Bullet train
I just came back from a long trip in China and Taiwan. During the trip, what impressed me the most was China’s bullet train. We rode the longest high-speed rail line in the world – Beijing to Guangzhou – which started services only a few months ago.
The train is futuristic, comfortable and extremely smooth. Zipping at speed of 300 km/h or about 190 mph, the water in my glass sitting on the table stayed still.
With such a speed, one could travel from New York City to Washington DC in one hour and 15 minutes, or from New York City to Chicago in three and a half hours. High-speed rail truly shrinks the country.
New York Stock Exchange
The S&P 500 closed the first quarter at a record high. Should that worry investors? The short answer is, No.
When the market was 30% below the high three years ago, I did some research. I categorized all market conditions into:
1. Breaking a new high.
2. Less than 10% below historical high.
3. Between 10% and 20% below historical high.
4. Between 20% and 30% below historical high.
5. Between 30% and 40% below historical high.
6. More than 40% below historical high.
Then I calculated the one year forward returns of the six conditions.
10. January Barometer Effect: What Will the Stock Market Do for the Rest of 2013?
9. Email Scam Targets Financial Advisor Clients
8. Why Asset Class Diversification is Superior
7. How Often Do Market Corrections Happen?
6. Variable Annuity Fees You Don’t Know You are Paying
4. Profit from Harry Dent’s predictions? Think again
3. The High Cost of Fee-based Financial Advisors
1. Be Careful When Buying a Condo as a Rental Property
Also see Top 10 last month.
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What fills up your tank?
Posted on: February 28, 2013
How Can I Help?
“What makes you smile every day? What fills up your tank?”
These are questions a friend of mine asked me recently. For my wife, it is hosting dinner parties. She loves seeing people come together and enjoys conversations with friends. She does this almost every week now. It is also a great way for me to see her doing the thing she loves.
For me, it is learning improv and performing comedy on stage. English is not my first language, and I never thought I could do that. Now, I regularly go on stage to make people laugh.
House for sale
Recently, a client called to tell me that he had finally got the big boulder off his back, and it was such a relief for him.
The “big boulder” he referred to was his big house, with a swimming pool and a tennis court. The house had been costing him $100k a year in property taxes and upkeep, more than 50% of my client’s retirement income. No wonder he called it a big boulder on his back.
He bought the house 25 years ago for $2.2mm, and he just sold it for $2.1mm. After all the costs associated with selling the house, he took home $2mm and change.
January Barometer Effect: What Will the Stock Market Do for the Rest of 2013?
Posted on: February 7, 2013
New York Stock Exchange
With the market up about 5% in January, a prospective client of mine called to let me know he is not going to invest in stocks at this time – in fact, he is going to pull all of his money out of the market.
This may not be the best course of action for him.
According to research done by Cooper and McConnell, what the market does in January has a strong predictive power for what the market will do for the rest of the year.
Using data since 1940, they found that if the market is up in January, it will rise an additional 14.8% for the rest of the year; if the market is down in January, it will rise only 2.92% for the rest of the year. This gives rise to a spread of almost 12%, a highly statistically significant number.
Email scam
I recently received an email from a client of mine. The mail contained only one line: “What’s the balance of my account?”
“It’s $978k as of close of yesterday,” I replied.
“I need $500k for a business transaction,” my client responded.
I went into an explanation of the tax consequence of selling long-held investments to fund a business transaction, but my client insisted that he needed the money urgently. So I emailed him: “send me your wire instruction, and I will make sure the money will be in your account tomorrow.”
