only a minor acknowledgement of market developments will be mentioned.
The biggest concern I have is how over leveraged the financial system is. Treasury Secretary Paulson has stated the subprime credit fiasco is contained, but others aren't so sure. Alan Abelson, of Barrons, cites concerns by Jeremy Grantham, who runs GMO, an insitutional money manager. Grantham feels we are "watching a very slow train wreck", and that in five years, because of over leverage, at least one major bank will have failed, half of the hedge funds and a substantial percentage of the private-equity companies "will have ceased to exist". One of the great equalizers of our markets is the fact that eventually unsound investments unravel and leave unwise investors holding a worthless bag. The question is how far down do these unsound investments drag the rest of us. Containment becomes a very important issue.
John Kaighn
Jersey Benefits Advisors
Plug in Profit Site
Internet Home Business Ideas and Opportunities
On Tuesday, the Federal Reserve meets and investors will be looking for any references to the problems in the credit markets or a change in the Fed's position on inflation. There is no indication there will be any change in the Fed's target interest rate of 5.25%, which has held steady for over a year now. Lehman Brothers anticipates the Fed's outlook on growth and inflation will remain unchanged and only a minor acknowledgement of market developments will be mentioned.
The biggest concern I have is how over leveraged the financial system is. Treasury Secretary Paulson has stated the subprime credit fiasco is contained, but others aren't so sure. Alan Abelson, of Barrons, cites concerns by Jeremy Grantham, who runs GMO, an insitutional money manager. Grantham feels we are "watching a very slow train wreck", and that in five years, because of over leverage, at least one major bank will have failed, half of the hedge funds and a substantial percentage of the private-equity companies "will have ceased to exist". One of the great equalizers of our markets is the fact that eventually unsound investments unravel and leave unwise investors holding a worthless bag. The question is how far down do these unsound investments drag the rest of us. Containment becomes a very important issue.
John Kaighn
Jersey Benefits Advisors
Plug in Profit Site
Internet Home Business Ideas and Opportunities
Saturday, July 28, 2007
Give Back Time
After barely breaching the 14,000 point, within six trading sessions the Dow Jones Industrial Average managed to bring traders to their knees and have the press discussing the carnage on Wall Street. For the week, the DJIA managed to give back 734.94 points and closed at 13,265.47, which is a 5.24% decline. Of course the DJIA was not alone in its pain, as the Standard and Poor's 500 surrendered 79.33 points to close at 1,473.17 and cough up 5.1% of its value, and the NASDAQ relinquished 5.5% or 150 points, to end the week at 2,562.24. All and all, not a very good week for the indices, as the bears surely trashed the recent party.
Earlier in the week, we spoke of the possibility of more selling, which would not necessarily be a bad thing. This market has not seen a 10% decline, which is considered a correction and generally thought to be a positive occurrence, since this bull run began. Of course no decline in the market comes without some pain for investors, but as the saying goes, "no pain, no gain". Should this be the beginning of a correction, the DJIA would have to fall to 12,600, the S&P 500 to 1,397 and the NASDAQ to 2,441 to register a 10% decline. If this were to occur, it would be painful, but only the S&P 500 would actually be down for the year, as the DJIA and NASDAQ would still be slightly above their January 2007 levels.
What makes this drop particularly intriguing is the fact that we are at a point in the economic cycle, where most economists are expecting about 2.5% GDP growth, which would indicate this is just a bump in the road. However, as we discussed here before, the average economic cycle since 1945 has lasted 67 months, which we have surpassed now in this cycle. With housing and the mortgage debacle weighing on economy, the possibility exists this current economic cycle could be closer to the average, and not like the last two economic cycles we've experienced. So, what do you do about the uncertainty? Swings in the prices of your investments are only paper gains or losses until you sell and lock in the gain or loss. My suggestion is to continue to diversify your holdings, and hope this cycle is another record!
John Kaighn
Jersey Benefits Advisors
Plug in Profit Site
Internet Home Business Ideas and Opportunities
Earlier in the week, we spoke of the possibility of more selling, which would not necessarily be a bad thing. This market has not seen a 10% decline, which is considered a correction and generally thought to be a positive occurrence, since this bull run began. Of course no decline in the market comes without some pain for investors, but as the saying goes, "no pain, no gain". Should this be the beginning of a correction, the DJIA would have to fall to 12,600, the S&P 500 to 1,397 and the NASDAQ to 2,441 to register a 10% decline. If this were to occur, it would be painful, but only the S&P 500 would actually be down for the year, as the DJIA and NASDAQ would still be slightly above their January 2007 levels.
What makes this drop particularly intriguing is the fact that we are at a point in the economic cycle, where most economists are expecting about 2.5% GDP growth, which would indicate this is just a bump in the road. However, as we discussed here before, the average economic cycle since 1945 has lasted 67 months, which we have surpassed now in this cycle. With housing and the mortgage debacle weighing on economy, the possibility exists this current economic cycle could be closer to the average, and not like the last two economic cycles we've experienced. So, what do you do about the uncertainty? Swings in the prices of your investments are only paper gains or losses until you sell and lock in the gain or loss. My suggestion is to continue to diversify your holdings, and hope this cycle is another record!
John Kaighn
Jersey Benefits Advisors
Plug in Profit Site
Internet Home Business Ideas and Opportunities
Wednesday, July 25, 2007
No Housing Bottom In Sight
Market Update
On Tuesday the Dow Jones Industrial Average fell 226.47 points, primarily on earnings news from mortgage lenders, and in particular Countrywide Financial Corp. The company said it doesn't expect the mortgage business to recover until 2009, and that gave traders reason enough to dump shares. While my expectation is traders will jump back into the market today, we also have to remember there has not been a major correction in this market yet, so anything is possible. The biggest fear is the deflating of the housing market will chill the consumer's willingness to spend, due to a perception of less personal wealth caused by lower equity in their homes. If the consumer pulls back on spending, profits at corporations take a hit and that is not good for the market.
Email Aesthetics
It`s an old, old saying, but it`s true: you only have one
chance to make a good first impression. And in email, the
first impression is always visual -- a consumer LOOKS/SEES
before he/she READS.
Imagine walking by a grotesquely garish storefront with all
kinds of things hanging off the front porch, every floor
painted a different color, and odd music playing through
loudspeakers. Would you want to walk in the front door? No
way! You`d assume that the owner is a kook, at best, or a
deranged axe murderer, at worst.
Did you ever have an ugly looking email land in your
mailbox? You know what I`m talking about: an orange
background and yellow borders, multi-colored text in all
sizes from gigantic to microscopic, a message that looks like
it was created by a crazed six-year-old? If you did, I bet
you didn`t feel the urge to read it. You probably just
wanted to delete it as quickly as possible.
=> PUT OUT THE WELCOME MAT
You want your email message to be friendly and inviting, not
bizarre and scary. The suggestions below -- and they`re
just suggestions, not hard and fast rules -- will go a long
way towards making recipients` eyes say "come on in!" to
your message.
=> DO`s and DON`Ts FOR ATTRACTIVE EMAILS
-DON`T use COLOR fonts in your message. (Leave that to
junior high girls who want to write about Britney and
Justin)
-DO use BLACK TEXT ON A WHITE BACKGROUND. (When you`re
"speaking" in black-and-white, people will give their full
attention to your message without being distracted by your
color scheme.)
-DON`T use UNCOMMON FONTS. (If someone`s system doesn`t
recognize the font you`ve selected, they could see gibberish
instead of your brilliant message).
-DO use the email marketers` FAVORITE FONTS: Arial, Times
New Roman, and Courier New
And please.
-DON`T use flashing buttons or banners in your email! (Your
prospects have undoubtedly gotten their fill of "bells and
whistles" when they`ve surfed the Internet. They don`t need
more from you.)
=> GET HYPER" WITH EMAIL HYPERLINKS
An "email hyperlink" is just techno-talk for a link in your
email to a website, or email address. Sounds simple enough,
and it is -- unless you try to contact a prospect on AOL who
may not be able to receive "clickable" links.
Don`t worry. There`s a "fix" for this: simply type mailto:
in front of your email address (no space in between, and
include the : )
For a link to a web page, you need to write your link this
way: href=http://www.anycompany.com>http://www.anycompany.com
. (And tell your recipient they can copy and paste this
link into their browser if it`s not highlighted.)
=> ALWAYS USE SIGNATURE TAGS
Today, it`s common practice on the Internet to tell people
about your product or service with a SIGNATURE TAG, which is
3-6 lines of text (usually) that is automatically added to
every message you send.
If you`d like to add a tag to your messages, simply open
your email program. Find the SIGNATURES TAB (located in the
TOOLS/OPTIONS menu in Outlook Express). Follow the (simple)
instructions for creating a sig file. Easy as pie...and the
results will amaze you.
That`s it for now, but get your "net" ready. Next lesson
we`re going to hunt down and CAPTURE EMAILS.
Sincerely,
John Kaighn
Jersey Benefits Advisors
Plug in Profit Site
Internet Home Business Ideas and Opportunities
On Tuesday the Dow Jones Industrial Average fell 226.47 points, primarily on earnings news from mortgage lenders, and in particular Countrywide Financial Corp. The company said it doesn't expect the mortgage business to recover until 2009, and that gave traders reason enough to dump shares. While my expectation is traders will jump back into the market today, we also have to remember there has not been a major correction in this market yet, so anything is possible. The biggest fear is the deflating of the housing market will chill the consumer's willingness to spend, due to a perception of less personal wealth caused by lower equity in their homes. If the consumer pulls back on spending, profits at corporations take a hit and that is not good for the market.
Email Aesthetics
It`s an old, old saying, but it`s true: you only have one
chance to make a good first impression. And in email, the
first impression is always visual -- a consumer LOOKS/SEES
before he/she READS.
Imagine walking by a grotesquely garish storefront with all
kinds of things hanging off the front porch, every floor
painted a different color, and odd music playing through
loudspeakers. Would you want to walk in the front door? No
way! You`d assume that the owner is a kook, at best, or a
deranged axe murderer, at worst.
Did you ever have an ugly looking email land in your
mailbox? You know what I`m talking about: an orange
background and yellow borders, multi-colored text in all
sizes from gigantic to microscopic, a message that looks like
it was created by a crazed six-year-old? If you did, I bet
you didn`t feel the urge to read it. You probably just
wanted to delete it as quickly as possible.
=> PUT OUT THE WELCOME MAT
You want your email message to be friendly and inviting, not
bizarre and scary. The suggestions below -- and they`re
just suggestions, not hard and fast rules -- will go a long
way towards making recipients` eyes say "come on in!" to
your message.
=> DO`s and DON`Ts FOR ATTRACTIVE EMAILS
-DON`T use COLOR fonts in your message. (Leave that to
junior high girls who want to write about Britney and
Justin)
-DO use BLACK TEXT ON A WHITE BACKGROUND. (When you`re
"speaking" in black-and-white, people will give their full
attention to your message without being distracted by your
color scheme.)
-DON`T use UNCOMMON FONTS. (If someone`s system doesn`t
recognize the font you`ve selected, they could see gibberish
instead of your brilliant message).
-DO use the email marketers` FAVORITE FONTS: Arial, Times
New Roman, and Courier New
And please.
-DON`T use flashing buttons or banners in your email! (Your
prospects have undoubtedly gotten their fill of "bells and
whistles" when they`ve surfed the Internet. They don`t need
more from you.)
=> GET HYPER" WITH EMAIL HYPERLINKS
An "email hyperlink" is just techno-talk for a link in your
email to a website, or email address. Sounds simple enough,
and it is -- unless you try to contact a prospect on AOL who
may not be able to receive "clickable" links.
Don`t worry. There`s a "fix" for this: simply type mailto:
in front of your email address (no space in between, and
include the : )
For a link to a web page, you need to write your link this
way: href=http://www.anycompany.com>http://www.anycompany.com
. (And tell your recipient they can copy and paste this
link into their browser if it`s not highlighted.)
=> ALWAYS USE SIGNATURE TAGS
Today, it`s common practice on the Internet to tell people
about your product or service with a SIGNATURE TAG, which is
3-6 lines of text (usually) that is automatically added to
every message you send.
If you`d like to add a tag to your messages, simply open
your email program. Find the SIGNATURES TAB (located in the
TOOLS/OPTIONS menu in Outlook Express). Follow the (simple)
instructions for creating a sig file. Easy as pie...and the
results will amaze you.
That`s it for now, but get your "net" ready. Next lesson
we`re going to hunt down and CAPTURE EMAILS.
Sincerely,
John Kaighn
Jersey Benefits Advisors
Plug in Profit Site
Internet Home Business Ideas and Opportunities
Monday, July 23, 2007
Market Update
After a quick perusal of the Wall Street Journal this morning, I counted no less than four articles relating to the subprime mortgage mess. When you consider the damage done to the two Bear Stearn's hedge funds, by leveraging their purchases of securities consisting of subprime mortgage debt, you can understand why the media is all over this one. According to an article by Alan Abelson in Barrons, the combined total of the losses in these two funds is approximatey $20 billion. What is even more eye popping is the amount of leverage used. As of March 2007, the two funds had a total of $1.5 billion in investor money, and with those funds were able to purchase assets, some long and some short, which were valued at $20 billion. By June 30, 2007, after a bail out by Bear Stearns, the less leveraged High-Grade Structured Credit Strategies Fund had about $1.6 billion in value left, while its sibling, the High-Grade Structured Credit Strategies Enhanced Leverage Fund was wiped out.
On a brighter note, the Dow Jones Industrial Average cracked the 14,000 level by .41 of a point on Thursday, only to give back 149.3 points on Friday as investors fretted about corporate earnings. The Standard and Poor's 500 also closed in record territory on Thursday at 1,553.08, but also retrenched 18.98 points on Friday. At just past mid year, the Dow is up 11.14% and the S&P 500 is up 8.16% year to date. The NASDAQ is also up 11.27% so far this year, and many bulls feel the indices still have some strength left as speculation, evidenced by small investor trading, is practically nonexistent.
While economic growth has accelerated recently, core inflation in the CPI has been muted. The Federal Reserve is still somewhat uncertain about the direction of inflation, as demonstrated by the statement, "sustained moderation hasn't been convincingly demonstrated". Recently, the Bureau of Labor and Statistics issued new research, which suggests a slowdown in home ownership costs, in particular owner equvalent rent (OER), which is a measure how much a homeowner would receive for renting his home. OER makes up approximately 24% of the CPI, and the slowdown in housing has resulted in more homes being rented, which restrains the rate of increase in rents. If this new research holds up, then we could conceivable see more benign inflation statistics going forward. Now, if we could only find a way to restrain the rate of increase of the non-core components: FOOD and ENERGY!
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Jersey Benefits Advisors and Internet Home Business Ideas and Opportunities
On a brighter note, the Dow Jones Industrial Average cracked the 14,000 level by .41 of a point on Thursday, only to give back 149.3 points on Friday as investors fretted about corporate earnings. The Standard and Poor's 500 also closed in record territory on Thursday at 1,553.08, but also retrenched 18.98 points on Friday. At just past mid year, the Dow is up 11.14% and the S&P 500 is up 8.16% year to date. The NASDAQ is also up 11.27% so far this year, and many bulls feel the indices still have some strength left as speculation, evidenced by small investor trading, is practically nonexistent.
While economic growth has accelerated recently, core inflation in the CPI has been muted. The Federal Reserve is still somewhat uncertain about the direction of inflation, as demonstrated by the statement, "sustained moderation hasn't been convincingly demonstrated". Recently, the Bureau of Labor and Statistics issued new research, which suggests a slowdown in home ownership costs, in particular owner equvalent rent (OER), which is a measure how much a homeowner would receive for renting his home. OER makes up approximately 24% of the CPI, and the slowdown in housing has resulted in more homes being rented, which restrains the rate of increase in rents. If this new research holds up, then we could conceivable see more benign inflation statistics going forward. Now, if we could only find a way to restrain the rate of increase of the non-core components: FOOD and ENERGY!
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Jersey Benefits Advisors and Internet Home Business Ideas and Opportunities
Friday, July 13, 2007
Dow Sets New Record
As I mentioned on Monday, earnings season is upon us, as public companies release their quarterly earnings reports and guidance for the upcoming quarter. So far, investors seem to like the guidance they are receiving, because the Dow Jones Industrial Average rocketed to a new high of 13,861.73, gaining 283.86 points on the day. This was the best one day gain for the index in four years. Mergers and acquisition activity, as well as solid retail sales and lower crude oil prices helped fuel the buying. The Standard and Poor's 500 also posted a record close of 1,547.70 gaining 29 points, while the NASDAQ added 49 points to close at 2,701.73.
The Bush Administration released its midsession budget review on Wednesday, and the estimates are that the budget deficit should be $205 billion for for 2007, which is better that 50% less than the deficit in 2004, which was $413 billion. While those numbers may seem astronomical, it is important to note that they represent 1.5% of the total share of the economy. This is well below the 40 year average budget deficit of 2.4%. The Congressional Budget Office says tax collections are so strong, that the deficit could actually be under $200 billion by years end.
One reason for this strength in tax revenue is due to the tax cuts in 2003 on investment. While tax cuts take some time to work their way into the economy, the main reason the deficit is shrinking is due to increased tax revenues. Federal tax receipts have increased nearly $700 billion since 2004, which is the largest ever tax revenue gain over a similar period of time. Going forward, the biggest risk to continued deficit reduction is not the war on terror, but rather the potential economic slowdown due to protectionist policies on trade.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Jersey Benefits Advisors and Internet Home Business Ideas and Opportunities
The Bush Administration released its midsession budget review on Wednesday, and the estimates are that the budget deficit should be $205 billion for for 2007, which is better that 50% less than the deficit in 2004, which was $413 billion. While those numbers may seem astronomical, it is important to note that they represent 1.5% of the total share of the economy. This is well below the 40 year average budget deficit of 2.4%. The Congressional Budget Office says tax collections are so strong, that the deficit could actually be under $200 billion by years end.
One reason for this strength in tax revenue is due to the tax cuts in 2003 on investment. While tax cuts take some time to work their way into the economy, the main reason the deficit is shrinking is due to increased tax revenues. Federal tax receipts have increased nearly $700 billion since 2004, which is the largest ever tax revenue gain over a similar period of time. Going forward, the biggest risk to continued deficit reduction is not the war on terror, but rather the potential economic slowdown due to protectionist policies on trade.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Jersey Benefits Advisors and Internet Home Business Ideas and Opportunities
Monday, July 9, 2007
It's Earnings Season, Again!
Investors will be eyeing second quarter earnings reports over the next few weeks to get a feel for the health of corporate profits, which will set the tone for the direction of the stock market. Last week's employment numbers were better than expected, which shows the economy is still humming along. The unemployment rate held steady at 4.5%, nonfarm payrolls rose by 132,000 in June, while the April and May numbers were revised upward by a combined 75,000 jobs.
During the holiday shortened week, the the market stayed in a tight trading range, as crude oil moved above $76 a barrel. Even with oil prices moving upward, gasoline prices have been holding steady, due to the fact that inventories have been higher than expected. Treasury yields also inched up to 5.19%, but the increase didn't seem to spook the market. For the market to resume its upward trend, earnings are going to have to meet or exceed forcasts, and the guidance by companies will be scrutinized extensively.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Internet Home Business Ideas and Opportunities and Jersey Benefits Advisors
During the holiday shortened week, the the market stayed in a tight trading range, as crude oil moved above $76 a barrel. Even with oil prices moving upward, gasoline prices have been holding steady, due to the fact that inventories have been higher than expected. Treasury yields also inched up to 5.19%, but the increase didn't seem to spook the market. For the market to resume its upward trend, earnings are going to have to meet or exceed forcasts, and the guidance by companies will be scrutinized extensively.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit Internet Home Business Ideas and Opportunities and Jersey Benefits Advisors
Wednesday, July 4, 2007
Reciprocal Review Carousel
Reciprocal Review Carousel
Category: Blogging
Do you want to get some extra visitors to your blog and increase your link popularity at the same time? I am sure the answer to this question is probably a resounding Yes!. Read on to find out how you can quickly and easily use this viral technique...
Bill Shultz, a fellow Internet Marketer and Plug-In Profit site owner told me about this technique, which Jack Humphrey calls linking on steroids! It's an effective way to post quality content to your blog and get lots of links back at the same time.
All you need to do to join in is follow the instructions below:
---copy and paste the Reciprocal Review Carousel and instructions below this line ---
The Reciprocal Review Carousel idea is based on a few simple yet effective link-building and blogging techniques I have learned:
Build value of the blog by creating a helpful link from within content.
Provide value to community by doing a review on a blog you personally like.
Link to YOUR blog has exact anchor text you want and helps you boost Google Rankings.
No more than 30 outbound links from any page to prevent penalties for link farming.
Viral effect of the link as more bloggers participate, link to your blog with YOUR anchor text, coming from quality content post will spread.
Here is How to participate:
Copy the entire text between the specified lines.
Create a post on your site and put at least one paragraph explaining how you joined the Reciprocal Review Carousel.
Paste the text you copied into your post.
Remove the Bottom Review and At the Top add your own review with a link to a site reviewed, at least 2 sentences about the site and a note Reviewed by: Your Anchor Text.
Link your anchor text to your site. Here is an example:
WordPress Web 2.0 Guide is a blog providing very useful information on building your very own Web 2.0 portal based on WordPress. Detailed instructions and howto guides make it possible for anyone to create a sparkling and engaging blog and join the community of like-minded individuals. Reviewed by: WordPress Web 2.0 Spot-er
Sites Reviewed:
Bill Shultz's Blog, PipelineIncomes.com is a regularly updated blog which strives to give information about internet home business opportunities to people interested in developing a home business. It is informative and provides links to many business opportunities on the internet. Nice job of incorporating the blog into your site, Bill. Reviewed by John Kaighn for the Jersey Benefits Blog and The Kaighn Report which provide information for entrepreneurs in the areas of investments, finance and Education.
Carl Hendricks Home Based Business Prosperity is a well-established blog where you can find multitude of information on Internet Marketing and blogging. Carl's blog is jam packed with helpful tips and ideas to help you with your online business. Reviewed by: Bill Shultz for his Pipeline Incomes blog.
Gamy Rachel has a blog - Make A Living Honestly that provides readers with methods of being profitable online while mainitaining the highetst levels of integrity. You will find helpful advice on article marketing, working from home and quality affiliate programs. You will find ways to develop a robust home based business Reviewed by: Carl Hendricks Home Based Business Prosperity.
Wolney H Filho's Work at Home Online blog provides lots of tips and advice for people who want to start a work at home business. Wolney has over 10 years of networking experience and regularly updates his blog to give you the latest ideas on how to work at home online and how to promote your website. Reviewed by Suzanne Morrison for her Internet Business Ideas blog.
Dean's Home Business Reporter is a WordPress blog of an associate whom helped I setup another blog for just a short time ago. Yet in this short time Dean has learned the power of blogging and has installed a new blog on his own that is shaping up to be a great resource for those looking for work at home business opportunities. Reviewed by Jeff Houdyschell @ Work At Home BusinessBlog
Jeff Houdyschell's Work At Home Business Blog is loaded with all the information you might need to know about the work at home business industry. It is designed to be easy to find what you are looking for and what he has to offer. Jeff also offers a very unique personalized WordPress Installation Service at a very affordable cost. I have used this service. I will highly recommend Jeff to any one that wants a blog installed on their own domain. Check him out you won't be sorry.Reviewed by: Dean@Dean's Home Business Reporter
Suzanne Morrison's Internet Home Business Ideas Blog is an excellent Blog. She can help you to make a full time income from the internet. She is part of the Plug-In Profit Site team and her blog is frequently updated with Internet home business ideas, product reviews and suggestions for and promoting your website. Reviewed by Wolney H Filho, the work at home online blog.
Mal Keenan's Internet Marketing Blog is a frequently updated blog on everything pertaining to the world of internet marketing and home business. He includes plenty of internet marketing tips and techniques in his blog and also reviews the latest internet marketing products. Unlike some marketers who recommend every product under the sun, Mal has a very honest approach to his reviews and only recommends products that have actually worked for him. Reviewed by Suzanne Morrison for her Internet Business Ideas blog
Jeff Schuman's make money blog is one of those blogs that I visit often. Jeff has become an expert in achieiving top search engine rankings for some of the most competitive ‘making money online’ keyword phrases. Reviewed by Mal Keenan's Internet Marketing blog.
Jeff Casmer's Work At Home Blog is an excellent blog that ties in well with his top rated work at home directory. He works hard at helping people and his blog is updated reguarly with information that is timely to help you work from home and earn money. Reviewed by: Jeff Schuman for his make money blog to help people make more money and get more traffic.
Jack Humphrey's blog The Friday Traffic Report is just another in a long line of things I read when it is done by Jack. Of course his Power Linking and Authority Black Book are just two examples of the tremendous information he provides. He blogs now about Web 2.0 and social marketing and if you are looking for tips to get more traffic you should check it out and subscribe to his feed. Reviewed by: Jeff Schuman for his make money blog to help people make more money and get more traffic.
Peter Lenkefi writes about Web 2.0 marketing strategies at Web2Center.com. He has some killer videos over there you should check out along with a ton of good information on blog marketing and various “new media†promotion tactics. Reviewed by: Link Building Maniac, Jack Humphrey, for the Friday Traffic Report
--- copy and paste the Reciprocal Review Carousel and instructions above this line ---
To summarize, you just need to copy everything between the two lines and then remove the review at the bottom and add your review of someone else's blog at the top!
Hopefully this will bring you some top quality links and traffic.
John Kaighn
Home Business Ideas and Opportunities
Jersey Benefits Advisors
Category: Blogging
Do you want to get some extra visitors to your blog and increase your link popularity at the same time? I am sure the answer to this question is probably a resounding Yes!. Read on to find out how you can quickly and easily use this viral technique...
Bill Shultz, a fellow Internet Marketer and Plug-In Profit site owner told me about this technique, which Jack Humphrey calls linking on steroids! It's an effective way to post quality content to your blog and get lots of links back at the same time.
All you need to do to join in is follow the instructions below:
---copy and paste the Reciprocal Review Carousel and instructions below this line ---
The Reciprocal Review Carousel idea is based on a few simple yet effective link-building and blogging techniques I have learned:
Build value of the blog by creating a helpful link from within content.
Provide value to community by doing a review on a blog you personally like.
Link to YOUR blog has exact anchor text you want and helps you boost Google Rankings.
No more than 30 outbound links from any page to prevent penalties for link farming.
Viral effect of the link as more bloggers participate, link to your blog with YOUR anchor text, coming from quality content post will spread.
Here is How to participate:
Copy the entire text between the specified lines.
Create a post on your site and put at least one paragraph explaining how you joined the Reciprocal Review Carousel.
Paste the text you copied into your post.
Remove the Bottom Review and At the Top add your own review with a link to a site reviewed, at least 2 sentences about the site and a note Reviewed by: Your Anchor Text.
Link your anchor text to your site. Here is an example:
WordPress Web 2.0 Guide is a blog providing very useful information on building your very own Web 2.0 portal based on WordPress. Detailed instructions and howto guides make it possible for anyone to create a sparkling and engaging blog and join the community of like-minded individuals. Reviewed by: WordPress Web 2.0 Spot-er
Sites Reviewed:
Bill Shultz's Blog, PipelineIncomes.com is a regularly updated blog which strives to give information about internet home business opportunities to people interested in developing a home business. It is informative and provides links to many business opportunities on the internet. Nice job of incorporating the blog into your site, Bill. Reviewed by John Kaighn for the Jersey Benefits Blog and The Kaighn Report which provide information for entrepreneurs in the areas of investments, finance and Education.
Carl Hendricks Home Based Business Prosperity is a well-established blog where you can find multitude of information on Internet Marketing and blogging. Carl's blog is jam packed with helpful tips and ideas to help you with your online business. Reviewed by: Bill Shultz for his Pipeline Incomes blog.
Gamy Rachel has a blog - Make A Living Honestly that provides readers with methods of being profitable online while mainitaining the highetst levels of integrity. You will find helpful advice on article marketing, working from home and quality affiliate programs. You will find ways to develop a robust home based business Reviewed by: Carl Hendricks Home Based Business Prosperity.
Wolney H Filho's Work at Home Online blog provides lots of tips and advice for people who want to start a work at home business. Wolney has over 10 years of networking experience and regularly updates his blog to give you the latest ideas on how to work at home online and how to promote your website. Reviewed by Suzanne Morrison for her Internet Business Ideas blog.
Dean's Home Business Reporter is a WordPress blog of an associate whom helped I setup another blog for just a short time ago. Yet in this short time Dean has learned the power of blogging and has installed a new blog on his own that is shaping up to be a great resource for those looking for work at home business opportunities. Reviewed by Jeff Houdyschell @ Work At Home BusinessBlog
Jeff Houdyschell's Work At Home Business Blog is loaded with all the information you might need to know about the work at home business industry. It is designed to be easy to find what you are looking for and what he has to offer. Jeff also offers a very unique personalized WordPress Installation Service at a very affordable cost. I have used this service. I will highly recommend Jeff to any one that wants a blog installed on their own domain. Check him out you won't be sorry.Reviewed by: Dean@Dean's Home Business Reporter
Suzanne Morrison's Internet Home Business Ideas Blog is an excellent Blog. She can help you to make a full time income from the internet. She is part of the Plug-In Profit Site team and her blog is frequently updated with Internet home business ideas, product reviews and suggestions for and promoting your website. Reviewed by Wolney H Filho, the work at home online blog.
Mal Keenan's Internet Marketing Blog is a frequently updated blog on everything pertaining to the world of internet marketing and home business. He includes plenty of internet marketing tips and techniques in his blog and also reviews the latest internet marketing products. Unlike some marketers who recommend every product under the sun, Mal has a very honest approach to his reviews and only recommends products that have actually worked for him. Reviewed by Suzanne Morrison for her Internet Business Ideas blog
Jeff Schuman's make money blog is one of those blogs that I visit often. Jeff has become an expert in achieiving top search engine rankings for some of the most competitive ‘making money online’ keyword phrases. Reviewed by Mal Keenan's Internet Marketing blog.
Jeff Casmer's Work At Home Blog is an excellent blog that ties in well with his top rated work at home directory. He works hard at helping people and his blog is updated reguarly with information that is timely to help you work from home and earn money. Reviewed by: Jeff Schuman for his make money blog to help people make more money and get more traffic.
Jack Humphrey's blog The Friday Traffic Report is just another in a long line of things I read when it is done by Jack. Of course his Power Linking and Authority Black Book are just two examples of the tremendous information he provides. He blogs now about Web 2.0 and social marketing and if you are looking for tips to get more traffic you should check it out and subscribe to his feed. Reviewed by: Jeff Schuman for his make money blog to help people make more money and get more traffic.
Peter Lenkefi writes about Web 2.0 marketing strategies at Web2Center.com. He has some killer videos over there you should check out along with a ton of good information on blog marketing and various “new media†promotion tactics. Reviewed by: Link Building Maniac, Jack Humphrey, for the Friday Traffic Report
--- copy and paste the Reciprocal Review Carousel and instructions above this line ---
To summarize, you just need to copy everything between the two lines and then remove the review at the bottom and add your review of someone else's blog at the top!
Hopefully this will bring you some top quality links and traffic.
John Kaighn
Home Business Ideas and Opportunities
Jersey Benefits Advisors
Saturday, June 30, 2007
Jersey Benefits Advisors Newsletter - Summer 2007
FED DECISION ON RATES SEEMS TO CREATE CALM
Market Watch
The Federal Reserve ended its June Federal Open Market Committee meeting on June 28th, and the only change indicated for the foreseeable future is that the Fed sees core inflation as somewhat less of a risk, while overall inflation is still a concern. Interest rates remained on hold at 5.25%, where they have been for a year now, and investors hoping for a rate cut have capitulated. This surrender by bond investors has provided a slightly positive slope to the yield curve, as long term rates are modestly higher than short term rates.
This leads me to believe there may be another way to view the inversion of the yield curve, which happened last year. While many view an inversion of the yield curve as a precursor to recession, historically we have not had a recession every time the yield curve inverts. This last inversion did precede the first quarter economic slowdown of 2007, so perhaps the inversion of the yield curve in 2006 was indicating the mid cycle slowdown which occurred earlier this year. The US economy has been expanding since November of 2001, so based on the length of the last two economic cycles, the first quarter slowdown of 2007 occurred right in the middle of the cycle. However, it should also be noted that the last two US economic cycles have been records, stretching from November 1982 to March 1991 and March 1991 to November 2001, when analyzed from the bottom of one cycle to the bottom of the next cycle, or trough to trough. There were 10 economic cycles from 1945-2001, and the average duration from trough to trough was 67 months. Nobody can really say, with any certainty, how long the current cycle will last, but given all of the shocks incurred over the last five years, the economy has been quite resilient.
Of course, as long as the economy is growing, the stock market will react in a favorable manner. Although the indices are off their peaks set in the second quarter, as the books were closed on the first half of 2007, the DJIA stood at 13,408.62 which is a gain of 7.6% year to date. The NASDAQ closed at 2,603.23 for a gain of 7.8% thus far for 2007. The S&P 500 finished at 1,503.35 which is an increase of 6.0% for 2007. While the S&P 500 is off its record close of 1,539.18, the fact that it finally surpassed the old record of 1,527.46 set back in 2000 is a significant technical feat which bodes well for a continuation of the current bull market.
The consensus of economic forecasts for the second half of 2007 predict GDP growth of between 2%-3%, which is what should be expected for a mature expansion. How much strength remains in the economy depends on a number of factors. Maintaining healthy growth without increased inflation is paramount. While core inflation seems to be under control, the increases in the prices of food and energy are being felt by everyone. There is also a great deal of concern regarding the subprime mortgage market and the collateralized debt obligations and collateralized mortgage obligations on which many hedge funds feed. With mortgage foreclosures in the subprime market increasing, which lowers the value of CDO’s and CMO’s, there is a fear many hedge funds could incur significant losses, like those at Bear Stearns, as the value of their portfolios are rebalanced at the end of the quarter. As with most aggressive investment bets, when fundamentals change, things can go south in a hurry. In my mind this is just one more reason for diversifying your assets and not chasing returns.
Hype, Hope and the 4th of July Holiday
The Blackstone IPO and Apple iPhone’s debut were two very hyped events which took place in June. While Blackstone’s stock initially surged, it is now below the original offering price as private equity houses begin to reassess the cost of doing ever larger deals as the cost of debt increases. Apple’s faithful lined up in front of stores for days, prior to the release of the iPhone, and even with a cost of $599, sales are expected to be brisk. One can’t help but wonder how many people really want to watch video on their cell phone, especially with all of the huge plasma and LCD screens available for only a few hundred dollars more. Then again, after the 4th of July fireworks, it might be nice to relive the experience again and again while sitting in traffic on the way home.
PRIVACY POLICY
At Jersey Benefits Advisors and Jersey Benefits Group, Inc. protecting your privacy is very important to us. We want you to understand what information we collect and how we use it. We collect and use information from you on applications and other forms as well as information about financial transactions with us and from non-affiliated third parties. This “nonpublic personal information” is obtained in connection with providing a financial product or service to you.
We do not disclose any nonpublic personal information about you without your express consent, except as permitted by law. We may disclose the nonpublic personal information we collect to persons or companies that perform services on our behalf.
We restrict access to your nonpublic personal information and only allow disclosures to persons and companies as permitted by law to assist in providing products or services to you.
We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information at all times.
ROLLOVER ASSISTANCE
Many people have 401k or 403b accounts from jobs they’ve left for various reasons. One of the problems with this is the duplication of objectives within each account. Having a lot of funds, in several accounts, does not always provide the diversification you aim to achieve.
If you or a family member are in this situation, and would like to consolidate assets into one diversified IRA and receive just one statement, please give me a call to analyze the accounts, make recommendations and assist with the paperwork involved. As long as you have terminated employment with the employer, or the particular plan has been terminated, you are eligible to roll the funds over into an IRA. You do not have to be of retirement age.
If you have retired, or are considering retirement, you have the option to move assets out of your employer plan and into an account, which can provide a lifetime income, when you retire. The whole idea is to work with someone you trust and is available to you, when you wish to discuss your account. Every employer plan is different, and every individual is different, so personal preference is very important, and there is no “one plan fits all”.
Depending on your appetite for risk, IRA accounts can be in stocks, bonds, mutual funds or ETF’s with one or more companies. If you’re somewhat risk averse, variable annuities offer participation in the market with downside protection and guaranteed growth for an additional fee. Feel free to give me a call to discuss your options.
COMPANY INFORMATION:
Investment Advisory services offered through:
Jersey Benefits Advisors
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: kaighn@jerseybenefits.com
Http://www.jerseybenefits.com
Securities offered through:
Transamerica Financial Advisors, Inc.
A registered Broker/Dealer
1150 S. Olive St. Suite T-25
Los Angeles, CA 90015
800-245-8250
Member NASD & SIPC
Third Party Administration and Insurance Services offered through:
Jersey Benefits Group, Inc
P.O. Box 1406
Ocean City, N.J. 08226
Phone: 609 827 0194
Fax: 609 861 9257
Email: jerseybenefits@yahoo.com
Http://www.jerseybenefits.com/
All opinions expressed in this newsletter are solely those of John Kaighn & Jersey Benefits Advisors, formerly known as Kaighn Financial Services.
Visit our website at http://johnkaighn.com
Monday, June 25, 2007
Winds of War
Normally, I write my entire blog, but on ocassion an article comes to my attention which I think needs to be shared. Such is the case of this editorial by Joshua Muravchik, which appeared in the Wall Street Journal this morning. We live in dangerous times, and I believe there are many people in this country who have not fully assessed the dangers posed by radical Islam and in particular, Iran. This article serves as a bit of a current events and history lesson as well as a warning of a future Middle Eastern regional conflict, which could draw us in, should we continue to run up the white flag in Iraq.
WINDS of WAR
By Joshua Muravchik
Several conflicts of various intensities are raging in the Middle East. But a bigger war, involving more states-Israel, Lebanon, Syria, Iran, the Palestinian Authority and perhaps the United States and others is growing more likely everyday, beckoned by the sense that America and Israel are in retreat and that radical Islam is ascending.
Consider the pell-mell events of recent weeks. Iran imprisons four Americans on absurd charges only weeks after seizing 15 British sailors on the high seas. Iran's Revolutionary Guard is caught delivering weapons to the Taliban and explosives to Iraqi terrorists. A car bomb in Lebanon is used to assassinate parliament member Walid Eido, killing nine others and wounding 11 more. At the same time, Fatah al-Islam, a shady group linked to Syria, launches an attack on the Lebanese army from within a Palestinian refugee area, beheading several soldiers. Tehran trumpets further progress on nuclear enrichment as President Mahmoud Ahmadinejad repeats his call for annihilating Israel, crowing that "the countdown to the destruction of this regime has begun."Hamas seizes control militarily in Gaza. Katyusha rockets are
launched from Lebanon into northern Israel for the first time since the end of last summer's Israel-Hezbollah war.
Two important inferences can be distilled from this list. One is that the Tehran regime takes its slogan, "death to America,"quite seriously,even if we do not. It is arming the Taliban, with which it was at sword's point when the Taliban were in power.
Dictatorships
start wars
by underestimating
democracies. Events
in the Middle East
suggest Iran is
making that mistake.
It seems to be supplying explosives not only to Shiite, but also Sunni terrorists in Iraq. It reportedly is sheltering high-level al Qaeda figures despite the Sunni-Shiite divide. All of these surprising actions are for the sake of bleeding the U.S.
However hateful this behavior may be to us, it has a certain strategic logic: "The enemy of my enemy is my friend." What is even more worrisome about the events enumerated above is that most of them are devoid of any such strategic logic. For example,the Hamas "putsch" in Gaza-as Marwan Barghouti, the hero of the Palestinian
intifada, labeled it from his prison cell-was an enormous blunder.
Hamas already mostly controlled Gaza. It is hard to imagine what gains it can reap from its "victory." But it is easy to see the losses. Fatah, and the government of its leader Mahmoud Abbas, will be able to restore their strength in the West Bank with the eager assistance of virtually the whole outside world, while Gaza will be shut off and denied outside aid far more strictly than during the past year. Israel
will retaliate against shelling with a freer hand. Egypt will tighten its border.
And Hamas has in one swoop negated its own supreme achievement, namely winning a majority in Palestine's 2006 parliamentary elections. Until now,Hamas had a powerful argument: how can the West demand democracy and then boycott the winners?
But now it is Hamas itself that has destroyed Palestinian democracy by staging an armed coup. Its democratic credentials have gone up in the smoke of its own arson.
Syria's actions in Lebanon scarcely make moresense. The murder of parliamentarian
Eido will solidify and energize the majority that opposes Syria. Some suppose that, having now bumped off two Lebanese MPs (Pierre Gemayel was the other one), Syria
plans to shave away the anti-Syrian majority in Lebanon's parliament by committing
another five murders. But if so, this is a crazy gambit. Such a campaign would invite international intervention. It might well fracture the pro-Syrian forces: More Shiites will abandon Hezbollah and more Maronites will turn against Hezbollah's cat's-paw, Michel Aoun. And the murders might be for naught anyway: By-elections are
already being planned that are likely to replace the martyred legislators with
others of the same mind.As for the attack on the Lebanese army, Fatah aI-Islam is on the brink of being crushed, leaving behind only more hatred of Syria and a better-armed, more confident Lebanese army.
As for Iran's actions, while arming the Taliban and Iraqi terrorists may make sense, what is the point of seizing British sailors or locking up the four Iranian-Americans, including the beloved 67 year-old scholar, Haleh Esfandieri, none of whom are involved even in political activity, much less in the exercise of hard power?
The apparent meaning of all of this pointless provocation and bullying is that the ails of radicals-Iran, Syria, Hamas and Hezbollah-is feeling its oats. In part its aim is to intimidate the rest of us, in part it is merely enjoying flexing its muscles. It believes that its side has defeated America in Iraq, and Israel in Gaza and Lebanon. Mr. Ahmadinejad recently claimed that the West has already begun to "surrender," and he gloated that "final victory. . . is near." It is this bravado that bodes war.
A large portion of modern wars erupted because aggressive tyrannies believed that their democratic opponents were soft and weak. Often democracies have fed such beliefs by their own flaccid behavior. Hitler's contempt for America, stoked by
the policy of appeasement, is a familiar story. But there are many others. North Korea invaded South Korea after Secretary of State Dean Acheson declared that Korea lay beyond our "defense perimeter." Saddam Hussein invaded Kuwait after our ambassador assured him that America does not intervene in quarrels among Arabs. Imperial Germany launched World War I, encouraged by Great Britain's open reluctance
to get involved. Nasser brought on the 1967 Six Day War, thinking that he could extort some concessions from Israel by rattling his sword.
Democracies, it is now well established, do not go to war with each other. But they often get into wars with non-democracies. Overwhelmingly the non-democracy starts the war; nonetheless, in the vast majority of cases, it is the democratic side that wins. In other words, dictators consistently underestimate the strength of democracies, and democracies provoke war through their love of peace, which the
dictators mistake for weakness.
Today, this same dynamic is creating a moment of great danger. The radicals
are becoming reckless, asserting themselves for little reason beyond the
conviction that they can. They are very likely to overreach. It is not hard to
imagine scenarios in which a single match-say a terrible terror attack from Gaza-could ignite a chain reaction. Israel could handle Hamas, Hezbollab
and Syria, albeit with painful losses all around, but if Iran intervened rather
than see its regional assets eliminated, could the U.S. stay out?
With the Bush administration's policies having failed to pacify Iraq, it is
natural that the public has lost patience and that the opposition party is
hurling brickbats. But the demands of congressional Democrats that we throw in the towel in Iraq, their attempts to, constrain the president's freedom to destroy Iran's nuclear weapons program, the proposal of the Baker-Hamilton commission that we
appeal to Iran to help extricate us from Iraq-all of these may be read by the
radicals as signs of our imminent collapse. In the name of peace, they are
hastening the advent of the next war.
Mr. Muravchik is a resident scholar
at the American Enterprise Institute.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
---
WINDS of WAR
By Joshua Muravchik
Several conflicts of various intensities are raging in the Middle East. But a bigger war, involving more states-Israel, Lebanon, Syria, Iran, the Palestinian Authority and perhaps the United States and others is growing more likely everyday, beckoned by the sense that America and Israel are in retreat and that radical Islam is ascending.
Consider the pell-mell events of recent weeks. Iran imprisons four Americans on absurd charges only weeks after seizing 15 British sailors on the high seas. Iran's Revolutionary Guard is caught delivering weapons to the Taliban and explosives to Iraqi terrorists. A car bomb in Lebanon is used to assassinate parliament member Walid Eido, killing nine others and wounding 11 more. At the same time, Fatah al-Islam, a shady group linked to Syria, launches an attack on the Lebanese army from within a Palestinian refugee area, beheading several soldiers. Tehran trumpets further progress on nuclear enrichment as President Mahmoud Ahmadinejad repeats his call for annihilating Israel, crowing that "the countdown to the destruction of this regime has begun."Hamas seizes control militarily in Gaza. Katyusha rockets are
launched from Lebanon into northern Israel for the first time since the end of last summer's Israel-Hezbollah war.
Two important inferences can be distilled from this list. One is that the Tehran regime takes its slogan, "death to America,"quite seriously,even if we do not. It is arming the Taliban, with which it was at sword's point when the Taliban were in power.
Dictatorships
start wars
by underestimating
democracies. Events
in the Middle East
suggest Iran is
making that mistake.
It seems to be supplying explosives not only to Shiite, but also Sunni terrorists in Iraq. It reportedly is sheltering high-level al Qaeda figures despite the Sunni-Shiite divide. All of these surprising actions are for the sake of bleeding the U.S.
However hateful this behavior may be to us, it has a certain strategic logic: "The enemy of my enemy is my friend." What is even more worrisome about the events enumerated above is that most of them are devoid of any such strategic logic. For example,the Hamas "putsch" in Gaza-as Marwan Barghouti, the hero of the Palestinian
intifada, labeled it from his prison cell-was an enormous blunder.
Hamas already mostly controlled Gaza. It is hard to imagine what gains it can reap from its "victory." But it is easy to see the losses. Fatah, and the government of its leader Mahmoud Abbas, will be able to restore their strength in the West Bank with the eager assistance of virtually the whole outside world, while Gaza will be shut off and denied outside aid far more strictly than during the past year. Israel
will retaliate against shelling with a freer hand. Egypt will tighten its border.
And Hamas has in one swoop negated its own supreme achievement, namely winning a majority in Palestine's 2006 parliamentary elections. Until now,Hamas had a powerful argument: how can the West demand democracy and then boycott the winners?
But now it is Hamas itself that has destroyed Palestinian democracy by staging an armed coup. Its democratic credentials have gone up in the smoke of its own arson.
Syria's actions in Lebanon scarcely make moresense. The murder of parliamentarian
Eido will solidify and energize the majority that opposes Syria. Some suppose that, having now bumped off two Lebanese MPs (Pierre Gemayel was the other one), Syria
plans to shave away the anti-Syrian majority in Lebanon's parliament by committing
another five murders. But if so, this is a crazy gambit. Such a campaign would invite international intervention. It might well fracture the pro-Syrian forces: More Shiites will abandon Hezbollah and more Maronites will turn against Hezbollah's cat's-paw, Michel Aoun. And the murders might be for naught anyway: By-elections are
already being planned that are likely to replace the martyred legislators with
others of the same mind.As for the attack on the Lebanese army, Fatah aI-Islam is on the brink of being crushed, leaving behind only more hatred of Syria and a better-armed, more confident Lebanese army.
As for Iran's actions, while arming the Taliban and Iraqi terrorists may make sense, what is the point of seizing British sailors or locking up the four Iranian-Americans, including the beloved 67 year-old scholar, Haleh Esfandieri, none of whom are involved even in political activity, much less in the exercise of hard power?
The apparent meaning of all of this pointless provocation and bullying is that the ails of radicals-Iran, Syria, Hamas and Hezbollah-is feeling its oats. In part its aim is to intimidate the rest of us, in part it is merely enjoying flexing its muscles. It believes that its side has defeated America in Iraq, and Israel in Gaza and Lebanon. Mr. Ahmadinejad recently claimed that the West has already begun to "surrender," and he gloated that "final victory. . . is near." It is this bravado that bodes war.
A large portion of modern wars erupted because aggressive tyrannies believed that their democratic opponents were soft and weak. Often democracies have fed such beliefs by their own flaccid behavior. Hitler's contempt for America, stoked by
the policy of appeasement, is a familiar story. But there are many others. North Korea invaded South Korea after Secretary of State Dean Acheson declared that Korea lay beyond our "defense perimeter." Saddam Hussein invaded Kuwait after our ambassador assured him that America does not intervene in quarrels among Arabs. Imperial Germany launched World War I, encouraged by Great Britain's open reluctance
to get involved. Nasser brought on the 1967 Six Day War, thinking that he could extort some concessions from Israel by rattling his sword.
Democracies, it is now well established, do not go to war with each other. But they often get into wars with non-democracies. Overwhelmingly the non-democracy starts the war; nonetheless, in the vast majority of cases, it is the democratic side that wins. In other words, dictators consistently underestimate the strength of democracies, and democracies provoke war through their love of peace, which the
dictators mistake for weakness.
Today, this same dynamic is creating a moment of great danger. The radicals
are becoming reckless, asserting themselves for little reason beyond the
conviction that they can. They are very likely to overreach. It is not hard to
imagine scenarios in which a single match-say a terrible terror attack from Gaza-could ignite a chain reaction. Israel could handle Hamas, Hezbollab
and Syria, albeit with painful losses all around, but if Iran intervened rather
than see its regional assets eliminated, could the U.S. stay out?
With the Bush administration's policies having failed to pacify Iraq, it is
natural that the public has lost patience and that the opposition party is
hurling brickbats. But the demands of congressional Democrats that we throw in the towel in Iraq, their attempts to, constrain the president's freedom to destroy Iran's nuclear weapons program, the proposal of the Baker-Hamilton commission that we
appeal to Iran to help extricate us from Iraq-all of these may be read by the
radicals as signs of our imminent collapse. In the name of peace, they are
hastening the advent of the next war.
Mr. Muravchik is a resident scholar
at the American Enterprise Institute.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
---
Saturday, June 23, 2007
Understanding the ROTH IRA
The ROTH IRA is a retirement product which allows the withdrawal of tax free income from a tax deferred account, and it is a fantastic savings vehicle for people of any age, but particularly for younger people. Congress created The Roth IRA on January 1, 1998 as a result of the Taxpayer Relief Act of 1997. It's named after the late Senator William V. Roth, Jr. The Roth IRA is different from the Traditional IRA because it provides no deduction for contributions, but if you meet certain requirements, all earnings are tax free when you or your beneficiary withdraw them, whereas with the Traditional IRA taxes would be due upon withdrawal. Some other benefits of the ROTH IRA are no early distribution penalty on certain withdrawals, and there is no requirement to take minimum distributions after age 70½.
While the decision to use a ROTH IRA is based on several factors, the presence of a retirement plan in the workplace is one of the major reasons for utilizing a ROTH IRA. If you still have the ability to save, after committing the maximum contribution to your 401k plan, then the ROTH IRA makes sense, because you are limited in the tax deductibility of contributions to a Traditional IRA, if you have a workplace pension plan or 401k. For people who have no workplace retirement plan, the bottom line is that most people are better off with the Roth IRA. The reason is that the dollar amount in Roth IRA is effectively larger than a Traditional IRA because it holds after-tax dollars. If you can take advantage of this feature of the Roth IRA by maximizing your contributions you'll add greater tax leverage to your retirement savings.
There are two ways to establish a Roth IRA either by making a regular contribution to a Roth IRA or by converting a traditional IRA to a Roth IRA. As mentioned before, contributions can be made to a Roth IRA even if you participate in a workplace retirement plan. These contributions can be as much as $4,000 for 2007 with a $1,000 catchup for those 50 and older. There are just two requirements for contributing to the ROTH IRA. First, you or your spouse must have compensation or alimony income equal to the amount contributed. Secondly, your modified adjusted gross income can't exceed certain limits. For the maximum contribution, the limits are $99,000 for single individuals and $156,000 for married couples filing joint returns. The amount you can contribute is reduced gradually and then completely eliminated when your modified adjusted gross income exceeds $114,000 for single individuals or $166,000 for married couples filing jointly. These dollar amounts apply through 2007. You can convert your regular IRA to a Roth IRA if your modified adjusted gross income is $100,000 or less, and if you're single or file jointly with your spouse. You'll have to pay tax in the year of the conversion, but for many people the long-term savings is preferrable to consequesnces of the tax incurred.
Distributions from Roth IRAs are tax-free until you've withdrawn all your regular contributions. After that you'll withdraw your conversion contributions, if any. Special rules apply when you withdraw your conversion contributions. When you've withdrawn all your regular and conversion contributions, any subsequent withdrawals come from earnings. The withdrawals are tax-free if you're over age 59½ and at least five years have expired since you established your Roth IRA. Otherwise, with a few exceptions, they're taxable and potentially subject to the early withdrawal penalty.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
While the decision to use a ROTH IRA is based on several factors, the presence of a retirement plan in the workplace is one of the major reasons for utilizing a ROTH IRA. If you still have the ability to save, after committing the maximum contribution to your 401k plan, then the ROTH IRA makes sense, because you are limited in the tax deductibility of contributions to a Traditional IRA, if you have a workplace pension plan or 401k. For people who have no workplace retirement plan, the bottom line is that most people are better off with the Roth IRA. The reason is that the dollar amount in Roth IRA is effectively larger than a Traditional IRA because it holds after-tax dollars. If you can take advantage of this feature of the Roth IRA by maximizing your contributions you'll add greater tax leverage to your retirement savings.
There are two ways to establish a Roth IRA either by making a regular contribution to a Roth IRA or by converting a traditional IRA to a Roth IRA. As mentioned before, contributions can be made to a Roth IRA even if you participate in a workplace retirement plan. These contributions can be as much as $4,000 for 2007 with a $1,000 catchup for those 50 and older. There are just two requirements for contributing to the ROTH IRA. First, you or your spouse must have compensation or alimony income equal to the amount contributed. Secondly, your modified adjusted gross income can't exceed certain limits. For the maximum contribution, the limits are $99,000 for single individuals and $156,000 for married couples filing joint returns. The amount you can contribute is reduced gradually and then completely eliminated when your modified adjusted gross income exceeds $114,000 for single individuals or $166,000 for married couples filing jointly. These dollar amounts apply through 2007. You can convert your regular IRA to a Roth IRA if your modified adjusted gross income is $100,000 or less, and if you're single or file jointly with your spouse. You'll have to pay tax in the year of the conversion, but for many people the long-term savings is preferrable to consequesnces of the tax incurred.
Distributions from Roth IRAs are tax-free until you've withdrawn all your regular contributions. After that you'll withdraw your conversion contributions, if any. Special rules apply when you withdraw your conversion contributions. When you've withdrawn all your regular and conversion contributions, any subsequent withdrawals come from earnings. The withdrawals are tax-free if you're over age 59½ and at least five years have expired since you established your Roth IRA. Otherwise, with a few exceptions, they're taxable and potentially subject to the early withdrawal penalty.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Monday, June 18, 2007
Summer Solstice Heats Things Up!
Among other items of interest, such as the Commerce Department's release of data on housing starts and the Labor Department's disclosure of data on weekly jobless claims, this Thursday will be the longest day of the year as the summer solstice marks the official start of summer. Right on target, the temperatures here in the east are set to reach into the 90's, providing a scorching beginning to this festive season. With the core inflation reports of last week being somewhat benign, after stripping out the highly volatile food and energy prices, the market ended the week with a bang and could be poised, like the mercury, to creep up further this week.
Overall, the most recent economic reports seem to be verifying the renewed strength of the economy after the mid cycle slowdown, which we've discussed previously. With bond yields surpassing the 5.25% mark briefly last week, bond investors have realized the next move by the Fed on interest rates may be an increase, although my personal belief is that until the depth of the housing slump and subprime mortgage debacle is determined, the Fed will be on hold. Once again, the yield curve is sloping in a positive direction, which bodes well for economic strengh. Perhaps the inversion of the yield curve for part of 2006 was merely indicating the mid cycle slowdown that occurred, and not predicting recession!
So as you mark the summer solstice with whatever ritual suits your tastes, remember the economy and the markets have some upside potential left, even if we do begin to see some increased volatility going forward. I can't say this enough, but it bears repeating, that the markets are not predictable on any given day, and rarely go up without retreating. This ebb and flow of stock prices is what keeps things interesting and allows the supply and demand of stocks to be reset as the psychological drama among investors unfolds. Happy First Day of Summer 2007!
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Overall, the most recent economic reports seem to be verifying the renewed strength of the economy after the mid cycle slowdown, which we've discussed previously. With bond yields surpassing the 5.25% mark briefly last week, bond investors have realized the next move by the Fed on interest rates may be an increase, although my personal belief is that until the depth of the housing slump and subprime mortgage debacle is determined, the Fed will be on hold. Once again, the yield curve is sloping in a positive direction, which bodes well for economic strengh. Perhaps the inversion of the yield curve for part of 2006 was merely indicating the mid cycle slowdown that occurred, and not predicting recession!
So as you mark the summer solstice with whatever ritual suits your tastes, remember the economy and the markets have some upside potential left, even if we do begin to see some increased volatility going forward. I can't say this enough, but it bears repeating, that the markets are not predictable on any given day, and rarely go up without retreating. This ebb and flow of stock prices is what keeps things interesting and allows the supply and demand of stocks to be reset as the psychological drama among investors unfolds. Happy First Day of Summer 2007!
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Friday, June 8, 2007
Before the Onslaught
Every now and then there comes a time to diverge from my central theme of investment information and divulge facets from other aspects of my life, as well as other interests and passions. With the first full week of June nearly complete and temperatures soaring into the 90's here in sunny Cape May County, I am looking forward to one of the perks of living in a tourist area before the tourists show up inforce.
Most schools still have at least one more week, and so our beaches don't really get crowded until after the 15th of June. Therefore, it is the perfect time for me to enjoy a leisurely stroll along the water's edge today, perhaps in Stone Harbor, and a few hours of reading on the beach tomorrow in Ocean City. It is rather nice to be able to choose a different town and beach on any given day, because they are all so unique and variety is the spice of life. If I have the urge for a great meal and drink, the Washington Inn or Virginia Hotel provide the perfect locale for a romantic dinner in Victorian Cape May. The porch at the Virginia Hotel is a superb spot for sipping mojitos while absorbing the ambiance of the Victorian bed and breakfast hotels which line the festive streets.
It is the little pleasures that keep me plodding along through this adventure we call life, replete with its successes, failures, joys, tradegies and fun. My daily schedule, as intense as it sometimes can be, is punctuated by these delights which I relish ocassionally. The best part of my routine is that it is really not a routine at all, but rather a series interconnected events which ebb and flow with the seasons. The summer season is about to come into full bloom and my schedule will be changing along with the floral landscape.
In life I wear several hats which have a bit of a convergence. My role as guidance counselor is about to end for the current school year, which provides more time for me to spend visiting, calling and satisfying my investment advisory clients as well as the opportunity to enhance my online businesses. It's all about providing insights, information and guidance, so my routine just changes. Luckily this occurs at the right time, because the gardens at my home require my constant attention and care. I've been particularly delighted this spring by the array of color provided by the azaleas, rhododendrons and now mountain laurel which populate my property. As my dogs and I traverse the trails which wind through my yard and the National Wildlife Preserve on the eastern border of my property the fragrance of the mountain laurel is truly intoxicating.
So as the markets gyrate a bit this week, the only numbers which have any real meaning, in my opinion at this juncture, would be a DJIA close of 12,308 and a S&P 500 close of 1,385 because these closing levels would represent a 10% correction from the highs set this spring. Even a drop to these levels would not be an indication of trouble in the markets, but merely a healthy retraction, a little ebb and flow, so to speak.
Thank God it is Friday and the weekend is finally upon us, especially as many of us swelter today in the oppressive heat and humidity descending on the eastern seaboard. To anyone who reads this, get out and smell the roses, soak up the sunshine, don't overreact to the market news you'll hear this week and come visit South Jersey when the schools close. To the locals, we better get out there and enjoy today and early tomorrow, because the onslaught is about to begin! Did I hear rum runner, marguerita, mojito or a nice cabernet sauvignon?
John Kaighn
If you are interested in free information about Investments, Business, Marketing or Online Opportunities, visit my websites at:
http://johnkaighn.com
http://jerseybenefits.com
Most schools still have at least one more week, and so our beaches don't really get crowded until after the 15th of June. Therefore, it is the perfect time for me to enjoy a leisurely stroll along the water's edge today, perhaps in Stone Harbor, and a few hours of reading on the beach tomorrow in Ocean City. It is rather nice to be able to choose a different town and beach on any given day, because they are all so unique and variety is the spice of life. If I have the urge for a great meal and drink, the Washington Inn or Virginia Hotel provide the perfect locale for a romantic dinner in Victorian Cape May. The porch at the Virginia Hotel is a superb spot for sipping mojitos while absorbing the ambiance of the Victorian bed and breakfast hotels which line the festive streets.
It is the little pleasures that keep me plodding along through this adventure we call life, replete with its successes, failures, joys, tradegies and fun. My daily schedule, as intense as it sometimes can be, is punctuated by these delights which I relish ocassionally. The best part of my routine is that it is really not a routine at all, but rather a series interconnected events which ebb and flow with the seasons. The summer season is about to come into full bloom and my schedule will be changing along with the floral landscape.
In life I wear several hats which have a bit of a convergence. My role as guidance counselor is about to end for the current school year, which provides more time for me to spend visiting, calling and satisfying my investment advisory clients as well as the opportunity to enhance my online businesses. It's all about providing insights, information and guidance, so my routine just changes. Luckily this occurs at the right time, because the gardens at my home require my constant attention and care. I've been particularly delighted this spring by the array of color provided by the azaleas, rhododendrons and now mountain laurel which populate my property. As my dogs and I traverse the trails which wind through my yard and the National Wildlife Preserve on the eastern border of my property the fragrance of the mountain laurel is truly intoxicating.
So as the markets gyrate a bit this week, the only numbers which have any real meaning, in my opinion at this juncture, would be a DJIA close of 12,308 and a S&P 500 close of 1,385 because these closing levels would represent a 10% correction from the highs set this spring. Even a drop to these levels would not be an indication of trouble in the markets, but merely a healthy retraction, a little ebb and flow, so to speak.
Thank God it is Friday and the weekend is finally upon us, especially as many of us swelter today in the oppressive heat and humidity descending on the eastern seaboard. To anyone who reads this, get out and smell the roses, soak up the sunshine, don't overreact to the market news you'll hear this week and come visit South Jersey when the schools close. To the locals, we better get out there and enjoy today and early tomorrow, because the onslaught is about to begin! Did I hear rum runner, marguerita, mojito or a nice cabernet sauvignon?
John Kaighn
If you are interested in free information about Investments, Business, Marketing or Online Opportunities, visit my websites at:
http://johnkaighn.com
http://jerseybenefits.com
Thursday, June 7, 2007
Markets Release Some Steam
We have been experiencing a bit of a sell off in the markets over the last few sessions. If you remember, I made a statement here recently that it wouldn't surprise me to see the S&P 500, and the markets in general, have a bit of a sell off, after the S&P broke the old record set in 2000. As you know it did break the record, and now the sell off has begun.
We have had some sizeable gains in the market this year, and as you know, the market usually never moves in a straight line up or down. Whether this is the long awaited correction, which is defined as a 10% drop, or just a pause, remains to be seen. Traders will be heading for the exits, as investors begin to hunker down and absorb the blows to their portfolios. For long term investors, diversification and dollar cost averaging should help you weather the current storm and add to positions at a discounted price. I do not think this is the beginning of a bear market, as the economy has been exhibiting signs of increased strength recently.
Have a great day and stay tuned for other helpful bulletins to keep you aware of investment, economic and market news!
John Kaighn
For more information on the markets, business marketing or online opportunities, visit my websites at
http://johnkaighn
http://jerseybenefits.com
We have had some sizeable gains in the market this year, and as you know, the market usually never moves in a straight line up or down. Whether this is the long awaited correction, which is defined as a 10% drop, or just a pause, remains to be seen. Traders will be heading for the exits, as investors begin to hunker down and absorb the blows to their portfolios. For long term investors, diversification and dollar cost averaging should help you weather the current storm and add to positions at a discounted price. I do not think this is the beginning of a bear market, as the economy has been exhibiting signs of increased strength recently.
Have a great day and stay tuned for other helpful bulletins to keep you aware of investment, economic and market news!
John Kaighn
For more information on the markets, business marketing or online opportunities, visit my websites at
http://johnkaighn
http://jerseybenefits.com
Wednesday, June 6, 2007
Email Marketing Essentials
If you want an email campaign to succeed, you don`t want to
offend anyone when sending your messages. Turn off a
consumer with your email and you can be sure they`ll
tune out your message. Don`t let this happen to you!
A message that earns respect makes sales. That`s why I will
begin with the topic of email etiquette. Train yourself
to always stick to the rules below when crafting your email
message to potential customers.
=> RULE #1 - ALWAYS WRAP YOUR LINES AT 65
CHARACTERS OR LESS
Whenever you write an email, always format the lines so that
they`re 65 characters, or less, across. To do this, you may
need to do a "hard return" by hitting "Enter" at the end of
the line.
Wondering why to limit your lines to just 65 characters?
(Good question! It shows you`re thinking.) There are two
reasons that "less is more":
-- The first thing to remember is that looking at a computer
screen for a long time causes EYE FATIGUE for many readers.
The shorter span of characters across the screen makes
reading easier and more appealing to the recipient of your
email message.
-- The other reason to go short instead of long is this:
some email clients AUTOMATICALLY ENFORCE LINE-WRAPPING
at 60-65 characters on received messages. If your email
is wrapped at 70, the content will arrive all "chopped up."
This makes it unattractive...and worse -- unappealing.
-- Tip within a Rule #1: Email clients such as Outlook
Express allow you to SET THE LINE-WRAP to any
character-width you choose. That means you won`t have to
hit Enter each time after typing 65 characters. Makes life
easier!
-- Tip within a Rule #2 - You can type 65 asterisks or
dashes in a Notepad file to create a template. Then paste
your email below it to see if any lines extend too far to
the right.
=> RULE # 2 - BE CAREFUL USING ALL CAPS
How many times have you changed the TV channel to avoid
listening to a screaming car salesperson? No one likes a
screaming salesperson...and no one likes a "screaming" email
message, either. Odds are, when someone has over-amped the
volume of their message by using too many capital letters
(not to mention too many exclamation points and other
punctuation) - you`re going to be turned off.
On the Internet, email messages written in all caps are
considered yelling. It`s okay to write some sentences and
some words in all caps, but don`t go overboard. (As you can
see in this message, I`ve tried to use capital letters to
help break up sections of the content from time to time)
-- Tip within a Rule: Consumers buy from a source they
trust. Emails in all caps are perceived as "shady" or
uneducated, and have an appearance that damages the
credibility of an offer.
=> RULE #3 - WATCH YOUR Ps & Qs (Spelling and Grammar)
Would you be influenced by an email selling you something
that had noticeable spelling and grammar mistakes? Sure you
would...and the influence would be negative, not positive!
When a consumer reads a sales message that`s filled with
errors, they think to themselves, "Good grief, this person
doesn`t even take the time to get his emails right. His
product is probably the same quality as his emails."
When you`re in business, YOUR IMAGE IS YOUR REPUTATION
and your reputation is the reason people buy from you or the
guy down the block. It`s essential that you create an image
of INTEGRITY, CREDIBILITY, and HONESTY in the mind
of your prospects. Sending emails filled with errors doesn`t
hurt your professional image...it destroys it. (Ouch!)
John Kaighn
Jersey Benefits Advisors
The Kaighn Report
offend anyone when sending your messages. Turn off a
consumer with your email and you can be sure they`ll
tune out your message. Don`t let this happen to you!
A message that earns respect makes sales. That`s why I will
begin with the topic of email etiquette. Train yourself
to always stick to the rules below when crafting your email
message to potential customers.
=> RULE #1 - ALWAYS WRAP YOUR LINES AT 65
CHARACTERS OR LESS
Whenever you write an email, always format the lines so that
they`re 65 characters, or less, across. To do this, you may
need to do a "hard return" by hitting "Enter" at the end of
the line.
Wondering why to limit your lines to just 65 characters?
(Good question! It shows you`re thinking.) There are two
reasons that "less is more":
-- The first thing to remember is that looking at a computer
screen for a long time causes EYE FATIGUE for many readers.
The shorter span of characters across the screen makes
reading easier and more appealing to the recipient of your
email message.
-- The other reason to go short instead of long is this:
some email clients AUTOMATICALLY ENFORCE LINE-WRAPPING
at 60-65 characters on received messages. If your email
is wrapped at 70, the content will arrive all "chopped up."
This makes it unattractive...and worse -- unappealing.
-- Tip within a Rule #1: Email clients such as Outlook
Express allow you to SET THE LINE-WRAP to any
character-width you choose. That means you won`t have to
hit Enter each time after typing 65 characters. Makes life
easier!
-- Tip within a Rule #2 - You can type 65 asterisks or
dashes in a Notepad file to create a template. Then paste
your email below it to see if any lines extend too far to
the right.
=> RULE # 2 - BE CAREFUL USING ALL CAPS
How many times have you changed the TV channel to avoid
listening to a screaming car salesperson? No one likes a
screaming salesperson...and no one likes a "screaming" email
message, either. Odds are, when someone has over-amped the
volume of their message by using too many capital letters
(not to mention too many exclamation points and other
punctuation) - you`re going to be turned off.
On the Internet, email messages written in all caps are
considered yelling. It`s okay to write some sentences and
some words in all caps, but don`t go overboard. (As you can
see in this message, I`ve tried to use capital letters to
help break up sections of the content from time to time)
-- Tip within a Rule: Consumers buy from a source they
trust. Emails in all caps are perceived as "shady" or
uneducated, and have an appearance that damages the
credibility of an offer.
=> RULE #3 - WATCH YOUR Ps & Qs (Spelling and Grammar)
Would you be influenced by an email selling you something
that had noticeable spelling and grammar mistakes? Sure you
would...and the influence would be negative, not positive!
When a consumer reads a sales message that`s filled with
errors, they think to themselves, "Good grief, this person
doesn`t even take the time to get his emails right. His
product is probably the same quality as his emails."
When you`re in business, YOUR IMAGE IS YOUR REPUTATION
and your reputation is the reason people buy from you or the
guy down the block. It`s essential that you create an image
of INTEGRITY, CREDIBILITY, and HONESTY in the mind
of your prospects. Sending emails filled with errors doesn`t
hurt your professional image...it destroys it. (Ouch!)
John Kaighn
Jersey Benefits Advisors
The Kaighn Report
Monday, June 4, 2007
Reassurance or Foreboding?
As we begin the first full week of June, many investors should be asking themselves the same questions Michael Santoli asked in Barrons this week, which are "after a biblical seven years of wandering, the Standard and Poor's last week finally surmounted its former all-time closing high, set near the apex of the market bubble in 2000. Is this a moment to celebrate or lament, a sign of reassurance or foreboding?"
These are very good questions, indeed, because one can never be sure of the direction of the market, but higher highs are usually the sign of a bull market having the strength to continue the upward trend. However, in the short term there could be some gyrations on the way to the next record, because in a bull market one must also witness higher lows! Don't get too caught up in the various news reports you'll hear, but rather continue with your investment plan in order to reach YOUR goals.
I've reprinted an article from my newsletter written in the first quarter of 2005 that spoke of concerns about speculation in the housing market and how to cope with it, especialy if you needed to buy a home. I sure hope we don't enter another era of speculation in the stock markets again, but then, who would have thought we could create a bubble in housing, so soon after the 2000 stock market bubble? One point I must make is that even though bubbles were created, much REAL WEALTH was also created in the 2000 stock market bubble and the recent housing bubble, depending on when and what you bought. A true advertisement for the warning, "Buyer Beware".
Speculation and the Housing Market in 2005
When Greenspan finishes his term as Fed chief, I am one person who surely will miss his succinct use of language to make a point. The use of the term “irrational exuberance” to explain the dotcom bubble, in hindsight, was right on the money. In discussing the current housing boom, he has used the word “froth” to discuss the “relatively exotic mortgages which are of particular concern”. While there are no predictions of a dotcom era style bust in real estate, the fact that 20% of new mortgages in 2005 are “interest-only”, up from 5% in 2003 is the froth of which Greenspan speaks. Consider a 10% drop in home prices for a moment. With a 10% down payment and an “interest-only” ARM, all equity in the home evaporates, and monthly payments eventually will rise with no principal reduction, because interest rates are rising. Does this sound just a bit frothy or even speculative?
The point is to always remember the cyclical nature of the economy, the stock market, the housing market and life in general. In the economic cycle, we are in the middle of the expansion phase, and within this phase, there are ups and downs. The market will rise and fall during this part of the cycle, but the trajectory should be positive if you think long-term. Housing has been in a boom, since the dotcom bust and could very well be near the top. If you need a house, because it will be your home, shop wisely. If you are looking at real estate as an investment at this juncture, perhaps you could wind up in a situation like the above mentioned scenario.
Here are some facts to consider if you are concerned about the housing market. According to Business Week, “today’s housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra low rates of a weak economy. Either the economy’s long-term prospects will get worse, or rates will rise. In either scenario, housing will weaken.” We’re already seeing interest rates rise, so “perhaps housing is entering a more sober period when it won’t be the prime generator of growth.” Overall, the feeling is the housing sector will cool off, and areas with more speculative markets will see more depreciation in home values than those which had a more modest increase over the last three years. This has happened before, and it will happen again. This is no new paradigm, it is just “the cycle”.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
These are very good questions, indeed, because one can never be sure of the direction of the market, but higher highs are usually the sign of a bull market having the strength to continue the upward trend. However, in the short term there could be some gyrations on the way to the next record, because in a bull market one must also witness higher lows! Don't get too caught up in the various news reports you'll hear, but rather continue with your investment plan in order to reach YOUR goals.
I've reprinted an article from my newsletter written in the first quarter of 2005 that spoke of concerns about speculation in the housing market and how to cope with it, especialy if you needed to buy a home. I sure hope we don't enter another era of speculation in the stock markets again, but then, who would have thought we could create a bubble in housing, so soon after the 2000 stock market bubble? One point I must make is that even though bubbles were created, much REAL WEALTH was also created in the 2000 stock market bubble and the recent housing bubble, depending on when and what you bought. A true advertisement for the warning, "Buyer Beware".
Speculation and the Housing Market in 2005
When Greenspan finishes his term as Fed chief, I am one person who surely will miss his succinct use of language to make a point. The use of the term “irrational exuberance” to explain the dotcom bubble, in hindsight, was right on the money. In discussing the current housing boom, he has used the word “froth” to discuss the “relatively exotic mortgages which are of particular concern”. While there are no predictions of a dotcom era style bust in real estate, the fact that 20% of new mortgages in 2005 are “interest-only”, up from 5% in 2003 is the froth of which Greenspan speaks. Consider a 10% drop in home prices for a moment. With a 10% down payment and an “interest-only” ARM, all equity in the home evaporates, and monthly payments eventually will rise with no principal reduction, because interest rates are rising. Does this sound just a bit frothy or even speculative?
The point is to always remember the cyclical nature of the economy, the stock market, the housing market and life in general. In the economic cycle, we are in the middle of the expansion phase, and within this phase, there are ups and downs. The market will rise and fall during this part of the cycle, but the trajectory should be positive if you think long-term. Housing has been in a boom, since the dotcom bust and could very well be near the top. If you need a house, because it will be your home, shop wisely. If you are looking at real estate as an investment at this juncture, perhaps you could wind up in a situation like the above mentioned scenario.
Here are some facts to consider if you are concerned about the housing market. According to Business Week, “today’s housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra low rates of a weak economy. Either the economy’s long-term prospects will get worse, or rates will rise. In either scenario, housing will weaken.” We’re already seeing interest rates rise, so “perhaps housing is entering a more sober period when it won’t be the prime generator of growth.” Overall, the feeling is the housing sector will cool off, and areas with more speculative markets will see more depreciation in home values than those which had a more modest increase over the last three years. This has happened before, and it will happen again. This is no new paradigm, it is just “the cycle”.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Wednesday, May 30, 2007
China Hiccups
The US markets opened lower today, as investors digested the overnight news from China. Stocks in China were down sharply on Wednesday because the government raised a tax on stock trades. The reason for this tax increase is an attempt to dampen some of the enthusiasm for stocks, due to a market boom. There are growing concerns about a possible bubble.
The main Shanghai Composite Index dropped 6.5 percent to 4,071.27 after hitting a record high on Tuesday. The Shenzhen Composite Index for China's smaller secondary market closed at 1,199.45 a decline of 7.2 percent. The market plunge came on the heels of an announcement by the Finance Ministry that tripled the "stamp tax" on stock trades from 0.1 percent to 0.3 percent. The change was effective Wednesday, as the the official Xinhua News Agency reported the ministry was trying to "cool the stock market".
The last time stocks plunged in China, which was February of this year, emerging markets took it on the chin. Stocks in the US and other mature markets also swooned as investors reacted to the news. Anytime you have a precipitous drop in a major market, there are bound to be ripple effects in all of the world's markets. One thing to remember is the fact that the markets do not move in a straight line, so after a period of increasing share prices, one has to expect a decline sooner or later. Hopefully, this will not be a correction that reclaims all of the gains made this year, but it is a distinct possibility. If you have a few dollars sitting on the sidelines, this may present an opportunity to buy shares at a lower cost. For those of you who continually dollar cost average, you will automatically reap the benefits of any sale on shares.
Later in the day, the US markets responded to the release of the FOMC minutes, as the S&P 500 index advanced to its first record close in more than seven years ending at 1,530.23. Investors concluded from the Fed report the evidence of a cooling economy might be a reason for the Federal Reserve to begin cutting interest rates in the second half of the year. The DJIA also closed in record territory at 13,633.08 as the markets shrugged off the news from China. Sometimes you just never know how the market will react to news, which is why I always recommend not letting emotion rule your investment decisions.
For More Information on Investments and Business Information and Opportunities, visit my websites:
http://jerseybenefits.com
http://johnkaighn.com
The main Shanghai Composite Index dropped 6.5 percent to 4,071.27 after hitting a record high on Tuesday. The Shenzhen Composite Index for China's smaller secondary market closed at 1,199.45 a decline of 7.2 percent. The market plunge came on the heels of an announcement by the Finance Ministry that tripled the "stamp tax" on stock trades from 0.1 percent to 0.3 percent. The change was effective Wednesday, as the the official Xinhua News Agency reported the ministry was trying to "cool the stock market".
The last time stocks plunged in China, which was February of this year, emerging markets took it on the chin. Stocks in the US and other mature markets also swooned as investors reacted to the news. Anytime you have a precipitous drop in a major market, there are bound to be ripple effects in all of the world's markets. One thing to remember is the fact that the markets do not move in a straight line, so after a period of increasing share prices, one has to expect a decline sooner or later. Hopefully, this will not be a correction that reclaims all of the gains made this year, but it is a distinct possibility. If you have a few dollars sitting on the sidelines, this may present an opportunity to buy shares at a lower cost. For those of you who continually dollar cost average, you will automatically reap the benefits of any sale on shares.
Later in the day, the US markets responded to the release of the FOMC minutes, as the S&P 500 index advanced to its first record close in more than seven years ending at 1,530.23. Investors concluded from the Fed report the evidence of a cooling economy might be a reason for the Federal Reserve to begin cutting interest rates in the second half of the year. The DJIA also closed in record territory at 13,633.08 as the markets shrugged off the news from China. Sometimes you just never know how the market will react to news, which is why I always recommend not letting emotion rule your investment decisions.
For More Information on Investments and Business Information and Opportunities, visit my websites:
http://jerseybenefits.com
http://johnkaighn.com
Friday, May 25, 2007
Remember the Point of the Holiday
A friend emailed me and commented that I write a lot about the markets and investments, but wanted to know if I had any other interests. So for anyone who might be interested, I love the beach, especially reading while relaxing. I'm also into boating and gardening, as well as walking and doing my daily workout. Well, that's enough about me! I hope you all have a great Memorial Day holiday, and if you are down here in South Jersey, enjoy our beaches and boardwalks. Also, take a few minutes during your weekend to remember the reason for the holiday. There are many young men and women in harm's way, and many who have given their lives in defense of this country, throughout its history. Take some time to reflect on their sacrifices, be safe on the highways and have a wonderful weekend.
The S&P 500 still has not broken through the record we've talked about for two weeks now. It made it to within 2 points of 1,527.46 earlier this week, but closed out at 1,515.73 today. The Dow ended the week at 13,507.30 and the NASDAQ closed at 2557.20 ending a lackluser trading week. The markets will be closed on Monday for the Memorial Day Holiday, so with that said, I will signoff until we some more information to digest.
If you are interested in learning about Home Business Ideas and Opportunities, you can complete the form on my profile, or for more information visit:
http://jerseybenefits.com
http://johnkaighn.com
The S&P 500 still has not broken through the record we've talked about for two weeks now. It made it to within 2 points of 1,527.46 earlier this week, but closed out at 1,515.73 today. The Dow ended the week at 13,507.30 and the NASDAQ closed at 2557.20 ending a lackluser trading week. The markets will be closed on Monday for the Memorial Day Holiday, so with that said, I will signoff until we some more information to digest.
If you are interested in learning about Home Business Ideas and Opportunities, you can complete the form on my profile, or for more information visit:
http://jerseybenefits.com
http://johnkaighn.com
Tuesday, May 22, 2007
Amero Paranoia
I've recently read a few blogs that have discussed the creation of a "new currency" called the Amero, which supposedly is being clandestinely prepared to replace the currencies of Mexico, Canada and the United States. Once again the conspiracy theorists and pessimists, who believe America is in decline and the collapse of the dollar imminent, are seizing upon the news of a decline in the dollar as a reason for spreading their paranoia. They cite the rise of China as an economic power, and the trade imbalance we have with them as further evidence to support theories of the collapse of the dollar, even as China prepares to buy $3 billion of stock in Blackstone Group's IPO, in order to diversify their portfolio.
I did a search on the net to find more information about the Amero, and found ONE page of references to it. I've copied the best source I found, which has links to just about all the other articles you can find on the net, for those of you who might be interested in reading just about all there is on the subject. It is always important to find out all you can about a subject, before you report it as fact. My interpretation of the information about the Amero is that we are a long way from any serious discussion about such a currency, and even further away from relinquishing our sovereignity through the actual adoption of it.
The links didn't transfer over to this blog, but if you would like to see the same information with the links included, please go to my blog on myspace: http://blog.myspace.com/jerseybenefits
Here is the information I've researched:
"Sovereignty is not infinitely valuable"
Herb Grubel
These are the words of a Canadian advocate for the creation of a new currency for North American
countries. His theories seem to lead the pack of similar philosophers and economists.
In a foreword for Grubel's study on the prospect, Gordon Gibson characterizes the situation as such:
"Most fundamentally however, Mr. Grubel makes the sensible observation that "sovereignty is not
infinitely valuable." Every nation in the world, even the mighty United States, has traded off
elements of sovereignty to multi-national associations such as the WTO, NAFTA, and the United
Nations. Canada has been in the forefront of encouraging every such development--a natural policy
for a middle power."
For a "middle power" whose economy is weak and exchange rate declining steadily, such a maneuver
may be in the best interest. This is not the case when the strongest economy in the world, the United
States of America, considers diluting its monetary system with Mexico, a third world, "developing" nation
and Canada, a second socialist nation on our two land borders.
Further, U.S. sovereignty is, perhaps, our most precious facet, as defined in our Declaration of
Independence and Constitution. Our sovereignty is part of the formula that makes our Republic the most
unique political and cultural experiment in the history of civilization.
Rather than try to decode, re-describe and publish commentary on the prevailing philosophies and
arguments surrounding the need and advantages for a common hemispheric currency, this site provides
links to information from legitimate proponents and detractors.
Be advised that there is a lot of code and doublespeak in these articles. Few of the more elaborate
articles discuss the disadvantages to the U.S., but concentrate on the advantages to Canada and Mexico.
The most significant and timely aspect of the movement involves current U.S. participation in a
elaborate international program called the "Security and Prosperity Partnership Of North America, "
described elsewhere on this site.
The link-listing method on this site is in development. If you have particular comments or would like to
inform the host of this site as to a link to be reviewed for inclusion in this or any other section of this site,
please visit the "contact" page and inform us by email."
These links reach discussions of the "Amero, " "dollarization" and offer insight to the conditions of the
U.S. dollar, as well as Canadian and Mexican currencies.
The Case for the Amero: The Economics and Politics of a North American Monetary Union
Herbert G. Grubel--Herbert G. Grubel was David Somerville Chair in Taxation and Finance, The Fraser
Institute, and Professor of Economics (Emeritus), Simon Fraser University. He has a B.A. from
Rutgers University and a Ph.D. in economics from Yale University. He has taught full-time at Stanford
University, the University of Chicago, and the University of Pennsylvania; and has had temporary
appointments at universities in Berlin, Singapore, Cape Town, Nairobi, Oxford, and Canberra.
Herbert Grubel was the Reform Party Member of Parliament for Capliano-Howe Sound from 1993 to
1997, serving as the Finance Critic from 1995 to 1997. He has published 16 books and 180
professional articles in economics dealing with international trade and finance and a wide range of
economic policy issues.
The Plan to Replace the Dollar With the 'Amero'
Mr. Corsi is the author of several books, including "Unfit for Command: Swift Boat Veterans Speak
Out Against John Kerry" (along with John O'Neill), "Black Gold Stranglehold: The Myth of Scarcity
and the Politics of Oil" (along with Craig R. Smith), and "Atomic Iran: How the Terrorist Regime
Bought the Bomb and American Politicians." He is a frequent guest on the G. Gordon Liddy radio
show. He will soon co-author a new book with Jim Gilchrist on the Minuteman Project.
American University
The Threat of the Dollar: A case study
Wikipedia:
The online encyclopedia
Queens University, Canada
One of Canada's leading universities, with an international reputation for scholarship, research,
social purpose, spirit and diversity. Consistently ranked among the top universities in Canada,
Queen's is known for its high quality and incomparable 24-hour learning environment. The
University was established by Royal Charter of Queen Victoria in 1841 - twenty-six years before
Canadian confederation. Classes were first held in 1842. The earliest degree-granting institution in
the united Province of Canada, Queen's has reflected and helped shape Canadian values and
policies, educating many of the country's most notable political and cultural figures.
Help.com
Help.com is a network of people dedicated to helping you. Find answers to important questions.
Learn new skills. Achieve personal goals. Get inspired. Fix what’s broken. Build. Create. Solve
problems. Change things. Accomplish stuff that matters.
BankIntroductions.com
BankINTRODUCTIONS.com, is a private research group and banking introductions services
company based in Vancouver, British Columbia, Canada.
Fiscal and Generational Imbalances: An Update Adobe Reader required--get it here, free
A report to the Federal Reserve by Jagadeesh Gokhale and Kent Smetters, August 2005
I did a search on the net to find more information about the Amero, and found ONE page of references to it. I've copied the best source I found, which has links to just about all the other articles you can find on the net, for those of you who might be interested in reading just about all there is on the subject. It is always important to find out all you can about a subject, before you report it as fact. My interpretation of the information about the Amero is that we are a long way from any serious discussion about such a currency, and even further away from relinquishing our sovereignity through the actual adoption of it.
The links didn't transfer over to this blog, but if you would like to see the same information with the links included, please go to my blog on myspace: http://blog.myspace.com/jerseybenefits
Here is the information I've researched:
"Sovereignty is not infinitely valuable"
Herb Grubel
These are the words of a Canadian advocate for the creation of a new currency for North American
countries. His theories seem to lead the pack of similar philosophers and economists.
In a foreword for Grubel's study on the prospect, Gordon Gibson characterizes the situation as such:
"Most fundamentally however, Mr. Grubel makes the sensible observation that "sovereignty is not
infinitely valuable." Every nation in the world, even the mighty United States, has traded off
elements of sovereignty to multi-national associations such as the WTO, NAFTA, and the United
Nations. Canada has been in the forefront of encouraging every such development--a natural policy
for a middle power."
For a "middle power" whose economy is weak and exchange rate declining steadily, such a maneuver
may be in the best interest. This is not the case when the strongest economy in the world, the United
States of America, considers diluting its monetary system with Mexico, a third world, "developing" nation
and Canada, a second socialist nation on our two land borders.
Further, U.S. sovereignty is, perhaps, our most precious facet, as defined in our Declaration of
Independence and Constitution. Our sovereignty is part of the formula that makes our Republic the most
unique political and cultural experiment in the history of civilization.
Rather than try to decode, re-describe and publish commentary on the prevailing philosophies and
arguments surrounding the need and advantages for a common hemispheric currency, this site provides
links to information from legitimate proponents and detractors.
Be advised that there is a lot of code and doublespeak in these articles. Few of the more elaborate
articles discuss the disadvantages to the U.S., but concentrate on the advantages to Canada and Mexico.
The most significant and timely aspect of the movement involves current U.S. participation in a
elaborate international program called the "Security and Prosperity Partnership Of North America, "
described elsewhere on this site.
The link-listing method on this site is in development. If you have particular comments or would like to
inform the host of this site as to a link to be reviewed for inclusion in this or any other section of this site,
please visit the "contact" page and inform us by email."
These links reach discussions of the "Amero, " "dollarization" and offer insight to the conditions of the
U.S. dollar, as well as Canadian and Mexican currencies.
The Case for the Amero: The Economics and Politics of a North American Monetary Union
Herbert G. Grubel--Herbert G. Grubel was David Somerville Chair in Taxation and Finance, The Fraser
Institute, and Professor of Economics (Emeritus), Simon Fraser University. He has a B.A. from
Rutgers University and a Ph.D. in economics from Yale University. He has taught full-time at Stanford
University, the University of Chicago, and the University of Pennsylvania; and has had temporary
appointments at universities in Berlin, Singapore, Cape Town, Nairobi, Oxford, and Canberra.
Herbert Grubel was the Reform Party Member of Parliament for Capliano-Howe Sound from 1993 to
1997, serving as the Finance Critic from 1995 to 1997. He has published 16 books and 180
professional articles in economics dealing with international trade and finance and a wide range of
economic policy issues.
The Plan to Replace the Dollar With the 'Amero'
Mr. Corsi is the author of several books, including "Unfit for Command: Swift Boat Veterans Speak
Out Against John Kerry" (along with John O'Neill), "Black Gold Stranglehold: The Myth of Scarcity
and the Politics of Oil" (along with Craig R. Smith), and "Atomic Iran: How the Terrorist Regime
Bought the Bomb and American Politicians." He is a frequent guest on the G. Gordon Liddy radio
show. He will soon co-author a new book with Jim Gilchrist on the Minuteman Project.
American University
The Threat of the Dollar: A case study
Wikipedia:
The online encyclopedia
Queens University, Canada
One of Canada's leading universities, with an international reputation for scholarship, research,
social purpose, spirit and diversity. Consistently ranked among the top universities in Canada,
Queen's is known for its high quality and incomparable 24-hour learning environment. The
University was established by Royal Charter of Queen Victoria in 1841 - twenty-six years before
Canadian confederation. Classes were first held in 1842. The earliest degree-granting institution in
the united Province of Canada, Queen's has reflected and helped shape Canadian values and
policies, educating many of the country's most notable political and cultural figures.
Help.com
Help.com is a network of people dedicated to helping you. Find answers to important questions.
Learn new skills. Achieve personal goals. Get inspired. Fix what’s broken. Build. Create. Solve
problems. Change things. Accomplish stuff that matters.
BankIntroductions.com
BankINTRODUCTIONS.com, is a private research group and banking introductions services
company based in Vancouver, British Columbia, Canada.
Fiscal and Generational Imbalances: An Update Adobe Reader required--get it here, free
A report to the Federal Reserve by Jagadeesh Gokhale and Kent Smetters, August 2005
Sunday, May 20, 2007
Happy Memorial Day
The summer months, which usually are considered the doldrums by those in the investment community, could provide some interesting outcomes as we head into the Memorial Day weekend and what many see as the onset of the summer season. This is also the start of the summer driving season, and gasoline is already hovering around $3.00 a gallon. As hurricane season also begins to heat up, I hope there are no direct hits on the oil infrastructure, or the possiblity of $4.00 a gallon gasoline I've read about could become a reality. Meanwhile, the Dow Jones Industrial Average continues to set record after record, and now the S&P 500 is is less than 5 points away from its all time record of 1,527.46 set in 2000. If the Federal Reserve holds interest rates steady at the FOMC meeting in June, they will have held rates steady for a year, something the Fed does not do often. The Fed has held its target for short-term rates at 5.25% since June 2006, after raising it steadily for two years to tame inflation. Banks use the rate as a benchmark for pricing consumer and business loans. These issues could be setting the stage for a very interesting second half of 2007.
For well over a year now, I've been writing about the dual concerns of a slowing economy and inflation. Fed policy has been concerned with remaining hawkish on inflation, while some economists, investors and journalists expected rate cuts as early as September 2006. The midcycle slowdown economists predicted seems to be exactly what has happened, with the bottom being symbolized by April's paltry retail sales figures. While many thought the housing slump would drag the economy into a recession, it seems the builders and subprime borrowers are the ones bearing the brunt of the pain. Most homeowners remain solvent and able to meet mortgage expenses. As long as the employment numbers continue to hold steady, consumers should be able to continue to meet obligations and make discretionary purchases.
Where the economy goes from here no one can predict with certainty, but there are reasonable hypotheses one can make based on the data. This economic cycle is in the mature phase of the current expansion and the mid cycle slowdown was like a breather, before growth picks up again. Expansions don't last forever, so at some point in the future we will have a recession again. With that said, it looks as if the second half of 2007 will be a time when growth reignites and inflation will continue to be the number one concern of the Fed. With the productivity of workers declining, and the pool of skilled workers drained, labor will begin to demand higher wages. Usually, when the economy slows down unemployment ticks upward, but that hasn't happened during the first two quarters this year. Some economists think this is because the slowdown in housing hasn't worked its way down to the employment figures. Others think there is a possibility the economy is actually growing faster than the GDP numbers indicate. As we head into the Memorial Day weekend, one thing is certain, gas is going to cost you about $3.00 a gallon. As far as interest rates are concerned, the jury is still out. Will the Fed raise, cut or hold? Will the S&P 500 EVER break 1,527.46? Time will tell. Enjoy the holiday!
For more information visit:
http://jerseybenefits.com
http://johnkaighn.com
For well over a year now, I've been writing about the dual concerns of a slowing economy and inflation. Fed policy has been concerned with remaining hawkish on inflation, while some economists, investors and journalists expected rate cuts as early as September 2006. The midcycle slowdown economists predicted seems to be exactly what has happened, with the bottom being symbolized by April's paltry retail sales figures. While many thought the housing slump would drag the economy into a recession, it seems the builders and subprime borrowers are the ones bearing the brunt of the pain. Most homeowners remain solvent and able to meet mortgage expenses. As long as the employment numbers continue to hold steady, consumers should be able to continue to meet obligations and make discretionary purchases.
Where the economy goes from here no one can predict with certainty, but there are reasonable hypotheses one can make based on the data. This economic cycle is in the mature phase of the current expansion and the mid cycle slowdown was like a breather, before growth picks up again. Expansions don't last forever, so at some point in the future we will have a recession again. With that said, it looks as if the second half of 2007 will be a time when growth reignites and inflation will continue to be the number one concern of the Fed. With the productivity of workers declining, and the pool of skilled workers drained, labor will begin to demand higher wages. Usually, when the economy slows down unemployment ticks upward, but that hasn't happened during the first two quarters this year. Some economists think this is because the slowdown in housing hasn't worked its way down to the employment figures. Others think there is a possibility the economy is actually growing faster than the GDP numbers indicate. As we head into the Memorial Day weekend, one thing is certain, gas is going to cost you about $3.00 a gallon. As far as interest rates are concerned, the jury is still out. Will the Fed raise, cut or hold? Will the S&P 500 EVER break 1,527.46? Time will tell. Enjoy the holiday!
For more information visit:
http://jerseybenefits.com
http://johnkaighn.com
Sunday, May 13, 2007
Utilizing Affiliate Programs
If you own your own website or blog, affiliate marketing programs can greatly improve your income and enhance your credibility among your customers. When signing up for affiliate programs, it should involve consideration as to the types of information that you already have on your website or blog. For example, you are more likely to have increased sales if you own a website about cats and place affiliate links on your website related to pet care. The affiliate products that you promote should always be related to the primary website or else you run the risk of confusing potential customers. Confused customers may not provide the business you are hoping for.
There are many affiliate marketing programs to choose from, so selecting an appropriate one for your website should not be too difficult. Before you join, you want to be fully aware of the pay structure and any changes that could be made to the pay structure. Be sure to thoroughly review the affiliate program and make sure you understand it completely before you associate your name with it. Credibility is very important if you want to build a loyal group of customers. If you mislead them, they will not be back.
If you are an affiliate, many times you will need to do more than simply place their link on your webpage. Although, some affiliates are simply link based, others may provide you with an entire internet based operation, or what is sometimes called a turnkey solution. Be sure to keep the links on your site updated. Some companies may be promoting seasonal items and you will appear more credible if your links reflect the seasonality of your affiliates. If a customer visits your site in December and notices that you are still promoting summer items, they are more likely to leave your site without considering the other information or products that you offer.
Sometimes a company goes out of business and their links can be replaced by an adult site or one that is unrelated to your content. If you do not keep on top of updating your links, you could be promoting an offensive or unrelated site. You should constantly review the various links you've placed on your site and eliminate dysfunctional links, because customers can get very frustrated if a link doesn't do what it is supposed to do. If your website is professional, visitors are more likely to spend time on your site, come back for subsequent visits and eventually convert to being paying customers.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
There are many affiliate marketing programs to choose from, so selecting an appropriate one for your website should not be too difficult. Before you join, you want to be fully aware of the pay structure and any changes that could be made to the pay structure. Be sure to thoroughly review the affiliate program and make sure you understand it completely before you associate your name with it. Credibility is very important if you want to build a loyal group of customers. If you mislead them, they will not be back.
If you are an affiliate, many times you will need to do more than simply place their link on your webpage. Although, some affiliates are simply link based, others may provide you with an entire internet based operation, or what is sometimes called a turnkey solution. Be sure to keep the links on your site updated. Some companies may be promoting seasonal items and you will appear more credible if your links reflect the seasonality of your affiliates. If a customer visits your site in December and notices that you are still promoting summer items, they are more likely to leave your site without considering the other information or products that you offer.
Sometimes a company goes out of business and their links can be replaced by an adult site or one that is unrelated to your content. If you do not keep on top of updating your links, you could be promoting an offensive or unrelated site. You should constantly review the various links you've placed on your site and eliminate dysfunctional links, because customers can get very frustrated if a link doesn't do what it is supposed to do. If your website is professional, visitors are more likely to spend time on your site, come back for subsequent visits and eventually convert to being paying customers.
John Kaighn is a Registered Investment Advisor with Jersey Benefits Advisors and writes articles on various business and investment information, ideas and opportunities. For more information about this and other topics you can visit http://www.johnkaighn.com and http://www.jerseybenefits.com
Wednesday, May 9, 2007
Fed Still On Hold
The Federal Reserve left interest rates on hold at the current level of 5.25% during the Federal Open Market Committee meeting today. The central bank noted the economy has been slowing, but is still expected to grow between 2.5% and 3% this year. As a result, they felt inflation is too high for their comfort level and still the number one threat to the economy.
The Dow Jones Industrial Average sprinted to another record close finishing at 13,369.29 for the session. The Standard and Poor's 500 added 4.86 points to close at 1,512.58, which is getting closer and closer to the record set in 2000, when the index reached 1,527.46. The Nasdaq composite index rose 4.59, or 0.18 percent, to 2,576.34. Of course, it is still far from the record set in 2000. Maybe someday, it too will surpass the old record, but I am not holding my breath for it to happen before the end of the decade.
The Dow Jones Industrial Average sprinted to another record close finishing at 13,369.29 for the session. The Standard and Poor's 500 added 4.86 points to close at 1,512.58, which is getting closer and closer to the record set in 2000, when the index reached 1,527.46. The Nasdaq composite index rose 4.59, or 0.18 percent, to 2,576.34. Of course, it is still far from the record set in 2000. Maybe someday, it too will surpass the old record, but I am not holding my breath for it to happen before the end of the decade.
Sunday, May 6, 2007
Markets, Limbo, News and Opinions
As we have been witnessing for the last seven months, the Dow Jones Industrial Average continues to set new records, since surpassing the old record attained back in 2000 at the height of the Tech Craze. Once again, the DJIA closed Friday at 13,264.32, another record high. Since the Dow surpassed the old high back in October of 2006, I have been concerned that the broader market, represented by the S&P 500 index, hasn't beaten its old mark, which was also set back in 2000. However, the S&P 500 has stealthily been adding points and is now within 21.84 points of surpassing its previous record of 1,527.46. The broader market setting a new record and adding to it would be a very positive sign for the continued advance of the current bull market. This past Friday's weak employment numbers indicate a further slowing of the economy. This should give the Fed the ability hold interest rates at the current level during the FOMC meeting on Wednesday. The Treasury Department releases the Producer Price Index on Friday, which will give a further indication of the direction of wholesale price inflation.
While I expect the S&P 500 to beat the old mark this upcoming week, I don't think the advance of this bull market will, by any stretch of the imagination, be easy or rapid going forward. One of the things I expect is that shortly after the S&P 500 sets a new mark, we could see a bit of a sell off and profit taking, which is a good thing. It is interesting to note this current rally is being led by mostly professional investors, while the retail investor is not really participating. My thoughts on that one are that the "cocktail party conversation" investors are still occupied by real estate and trying to flip houses. By the time these trend setting, band wagon jumpers climb aboard the stock market train again, the bull market will be nearing its peak. Let's hope we have some time before this happens. I'm hoping another year or so, because it may take some of them that long to sell their speculative houses!
This morning I also read an article in my local paper about Limbo, and the fact that Catholics, and any other religion that espoused the concept before, don't have to believe in it anymore, if they choose not too. For those of you who don't know the meaning of Limbo, it is the place an unbaptized baby goes if it dies. I just wonder if that means the word will disappear too, because then we wouldn't have a way to describe where our county is right now. Limbo, you see, seems to be as good a word as any to describe the standoff between Congress and the President on the funding of the Iraq War. The Democrats are showing exactly why they are so out of touch with the huge group of Americans who are neither right wing conservatives nor tree hugging liberals. Instead of coming up with a plan to have meaningful debate about the Iraq War, the Democrats have acted like they won a sweeping majority in both Houses of Congress, rather than their rather narrow majority. Immediately, out came the white flag and the pessimistic, defeatist attitude. Of course, the President hasn't been much better at listening to anyone.
So, here we sit in LIMBO, waiting for someone who "gets it" and stops catering to and polarizing the right and the left in this country. While the 2008 campaign is already in full swing, I am really somewhat disturbed by the lack of qualified leaders who might actually be able to unite this country. It must be done in the middle. We have to stop fighting the old battles between the right and left, and realize there is a real enemy out there that wants to destroy everything America stands for, and he isn't going away! I think it is safe to say most Americans are somewhere in the middle politically. Many moderates believe it is a woman's right to decide the fate of her unborn child within limits, don't have a problem with civil unions and what people do in their bedrooms, would like to keep taxes low, realize the government wastes tons of money and would like to see it be more frugal, hate the fact we are having soldiers killed in Iraq, but realize we CAN'T CUT AND RUN, understand we can't close our borders and isolate ourselves from the rest of the world, understand the threat posed by islamic terrorists, probably inhaled, and want to see policies that bring the most jobs and wealth to the largest majority of people in our country. What is your feeling on some of these issues?
John Kaighn
http://jerseybenefits.com
http://johnkaighn.com
While I expect the S&P 500 to beat the old mark this upcoming week, I don't think the advance of this bull market will, by any stretch of the imagination, be easy or rapid going forward. One of the things I expect is that shortly after the S&P 500 sets a new mark, we could see a bit of a sell off and profit taking, which is a good thing. It is interesting to note this current rally is being led by mostly professional investors, while the retail investor is not really participating. My thoughts on that one are that the "cocktail party conversation" investors are still occupied by real estate and trying to flip houses. By the time these trend setting, band wagon jumpers climb aboard the stock market train again, the bull market will be nearing its peak. Let's hope we have some time before this happens. I'm hoping another year or so, because it may take some of them that long to sell their speculative houses!
This morning I also read an article in my local paper about Limbo, and the fact that Catholics, and any other religion that espoused the concept before, don't have to believe in it anymore, if they choose not too. For those of you who don't know the meaning of Limbo, it is the place an unbaptized baby goes if it dies. I just wonder if that means the word will disappear too, because then we wouldn't have a way to describe where our county is right now. Limbo, you see, seems to be as good a word as any to describe the standoff between Congress and the President on the funding of the Iraq War. The Democrats are showing exactly why they are so out of touch with the huge group of Americans who are neither right wing conservatives nor tree hugging liberals. Instead of coming up with a plan to have meaningful debate about the Iraq War, the Democrats have acted like they won a sweeping majority in both Houses of Congress, rather than their rather narrow majority. Immediately, out came the white flag and the pessimistic, defeatist attitude. Of course, the President hasn't been much better at listening to anyone.
So, here we sit in LIMBO, waiting for someone who "gets it" and stops catering to and polarizing the right and the left in this country. While the 2008 campaign is already in full swing, I am really somewhat disturbed by the lack of qualified leaders who might actually be able to unite this country. It must be done in the middle. We have to stop fighting the old battles between the right and left, and realize there is a real enemy out there that wants to destroy everything America stands for, and he isn't going away! I think it is safe to say most Americans are somewhere in the middle politically. Many moderates believe it is a woman's right to decide the fate of her unborn child within limits, don't have a problem with civil unions and what people do in their bedrooms, would like to keep taxes low, realize the government wastes tons of money and would like to see it be more frugal, hate the fact we are having soldiers killed in Iraq, but realize we CAN'T CUT AND RUN, understand we can't close our borders and isolate ourselves from the rest of the world, understand the threat posed by islamic terrorists, probably inhaled, and want to see policies that bring the most jobs and wealth to the largest majority of people in our country. What is your feeling on some of these issues?
John Kaighn
http://jerseybenefits.com
http://johnkaighn.com
Wednesday, May 2, 2007
Midweek Economic Report
The Dow Jones Industrial Average surpassed 13,200 for the first time today, after a report on U.S. factory orders generated strong investor enthusiasm and optimism about the economy. The Dow gained more than 75 points and reached its second straight record close. The Commerce Department reported orders to U.S. factories rose 3.1 percent in March. This was the most robust in a year, led by strong demand for commercial aircraft. This increase was much higher than the 2 percent rise many analysts had been anticipating. The report was accompanied by a sharp increase in the level of business investment. The Labor Department will be reporting on March job creation and unemployment on Friday, and investors will be eyeing this report, as well corporate profits. All of this information will be dissected in an effort to ascertain how rapidly the economy might be slowing and whether earnings reports, which for the most part have beaten expectations, might continue to give stocks a lift. With the direction of the economy by no means certain, the competing scenarios of inflation or economic slowdown, which we've discussed since last year, still ring true today.
The term used by economists to describe what seems to have happened at this juncture is a mid cycle slowdown. With the initial first quarter GDP growth reported on Friday at an anemic 1.3%, and with the reports concerning factory orders and business investment reported today, the conclusion one could draw is the economy bottomed in the first quarter. If this is the case, it implies there may be quite a bit more life in the current expansion. The stock market, which is a leading indicator, seems to be signalling higher highs are in the future. If this is a true mid cycle slowdown, it would be very positive because it helps to ease concerns about inflation, which in turn could mean the Fed will continue to hold interest rates steady.
In all fairness, it is important to point out this bullish outlook is not shared by everyone. While some of the statistics can give one a true dose of optimism, there are those who look at the weaker dollar, the housing slowdown and the endless use of leverage in the financial system as a harbinger of bad times to come. Those in the bear camp tend to feel the stock market is overly optimistic about an economy that has slowed substantially and will continue to do so in the face of ever mounting pressure on consumers, due to decreasing home values and the inability to refinance mortgages with ever increasing monthly payments. According to Alan Abelson, the fabled writer for Barrons and the quintessential bear, "We think the economy will slide into recession, as the drag from housing and unprecedented consumer debt make themselves increasingly felt. We think the dollar will continue down the slippery slope, complicating Mr. Bernanke's life and inducing slumpflation. We think this overleveraged, overheated, overhyped market will blow itself out and touch off a chain reaction that'll rock global bourses. And all this will happen, if not tomorrow, then soon enough, we're afraid." These are some very sobering thoughts to ponder as we march toward Dow 14,000. I am relatively sure that number will not reached in the scant six months it took to go from 12,000 to 13,000. But then again, you just never know!
So how does one deal with the starkly different opinions about the direction of the economy and the markets? Well, you could sit on the sidelines in cash. The problem with that is, you just never know when it is safe to jump back into the market. I think it is better to have a disciplined, diversified, long term approach to investing. You should use a mix of cash, stocks, bonds, mutual funds or ETF's, commodities and real estate at a comfortable level of risk for YOU. This diversification can help protect you from the gyrations of one or more asset classes, when they fall out of favor. There are many risks lurking out there in the world to upset your apple cart. While you can't protect yourself from every risk to your portfolio, the more diversified your assets, the better chance you have of riding out the financial storms you'll encounter.
John Kaighn
http://jerseybenefits.com
http://johnkaighn.com
The term used by economists to describe what seems to have happened at this juncture is a mid cycle slowdown. With the initial first quarter GDP growth reported on Friday at an anemic 1.3%, and with the reports concerning factory orders and business investment reported today, the conclusion one could draw is the economy bottomed in the first quarter. If this is the case, it implies there may be quite a bit more life in the current expansion. The stock market, which is a leading indicator, seems to be signalling higher highs are in the future. If this is a true mid cycle slowdown, it would be very positive because it helps to ease concerns about inflation, which in turn could mean the Fed will continue to hold interest rates steady.
In all fairness, it is important to point out this bullish outlook is not shared by everyone. While some of the statistics can give one a true dose of optimism, there are those who look at the weaker dollar, the housing slowdown and the endless use of leverage in the financial system as a harbinger of bad times to come. Those in the bear camp tend to feel the stock market is overly optimistic about an economy that has slowed substantially and will continue to do so in the face of ever mounting pressure on consumers, due to decreasing home values and the inability to refinance mortgages with ever increasing monthly payments. According to Alan Abelson, the fabled writer for Barrons and the quintessential bear, "We think the economy will slide into recession, as the drag from housing and unprecedented consumer debt make themselves increasingly felt. We think the dollar will continue down the slippery slope, complicating Mr. Bernanke's life and inducing slumpflation. We think this overleveraged, overheated, overhyped market will blow itself out and touch off a chain reaction that'll rock global bourses. And all this will happen, if not tomorrow, then soon enough, we're afraid." These are some very sobering thoughts to ponder as we march toward Dow 14,000. I am relatively sure that number will not reached in the scant six months it took to go from 12,000 to 13,000. But then again, you just never know!
So how does one deal with the starkly different opinions about the direction of the economy and the markets? Well, you could sit on the sidelines in cash. The problem with that is, you just never know when it is safe to jump back into the market. I think it is better to have a disciplined, diversified, long term approach to investing. You should use a mix of cash, stocks, bonds, mutual funds or ETF's, commodities and real estate at a comfortable level of risk for YOU. This diversification can help protect you from the gyrations of one or more asset classes, when they fall out of favor. There are many risks lurking out there in the world to upset your apple cart. While you can't protect yourself from every risk to your portfolio, the more diversified your assets, the better chance you have of riding out the financial storms you'll encounter.
John Kaighn
http://jerseybenefits.com
http://johnkaighn.com
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