Making Money Alert
The March Higher Continues
03/17/2010
On Tuesday, the Federal Reserve let Wall Street know that it’s going to enjoy an “extended period” of low-cost capital. The central bank was widely expected to leave interest rates untouched, and it did that. But all eyes were on the Fed’s accompanying statement, which included the “extended period” language that the bulls wanted to see.
The result was another winning day in the trading pits, and a continuation of the remarkable run that stocks have enjoyed over the past 52 weeks. Take a look at the chart below of the S&P 500 and you can see unequivocally that the march higher continues.
Stocks now are above both major trend lines, the 50- and 200-day moving averages. In fact, if we look at all of the major market averages, we see that they all trade at 52-week highs. This is good news if you’re fully invested in stocks, but if you’ve got money on the sidelines you’ve been waiting to put to work, then your circumstances are not so good.
Admittedly, I approach situations like these cautiously, as I’ve seen way too many portfolios melt down by trying to chase performance. You see, when everyone is buying and the market is largely going higher in spite of negatives such as massive budget deficits, exorbitantly high unemployment and the federal government’s potential takeover of the health-care industry, well, my worry meter starts to go into the red.
Can stocks continue marching higher for much longer? Well, during the past year, they’ve proved that they can. However, it’s also because stocks have run up so far, so fast over the past year that has me even more worried about the prospects for a continued run higher in stocks.
As always, we’ll be watching the technical indicators to see if and when a breakdown in the bullish bias of the market takes shape. When it does, you won’t want to be walking the equity high wire without a net.
The Difference between Brokers and Advisors
Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has been all over the media lately with his plans to impose new regulation on the financial industry. One of the proposed changes to the current body of regulatory law includes the potential of designating brokers and other financial advisers as fiduciaries.
Now, you may have already thought that your broker or advisor was a fiduciary, which just means that the individual is required by law to act in your best financial interest. Well, if you thought that, you’d be wrong. Most brokers and financial advisors are not bound by a fiduciary responsibility to protect your money.
The only kinds of advisors that are bound by fiduciary rules are registered investment advisers, or RIAs, and certified financial planners.
My firm, Fabian Wealth Strategies, is a registered investment advisor that knows and respects the fiduciary relationship we have with our clients. In fact, the requirement that we steward your money with the utmost caution and care fits eminently well with our personal charter to preserve and protect your capital.
I don’t think Sen. Dodd’s proposal to make all brokers and financial advisors fiduciaries will end up in the final version of financial regulatory reform. The Wall Street lobby is too powerful to let that happen. You see, the big brokerage firms really don’t want to be responsible for your money the same way as RIAs.
I’ll leave it up to you to judge which type of advisory relationship you’d prefer, but let’s just say I know the one I prefer, and that’s the fiduciary responsibility of the RIA.
NOTE: Fabian Wealth Strategies is a SEC registered investment adviser, and is not affiliated with Eagle Publishing.
Tax Day Is Getting Really Close
It’s St. Patrick’s Day, and that means you have slightly more than four weeks before you need to send that tax return to Uncle Sam. Over the past month, I’ve been working particularly hard on my own tax situation by meeting regularly with my CPA, Lee Haight. You may recall that Lee wrote an excellent article in December that detailed ways you could make the most of your tax planning in 2010.
Well, there’s still time to get your fiscal house in order before you have to complete and send in your return, so it behooves you to arm yourself with the best intelligence you can as we approach the dreaded tax deadline.
To help you plan further for this year’s taxes, I conducted an interview with Lee, recorded it, and I now have made that interview available at DougFabian.com.
If you want to find out what you need to be doing right now to get yourself prepared for April 15, then I highly recommend you listen to this interview now.
I guarantee you’ll find our discussion most insightful -- and it could save you a whole lot of money on April 15.
Listen to My FREE Teleseminar
On Saturday, March 6, we held our latest teleseminar, titled “The Return of the Bear Market.” I want to personally thank all of you who joined me for this event, and as you know, we had a great time discussing ways to deal with the changing tide of the markets.
If you didn’t get a chance to participate in last Saturday’s call, don’t worry. We’ve recorded the entire teleseminar and posted it at our Web site for you to listen to it absolutely FREE.
This one-hour teleconference covers topics such as:
- Why stocks and bonds have the potential to enter a new bear market
- What are the warning signs to look for in the markets
- Where investors can seek safety during the next 12 months
- How you can profit from the crisis
If you would like the answers to all of these questions -- plus a whole lot more -- I invite you to click here for all the details.
NOTE: Fabian Wealth Strategies is a SEC registered investment adviser, and is not affiliated with Eagle Publishing.
Thoughts on Bad Government
“The worst evils which mankind has ever had to endure were inflicted by bad governments.”
--Ludwig von Mises
The celebrated economic thinker was a genius at identifying the true nature of the state. In this poignant quote, he reminds us that the very worst mankind has ever had to endure has come straight from the minds and dictates of government officials. Remember that as we continue witnessing the changing milieu in Washington, D.C.
Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my radio show, newsletters, seminars or anything else. Click here to ask Doug.
Sincerely,
Doug Fabian
P.S. My publisher, Eagle Financial Publications, is now on Facebook. Click here to see our page and be sure to become a fan when you get there.