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  • Handing Down Your Legacy - A Special Gift For Readers

    As we prepare to celebrate the New Year, now is a good time to make sure that your affairs are in order and all of your financial information is recorded in one convenient electronic file that can be updated or changed at any time. And we believe we have developed the best program on the market today to do so.

    Today I am going to address several important financial planning issues everyone should consider, whether you’re young, old or somewhere in between. I will also tell you how you can receive our free E-booklet entitled, “Handing Down Your Legacy” that will help your loved ones manage your finances after your death. Sadly, this is often much more of a difficult burden than most people realize, but it doesn’t have to be that way.

    Our Handing Down Your Legacy is a convenient electronic document that makes it easy to put all of your important information in one place and makes it easy to update. There are several products on the market that allow you to consolidate all of your financial information in one place, but we developed Handing Down Your Legacy to allow you to include not only your investment records but also your final wishes.

    We believe our product is simply the most comprehensive and easy to use program available today. And best of all, it is absolutely FREE and there is no obligation on your part. So do yourself a favor and download Handing Down Your Legacy today. And make it your New Year’s resolution to complete it as soon as possible. Also, feel free to forward this E-Letter to your family and friends who may also benefit from this useful resource.

    HAPPY NEW YEAR!!!

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  • Why Quantitative Easing Didn’t Work

    While equity investors yearn for the Fed’s QE policy to continue, it’s actually a good thing that this unprecedented stimulus looks to be coming to a halt by the end of this year or early next year. Why is that a good thing? Because QE hasn’t worked, certainly not as intended.

    One of the most frequent questions I get from clients, business associates and even friends is: “Why didn’t quantitative easing work to stimulate the economy and create jobs?” It’s a complicated answer, but today I will do my best to explain why.

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  • Fed: No More Excuses Not To Taper - Just Do It!

    We had some terrific economic news late last week. The 3Q GDP report and the November unemployment report were so strong that some are wondering if the data are credible, and are likely to be revised lower next month. The government reported that 3Q Gross Domestic Product jumped from 2.8% as reported last month to a whopping 3.6% in its second estimate last Thursday, well above the consensus estimate of 3.1%.

    Then on Friday, we got another stunner. The US unemployment rate plunged from 7.3% in October to 7.0% last month. In addition, the report cited 203,000 net new jobs created in November. Both jobs numbers were significantly better than the pre-report consensus.

    Given that these two key economic reports were so much better than expected, it’s only natural to expect that the discussion would turn to the Fed and the possible implications for “tapering” its monthly QE bond and mortgage purchases. At its October policy meeting, the Fed said it was awaiting better economic news. Well now they’ve got it!

    So, the question now is, will the Fed move to taper at its next policy meeting on December 17-18? I was never a fan of QE in the first place, so in my view there is no question that the Fed should start to taper as soon as possible. That will be the thrust of our discussion today. But let’s start with some details on the latest surprising (but questionable) economic reports.

    I’ll round-out today’s letter with an invitation to attend our next online WEBINAR with one of my favorite money managers of all-time, Wellesley Investment Advisors. This company manages over $1.5 billion in assets and invests in “convertible bonds,” which most investors know very little about – but should. The webinar will be on December 12 at 2:00 PM Eastern Time (11:00 AM Pacific).

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  • Thank The Fed For Big Stock Market Gains

    My guess is that just about everyone reading my E-Letters would agree that the Fed’s massive “quantitative easing”(QE) program has had a bullish effect on the stock markets over the last few years. Several new reports conclude that the Fed’s unprecedented QE bond buying program is responsible for ALL of the stock market advance since the bottom in early 2009.

    No doubt, the stock markets have shown a strong tendency to rally during weeks when the Fed is making its huge QE bond and mortgage purchases. But is this the only thing driving the stock markets to record highs? That’s what we’ll look into today.

    On a related note, Senator Rand Paul has recently threatened to block the nomination of Janet Yellen as the next Fed chairperson – unless he can get a Senate vote on his new bill to “audit” the Fed. Of course, the Fed claims that it is already audited. So what gives? This is an interesting story that we will want to follow as it plays out; I’ll break it down for you today.

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  • The Big Secret Mutual Fund Companies Are Hiding

    Do you know that most (if not all) mutual fund and ETF sponsors are keeping vital information about their funds secret from you? We’ll start today’s E-Letter with a discussion about what that valuable information is and why fund companies don’t want you to know about it. I'll also tell you how you can download my latest FREE Special Report entitled, "The Secret That Mutual Fund Companies Don't Want You to Know."

    Better yet, after you read my latest Special Report, I’ll show you how to beat the fund companies at their own game by learning this secret about the actual mutual funds (or ETF’s) in your own portfolio. This is information you really need to know, and you may be very surprised by what you learn!

    From there, we shift our focus to the Fed. As you will recall, Fed Chairman Ben Bernanke first hinted of reducing “quantitative easing” (QE) bond and mortgage purchases in late May, and stocks and bonds took an immediate hit. In late June and July, Bernanke tried to walk-back the idea of “tapering” Fed purchases, and stocks soared to new record highs. However, in the last few weeks, “taper-talk” has become widespread again.

    Most forecasters now believe that the Fed will cut its monthly QE purchases from $85 billion to around $65 billion at its next policy meeting on September 17-18. That prediction sent stocks reeling last week, and 10-year and 30-year Treasury bonds plunged to their lowest level in two years. We'll talk about this and a lot more today. Let's get started.

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  • Fed’s Gobbledygook - What Do They Really Mean?

    Recent communications from the Fed and comments by Chairman Bernanke cast a great deal of uncertainty on the equity and bond markets in late June. Specifically, Bernanke's remarks in his press conference on June 19 - where he discussed ending its program of quantitative easing - prompted a huge global selloff in the stock and bond markets.

    In response, various Fed officials tried to "walk back" the idea that the Fed was ready to begin scaling back its $85 billion a month in bond and mortgage purchases as early as September and end the program by mid-2014. Based on those reassurances, stock prices recovered, but rumors of the Fed scaling back its stimulus later this year continued to circulate.

    Last Wednesday, the Fed released the actual minutes from the June 18-19 Fed Open Market Committee meeting. Those minutes revealed that the Committee did indeed discuss the possibility of scaling back its QE purchases, and even ending them at some point. However, in the end, all but one member of the Committee voted to continue the $85 billion a month in purchases indefinitely.

    With that news, the Dow Jones and the S&P 500 indexes surged to new record highs last Thursday. It is obvious that the equity markets are addicted to the Fed's stimulus. It remains to be seen, however, what this latest Fed decision will mean for the sagging bond market. So far, not much.

    Finally, there is something REALLY BIG brewing with regard to ObamaCare. President Obama's recent decision to postpone the "employer mandate" by one year to 2015 may have been unconstitutional.

    If you oppose ObamaCare, you absolutely must read the final section of this E-Letter. You won't hear about this in the mainstream media. If you don't read anything else, scroll down to: Delay of ObamaCare May Backfire on the President. You need to know about this.

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  • The Fed’s Dirty Little Secret: QE Does Not Work

    Bernanke speaks and the markets move, but probably not in the direction he expected. It appears that the stock and bond markets are addicted to QE and will crater anytime Big Ben even hints at taking his foot off of the gas.

    However, in this week's e-letter, I'm going to dig deeper into the Fed's activity over the past few years to dispel the myth that the Bernanke's unprecedented quantitative easing has lowered long-term interest rates.  In fact, I'll show how rates have actually risen during all three QE cycles.  You don't want to miss this.

    So how do you invest in this crazy market?  I have two words for you - "absolute returns."  I'll discuss how you need to take your eyes off of the short-term disruptions in the market and instead focus on the long term trends which, by the way, is where bulk of your investment goals likely reside. Plus, I'll show you how to get your FREE copy of my Absolute Return Special Report.

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  • Fed to End QE, Obama’s Tax & Spend Budget

    Today I tackle several topics, each of which could take up an entire E-Letter. But these topics are very important, and I want to address them today. The first is the minutes from the March 19-20 Fed Open Market Committee meeting that were released last Wednesday. Those minutes definitively confirm that the Fed is ready to chart an end to quantitative easing.

    The second topic is President Obama’s proposed federal budget for fiscal 2014 that was also released last Wednesday. The Obama administration claims that the latest budget proposal will cut the federal deficit by almost $1.2 trillion over the next 10 years. It will not. Furthermore, his new budget proposal would raise taxes and fees by over $1.1 trillion over the next decade. And that’s just for starters.

    But before we go there, I want to touch on new data which confirms that US economic growth in the current recovery has been the weakest EVER, since 1930 when such data was first recorded – even worse than after the Great Depression. The recent Great Recession officially ended in the 2Q of 2009 – true enough. But growth since then has been the slowest on record.

    That’s a lot to cover in one letter, so let’s get started.

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  • Shocking Fed Survey on Consumer Finances

    Today we focus on a new Fed study which found that Americans’ net worth plunged almost 39% in the period from 2007 to 2010. That period included the so-called Great Recession, a financial crisis and a severe bear market in stocks. There are lots of interesting statistics to look at in this new Fed study.

    I would be remiss not to comment on the results of the Greek elections on Sunday. As I suggested in my Blog on Friday, the mainstream New Democracy party prevailed and defeated the left-wing Syriza party that vowed to default on Greece’s debt and exit the euro. It remains to be seen what happens in Greece going forward, but hopefully it is off the front pages at least for a few weeks.

    The Fed Open Market Committee (FOMC) is in session as this is written. Rumors abounded last week that the Fed would vote to enact more “quantitative easing” at this meeting. I have also discussed that possibility in recent weeks. While we won’t know anything until tomorrow afternoon when we get the official policy statement, the markets are anticipating some new stimulus in one form or another. As for me, I’m not so sure.

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  • Why Quantitative Easing Hasn’t Worked

    Much has been written about the Federal Reserve's monetary policy known as "Quantitative Easing" or QE.  We know that the Fed's intent for QE was to jump-start the economy by making more money available to the nation's banks.  Yet we also know that the banks, in most cases, have not chosen to loan that money, and instead have elected to reinvest that money with the Fed.  As a result, QE has not produced the desired effect, and bank lending remains in the tank.
     
    Today, I have reprinted the best article I have seen on the subject of Quantitative Easing and why it has not had the desired effects that the Fed had hoped for.  I think this article will help everyone better understand what QE is and why it has not worked as the Fed had hoped.  As always, your comments and suggestions are welcomed.

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