Volatile markets and shaky economic times have made Americans hungrier than ever for financial advice, and Larry Swedroe is happy to oblige.
It may not be the advice they expect, however. Rather than telling you how to react to the latest news out of Europe or Washington, Swedroe wants you to tune it out. Especially, he says, you should ignore the experts who predict that the news will be good or bad for the stock market.
He’s just published his 11th book on investing, but Swedroe is no market guru. If anything, he’s an anti-guru. By the time you read about an event, he says, its implications are already reflected in the price of everything from stocks to bonds to crude oil. No one prognosticator can know more than millions of market participants.
“When they’re right, they attribute it to their genius,” Swedroe says. “When they’re wrong, they blame bad luck. There are no clear crystal balls, only cloudy ones.”
In the new book, “Investment Mistakes Even Smart Investors Make,” Swedroe lists 77 common errors, several of which are especially dangerous during turbulent times. Being swayed by popular opinion is mistake No. 6, and paying attention to the experts is No. 10. If you try to time the market in any way, you’re guilty of No. 49.
Swedroe’s advice is so simple that it’s difficult for most people to follow. You should invest in low-cost index funds, diversify across asset classes and be cognizant of tax considerations.
“It’s not just buy and hold,” he explains. “It’s buy and hold, tax-manage, rebalance and if anything happens like a birth or death in the family or an inheritance, then revisit your investment plan. People think buy and hold means do nothing, and it’s more than that.”
Swedroe criticizes brokerage firms, mutual funds, hedge funds and even the financial media because he thinks they prey on investors’ weaknesses. Mistake No. 29, for example, is believing that actively managed funds can beat the market, and No personal loans for bad credit. 53 is working with a commission-based adviser.
Swedroe is research director at Clayton-based Buckingham Asset Management, which works on a fee-only basis and puts its clients’ $3.5 billion of assets into index-like funds.
The firm had just $11 million of assets when Swedroe joined in 1994, and his books have helped Buckingham grow. He insists, though, that they’re written to educate, not market a service.
Indeed, there’s no hard sell here. Swedroe says he’s happy if a do-it-yourself investor follows his methods, or even if a reader chooses a competing firm that embraces the same principles.
Swedroe’s books do get repetitive; “Rational Investing in Irrational Times,” published in 2002, was also organized as a collection of common mistakes. (Back then, he tallied only 52 errors.)
Each volume, though, adds new research and examples, and Swedroe says he’ll keep evangelizing as long as he can think of new ways to spread his message. He had thought “Investment Mistakes” might be his last book, but he’s now working on a shorter, breezier primer for people with brief attention spans.
Swedroe figures that his books have sold almost 200,000 copies combined, a respectable but not huge following.
What’s most rewarding, he says, is hearing from readers such as a doctor who used to day-trade and obsess over his investments. His wife was threatening to leave because he had little time for her or their small child. Reading a Swedroe book saved his marriage.
That’s why this anti-guru is so passionate about his message. It’s not just about money, he says, it’s about life.
Payday loans online from $100 to 1000 loan payday with no faxing. Get cash advance loans now. Click here for immediate funding.
A bomb hidden under a parked car exploded near Muslim pilgrims Friday, killing at least two and wounding four as they made their way to an annual Shiite religious festival in a holy city south of Iraq’s capital.
Pilgrims are an easy target for insurgents looking to stoke sectarian violence as U.S. troops prepare to depart Iraq by the end of the year.
Friday’s bomb exploded in a parking lot about 14 miles (22 kilometers) from the holy city of Karbala, where thousands of pilgrims are flocking this weekend for the annual Shiite festival of Shabaniyah.
The blast ignited five nearby cars, causing a second explosion when a gas tank caught fire, said Maj. Gen. Othman al-Ghanimy, commander of Karbala military operations. Two pilgrims were killed and four wounded, he said.
Karbala provincial councilman Hussein Shadhan al-Aboudi put the toll at three dead and 28 injured.
The weekend’s religious festival celebrates the birth of Mohammed al-Mahdi, the twelfth and so-called hidden imam, who disappeared in the ninth century. It is always held in the Islamic month before the Muslim fasting month Ramadan which this year falls in August.
Also Friday, a roadside bomb targeted a police patrol in Baghdad’s southern Dora neighborhood, killing one passer-by and wounding three instant credit reports.
With Iraq still plagued by widespread violence, Washington and Baghdad are considering keeping as many as 10,000 U.S. forces in Iraq beyond a year-end departure deadline. In excepts from an interview to air Friday night, Prime Minister Nouri al-Maliki repeated his long-standing offer for a small number of American military trainers to stay and help Iraq’s fledgling security forces.
Both nations are moving toward a troops withdrawal.
On Friday, officials said the last 10 Iraqi detainees in U.S. military custody are about to be turned over to Iraqi authorities.
Justice Ministry spokesman Haider al-Saadi said nearly 200 inmates were transferred to Iraq’s custody earlier this week. They were among the last inmates to be held by the U.S. and included some top allies and relatives of former dictator Saddam Hussein.
The handover of the prisoners is the final step by the U.S. to relinquish control of Camp Cropper on Baghdad’s western outskirts.
The process began a year ago, but since has been marred by high-profile escapes by some of its inmates.
Therefore, the best way for you on how to get free credit reports online is to go to the AnnualCreditReport.com; this is the official web site.
As the jobless rate inches up and the economic recovery sputters, investors looking for a few good stocks may want to follow the money _ or rather the TV, the beloved Fender guitar, the baubles from grandma, the wedding ring.
Profits at pawn shop operator Ezcorp Inc. have jumped by an average 46 percent annually for five years. The stock has doubled from a year ago, to about $38. And the Wall Street pros who analyze the company think it will go higher yet. All seven of them are telling investors to buy the Austin, Texas, company.
Is the economy still just in a soft patch? A hard patch? Will the market rise or drop? Even experts are just guessing. In investing, it’s often better to focus on what you can safely predict, even if that safety is found in companies that thrive on hard times. One good bet: The jobless aren’t likely to find work anytime soon. And companies profiting from their bad fortune will continue to do so.
Among them:
_ Stock in payday lender Advance America Cash Advance Centers (AEA) has doubled from a year ago, to just under $8. Rival Cash America International Inc. (CSH) is up 64 percent, to $58. Such firms typically provide high interest loans _ due on payday _ to people who can’t borrow from traditional lenders.
_ Profits at Encore Capital Group, a debt collector that targets people with unpaid credit cards bills and other debts, rose nearly 50 percent last year. Encore has faced class action suits in several states, including California, over its collection practices. The Minnesota attorney general filed a suit in March. No matter. The stock (ECPG) is up 59 percent from a year ago, to more than $30.
_ Stock in Rent-A-Center (RCII), which leases televisions, couches, computers and more, is up 57 percent from a year ago to nearly $32. Nine of the 11 analysts covering the company say it will rise further and that investors should buy it.
The idea of investing in companies catering to the hard-up might not be palatable to some people. But it is profitable.
Mark Montagna, an analyst at Avondale Partners in Nashville, has developed what he calls “value retail” index of 11 companies _ dollar stores, off-price shops and clothing and footwear chains favored by shoppers looking for deals. The index is up 149 percent since February 2009, which marked the lowest month-end closing value for the S&P 500 during the recession.
Desperation stocks continue to be lifted by a drumbeat of bad news. Consumer spending, adjusted for inflation, has fallen for two months in a row _ the first back-to-back fall since November 2009. On Friday, the government reported the unemployment rate rose to 9.2 percent in June, sending stocks in tailspin. On top of that, one in seven Americans now live below the poverty line, a 17-year high.
“It’s been a good year,” says John Coffey Jr., a Sterne Agee analyst, referring to the companies he follows, not the economy. Coffey created a stir late last month when he issued a report arguing shares of Ezcorp (EZPW), which also makes payday loans, were worth a third more than their price and urged investors to buy. The stock rose 7 percent in just a few hours.
The next day a widely followed survey showed consumer confidence at a seven month low.
“Here we are celebrating the second year of recovery and confidence is at levels consistent with a recession,” says David Rosenberg, an economist at money manager Gluskin Sheff. “The folks in the survey are probably not the same folks shopping at Tiffany’s.” (That company’s stock is also up nearly 50 percent since March, to about $82.)
But they probably are shopping at Dollar General Corp. Stock in the discount retailer recently hit $34.13, up 50 percent from its IPO in late 2009. And it may be worth about a third more, at least according Avondale’s Montagna.
“People are broke. They’re all chasing value. It’s a seismic shift in mindset,” he says.
Some experts think these down-and-out stocks are just as likely to fall now instead of rise. It’s not that they think the recovery will turn brisk and people will get jobs and shop elsewhere. It’s that things could get worse _ making customers too poor to borrow or buy even from these outfits. Rent-A-Center, the furniture store, is already suffering. Some of its core low-income shoppers have seen money they would have spent leasing a couch or cocktail table eaten up by rising food and fuel bills.
But not to despair. According to Nick Mitchell, an analyst at Northcoast Research, wealthier customers, say those making $45,000, are feeling so strapped lately that they’re starting to rent furniture, too.
Montagna, the Dollar General bull, says he’s seeing people earning $70,000 or more at that chain, too. Even he shops there now.
“If I’m driving past one, I stop in,” he says, adding triumphantly, “I just bought toothpaste _ Crest _ two tubes for $4.”
TMX Group Inc. says London Stock Exchange Group plc has agreed to pay a special cash dividend of $4 per share, sweetening its bid for the Canadian stock market operator by $660 million.
TMX says its shareholders will get the special payment of $4 a share in cash when the proposed merger closes.
The move sweetens the friendly merger
For nearly four decades, Jill McClelland has sold and repaired hunting rifles and handguns to customers from around the world at a tiny shop in a sparsely populated area in St. Charles County.
The recession didn’t put a dent in gun sales at the New Melle Gun Shop. The single-story building behind McClelland’s home averages between 600 and 700 gun sales annually, mostly handguns, a pace that has stayed steady even during tough economic times.
Now, though, McClelland and her two employees face the permanent closure of her business after her license to sell firearms was revoked because of record-keeping and reporting lapses spanning many years, according to federal officials.
A judge in the case affirmed the Bureau of Alcohol, Tobacco, Firearms and Explosives’ license revocation this week. The store is among the less than one percent of more than 10,000 gun stores inspected annually in the nation to have their licenses revoked.
On Thursday, the Department of Justice notified McClelland that the store must close.
McClelland’s attorney, Lawrence Fleming, said he plans to file an appeal of the decision and will seek a stay on the revocation so the store can remain open during the appeal process.
For McClelland, keeping the store open means keeping alive the dream she and her husband embarked on in 1974 when they quit their jobs and opened their own business.
Jack, her husband of 44 years, died in September 2008 from non-Hodgkin’s lymphoma. McClelland admits that dealing with his death led to discrepancies in paperwork at the store.
“I’m not making excuses,” she said. “My life was in turmoil. I don’t think there ever is a worse pain than losing your mate.”
In its final notice of license revocation dated August 2010, the Department of Justice listed hundreds of violations against the gun shop dating back as far as 1981. Since 2007, the ATF alleges that in 32 instances, the store took guns on consignment without completing the proper forms or doing the required background checks on the guns’ owners, and in 33 instances, the store sold firearms without contacting the National Instant Criminal Background Check System, as required by law.
The largest number of violations
Air Canada
Kohl’s Corp.’s first-quarter net income climbed 6 percent as the department store chain controlled expenses and expanded its online business. The company also lifted its full-year earnings outlook Thursday.
Kohl’s earned $211 million, or 73 cents per share, for the period ended April 30. That’s up from $199 million, or 64 cents per share, a year earlier.
The performance met analysts’ expectations.
Revenue rose 3 percent to $4.16 billion from $4.04 billion. Wall Street forecast revenue of $4.26 billion.
Kohl’s, based in Menomonee Falls, Wis., now expects full-year earnings of $4.25 to $4.40 per share, up from $4.05 to $4.25 per share. It anticipates second-quarter earnings of 96 cents to $1.02 per share. Analysts predict full-year earnings of $4.36 per share and second-quarter earnings of $1 per share.
CUPERTINO, CALIF.
Powered by WordPress -- XHTML 1.0