Don't Miss Out On Great Gains! - Best Investment Newsletter

Click for FREE sample of Kirk Lindstrom's Investment Letter

Don't miss out! Subscribe Now, pub-7001134751860982, DIRECT, f08c47fec0942fa0

Search For More

Friday, June 24, 2016

Don't Sell into the Brexit Panic- Good Advice from Terry Savage

Yesterday in "SPY Near Another Record High While Some Sentiment Measures Continue To Improve" I wrote:
"I took profits as SPY peaked and now I’m looking for another buying opportunity."
Yesterday near the record high, my newsletter's "Explore Portfolio" was roughly 66% in stocks with about 19% in cash and the remainder in  individual US Treasury bonds.  

Below is good advice via email at 7:11 AM PST from Terry Savage.

Don't Join the Brexit Panic!

The U.S. Stock market opened down 500 points this morning -- as the global markets were surprised overnight by the vote of Great Britain to leave the European Union.

The British pound fell 11 percent overnight -- to a 30 year low.  Money fled to the United States, pushing the dollar higher,  and to Japan, pushing the yen higher.  And scared money rushed to gold, up $68 in early going this am to $1331/oz.

Markets around the world are adjusting to this new situation -- which will take at least two years to play out.  Global trade will be disrupted.  A strong dollar is bad for U.S. multi-national companies, whose products will be more expensive to buyers abroad.  That's bad news for the U.S. economy -- for corporate profits, for jobs, and for growth.

All that money rushing to safety in the U.S. has pushed Treasury yields even lower (buying demand pushes prices up and inversely pushes yields lower).  The Fed certainly can't raise interest rates now.

A brighter perspective:  That influx of money seeking safety likely won't sit in low yielding T-bills or CDs. Instead, being "smart money" it will seek out dividend-paying U.S. stocks -- and so eventually could be a positive force in our stock market.

But no doubt, today, and next week, and perhaps the next few months will see volatile times for the U.S. market.  Over the weekend, there will be margin calls -- forcing even more selling on Monday.  There will be room for panic selling to continue.

Don't sell into a panic!

You know that rule!  And definitely don't sell out of your mutual funds today.  If you panic and put in an order this morning, you'll get today's closing price. That will lock in a big loss.

The world will reorganize itself; it always does.  And your retirement is years away.  America is still the best place to invest in the world -- and looking even more attractive now.

And now you see the benefits of having "chicken money"!

Cash looked ugly and boring last week, last month.  But if you stuck to your plan to keep some cash on the sidelines, you'll be able to sleep tonight.  And maybe even to buy some bargains in the months ahead.

That's The Savage Truth!
Terry Savage
333 W. North Ave. #117
Chicago, IL, US, 60610

Currently, my "Explore Portfolio" is down about 2.4% from yesterday's peak value. This could just be "noise" and another of the 3 to 8% pullbacks. I prefer to have more than a few percent to call it a buying opportunity, but maybe some of the individual stocks will correct more.

It could take awhile to play out so I'm in no hurry. The nice thing about a large cash position mixed with high beta stocks is you can beat the markets when they are going up while still having cash for the big declines.

Follow me on Facebook, Seeking Alpha, tsÅ« and Twitter.

Kirk Lindstrom's Investment Letter:

Wednesday, June 08, 2016

Vanguard Retirement Advice vs. Kirk's Newsletter: A Testimonial

All of the core funds in my newsletter are low cost index funds from Vanguard.  
Currently I recommend six different funds for both my "Aggressive Core Portfolio" and my "Conservative Core Portfolio."  Here is an email I got out of the blue from a subscriber who has been with me for many years and gave me permission to use his note.
On 6/6/2016 5:14 PM, Tom H. wrote:
Hi Kirk,
   I thought I would share a conversation with a Vanguard advisor on Friday and for the first time ever I felt like I was being sold.  They “offered” a service that has a name which I can’t recall but basically they would advise and monitor and discuss with me on a quarterly basis my investment portfolio.  I’m sure they would be helpful but for a guy who has mostly done all his own homework or more recently relied on your newsletter it felt like a lot of $.  I believe the cost is .30 or $3,000 per million annually.  On a percentage basis it doesn’t sound like a lot but compared to your newsletter and a long time investor who has gained a lot of knowledge I felt sticker shocked.  I guess what I’m saying is your newsletter is a bargain 
    I’d also like to ask why you don’t just throw all your international into the total international stock rather than sector it. ......  Thanks.
Kirk Lindstrom's Investment Letter:

Followers - Click "follow" to get an email alert for new articles

Kirk Lindstrom's Investment Letter Performance