Gridlock During the Next Recession To Trigger A Stock Crash?

Assuming the Republicans keep control of the House of Representatives after the election then they may be able to participate in the joint creation of gridlock  because of an inability to get along with Clinton and thus they will avoid tax increases next year. This could prevent a tax increase that would trigger a recession. It may be tempting for investors to conclude that there won’t be any changes and thus stocks won’t crash. But since stocks are overpriced (and need to drop 45% from their top to reach fair value) and the economy is at a 1.9% GDP this quarter (estimated) and has been logged in at 1.3% annual GDP growth for the first half of the year then

2016-10-17T10:12:50-07:00October 17th, 2016|mayflowercapital blog|Comments Off on Gridlock During the Next Recession To Trigger A Stock Crash?

Best Assets In 2015 – How Will They Perform in 2016?

It has been said that 2015 was the hardest year to make money in 78 years. Stocks had a total return of 1.38% for the SP because of dividends, but a slight negative return if one counts only the price. The best assets in 2015 were investment grade bonds. Of this class the best sub-class were Municipal bonds. These bonds are often reported in the press on their yields before adjusting for tax. If the yield was adjusted for the tax-free benefit then the investment grade Muni index total return of 3.19% would have been roughly a taxable equivalent of 4.8%, assuming a taxpayer is in the 33% combined state and federal marginal tax bracket and that the bonds were

2016-01-04T20:19:09-08:00January 4th, 2016|mayflowercapital blog|Comments Off on Best Assets In 2015 – How Will They Perform in 2016?

Retirement Planning: Independent Financial Advice

The 4 Percent Rule -- What is the Right Amount to Withdraw from Your Retirement fund each year?With stagnant incomes and roller-coaster investment returns over the past decade, individualson the brink of retirement might wonder what became of all those “rules of thumb” affecting howthey handle their nest egg once they walk away from their jobs.They’re still there. But the question of how well they work comes down to the individual.Chief among them is the “Four Percent Drawdown Rule” first revealed by CERTIFIEDFINANCIAL PLANNER™ professional William Bengen in the October 1994 issue of theFinancial Planning Association’s Journal of Financial Planning. Bengen wrote that retirees whotook out no more than 4.2 percent of their mostly stock-based portfolio in the initial year

2017-01-10T23:32:39-08:00January 22nd, 2011|mayflowercapital blog|Comments Off on Retirement Planning: Independent Financial Advice

Increasing Results Using Risk-Aware Investing

     Risk-aware investing means to judge an investment by its risk adjusted rate of return. This means using Sharpe ratio or Information ratio to see how much reward did you obtain in return for the risk you took. The goal is to spot investments that had a high performance but were so risky that they really did not make enough profit to offset or to justify taking the risk. Using this technique means an investor may make less than another investor who takes on excessive risk however an investor who uses risk-aware techniques may be able to reduce the probability of serious losses. However, nothing about investments is guaranteed and past performance is not indicative of the future.    

2011-01-13T17:18:00-08:00January 13th, 2011|mayflowercapital blog|Comments Off on Increasing Results Using Risk-Aware Investing

Albert Edwards Warns of China’s Bubble Bursting

     Albert Edwards of the French bank Société Générale was quoted in The Guardian article of 1-3-2011. He is a good example of independent investment advice. He said “…China is basing a growth model on the most unstable part of GDP. Something has to give – and probably sooner than most people assume. … In reality, China is a much more potentially volatile economy than people think. The Chinese situation is the one that could come out of nowhere because people are not considering it…. China has produced such strong growth for such a long time that investors assume the process will last indefinitely’…. “There is too much confidence in the lack of volatility.” End quotes.

2017-01-10T23:32:40-08:00January 2nd, 2011|mayflowercapital blog|Comments Off on Albert Edwards Warns of China’s Bubble Bursting