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How to benefit from rising interest rates.

Mar 26

Posted by admin in commodities, investing, mitigating risk, mutual fund, real estate, stocks | No Comments

If interest rates start to rise, there are ways you can benefit!


While interest rates have been at a record low, it has been hinted that those days are soon over. Typically, higher interests rates are dreaded, as they lead to lower stock prices and higher home costs. However, there are some investments that do actually benefit from rising rates. In these confusing and dire economic times, it is important to learn how to fluctuate in time with the economy.

If interest rates do actually increase, as had been hinted by Federal Reserve Chairman Ben Bernanke, one of the ways you can benefit is by boosting your short-term savings. When interest rates increase, there are better returns from your cash and other short-term investments. Putting funds in money market mutual funds invests in a mix of stable, short-term instruments and you can access your funds quickly. It can also benefit you to put funds in certificates of deposit (CDs) to ensure that your money is easily accessible to you.

If interest rates are going to rise, it is very important to try and pay as much of your debt off as possible. Because credit card debt is already at a high rate, it is probably best to start by paying that off. Next, work to pay adjustable rate loans off. If you have an adjustable rate mortgage, consider refinancing into a fixed rate loan because mortgage rates are very low currently and will most likely increase regardless.

In short, if interest rates increase, benefit from the rise by boosting your short-term savings and building up your emergency funds with money market funds and CDs. While reaping the benefits, make sure you lower your debts to avoid a rise in your monthly payments.

About the Author

*This article was contributed by consumer protection/bankruptcy Attorney Jonathan Ginsberg, our expert bankruptcy contributor whose website can be found at: http://www.thebklawyer.com/thebkblog/


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Market Conditions

Mar 16

Posted by admin in commodities, investing, mitigating risk, mutual fund, real estate, stocks | No Comments

Money Market Recap and Forecast

Treasury prices took a tumble on the heels of the February employment report two Fridays ago.  Yields, which move in the opposite direction of prices, rose and remained high all of last week.

There were no reports to encourage buying in Treasuries.  And Wall Street was pretty quiet.  Bond traders were concerned about the $84 billion in government debt going on the auction block, but demand was very strong.  Nevertheless, worry persists that huge supply will water down demand.

Monday and Tuesday were void of reports, and there might as well not have been any on Wednesday, considering it was on wholesale inventories for January.  They went down 0.2%.

Thursday’s report on first-time unemployment claims for the week ended March 6 showed another decline.  Claims dropped by 6,000 to 462,000, which was slightly lower than the 460,000 forecast.  The four-week average, which smoothes volatility, rose by 5,000 to 475,000 — the highest level since November.  And continued claims, those collecting benefits for more than one week, rose to 4.56 million.  But there was little reaction in bonds, as traders focused on the 10-year auction.

The U.S. trade deficit shrank to $37.3 billion from a revised $39.9 billion, but trading was unaffected.

Friday’s better-than-expected report on retail sales spurred selling, pushing the yield on the 10-year note even higher.  Sales rose 0.3% in February versus a 0.5% gain the previous month.  Excluding autos, sales rose 0.8%, better than January’s 0.6% increase.

The Reuters/University of Michigan preliminary consumer sentiment report for March unexpectedly fell to 72.5 from 73.6, pushing the yield on the 10-year back down.  The final report showed business inventories for January were unchanged.

Although mortgage rates ticked up during the week ended March 5, the Mortgage Bankers Association said that purchase applications rose 5.7%, while refis were off by 1.5%.  Some believe purchases will stay healthy as home buyers rush to meet the new tax credit deadline.

Unlike last week, there are several reports coming out that could influence trade, for better or for worse.

This week begins with Monday’s NY Empire State index on manufacturing conditions for March.  It’s expected to fall to 23.45 from 24.91, which could encourage buying in Treasuries.

However, trading could be subdued as this is the day prior to the Fed decision on interest rates.  Although no rate hike is expected, the markets will be looking for any clues about when that might happen.  They especially want to know if rates will remain low “for an extended period.”  This phrase probably won’t be removed on Tuesday, but when it is a big sell-off will likely follow.

Earlier in the day, data on February housing starts/building permits are due, with declines expected in both categories.  Starts could fall to an annual rate of 587,000 units from 591,000, while building permits are expected to decline to an annual rate of 587,000 from 591,000.

Separately, industrial production in February is expected to come in flat versus a 0.9% increase in January.  Capacity utilization should dip to 72.3% from 72.6%.  These reports could energize buying in bonds.

Wednesday the producer price index, or PPI, which checks for wholesale inflation, is not expected to find any.  It should show a 0.1% decline for February — far better than the energy-induced 1.4% rise the previous month.  Likewise, the more closely watched core rate, which eliminates food and energy prices, is expected to climb by a tame 0.1% versus 0.2% in January.

Thursday’s consumer price index, which checks retail price inflation, should show similar results.  Both the index and the core rate are expected to rise 0.1%, which bond traders should like.

First-time claims for the week ended March 13 are unpredictable.

The Philly Fed index on March manufacturing conditions could affect trading if it moves sharply up or down, as it has lately.  Right now it sits at 17.6, so three or four points either way could move Treasuries.

Leading economic indicators for February should rise 0.2% — a little slower than the 0.3% increase in January.  This report, however, usually has little impact on trading — nor does business inventories for January, which could rise 0.1%.

No reports are scheduled for Friday.

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Legg Mason Fund Manager: How to Beat the Market

Mar 5

Posted by admin in business, commodities, investing, investment gurus, mitigating risk, mutual fund, stocks, strategies, warren buffett, wealth | No Comments

Everyone wants to beat the market.  Very few investors do.  Your friends at Black Swan Management, LLC are always on the lookout for information that will make the road to the riches a little bit smoother.

If the stock market doesn’t go up much, your index fund won’t bring big returns. Robert Hagstrom of investment firm Legg Mason says you should use actively managed funds.

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SAC

Mar 5

Posted by admin in people, stocks | No Comments

I love to follow the lives of people that are doing the same things that I am doing in a magnificent way.  You can learn alot from following successful people in your chosen industry.  I read an article  the other day on cnbc.com on Steven A. Cohen of SAC capital and I not only learned a bunch but he put haphazard information in perspective for me and I have made a few bucks trading like him.  Lesson, if you want to be at the top of your game study and learn from people at the top of theirs.  Read his story he is one of my favorite people today.  Thanks Steven for the knowledge.

Keathel H. Haynes III, Chief Investment Officer

http://www.blackswanmanagementllc.com/

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Cohen grew up in Great Neck, New York, where his father was a dress manufacturer in Manhattan’s garment district, and his mother was a part-time piano teacher. He took a liking to poker as a high school student, often betting his own money in tournaments. Cohen credits the game to teaching him “how to take risks.” Cohen received a B.S. in economics from the Wharton School at theUniversity of Pennsylvania in 1978. While in school, a friend helped him open a brokerage account with $7,000 of his tuition money.

After Wharton, Cohen got a Wall Street job as a junior trader in the options arbitrage department at Gruntal & Co. in 1978, where he eventually managed a $75 million portfolio and six traders.

His first day on the job at Gruntal & Co., he made an $8,000 profit. He would eventually go on to make the company around $100,000 a day. Cohen was running his own trading group at Gruntal by 1984, and continued running it until he started his own company, SAC.

In 1992, Cohen started SAC Capital Partners with $20 million of his own money; today the firm manages $14 billion in equity.

Originally known as a rapid-fire trader who never held trading positions for extended periods of time, Cohen now holds an increasing number of equities for longer periods of time.

Wealth

Forbes Magazine estimates Cohen’s fortune at $11.4 billion in 2009, ranking him the 27th richest among the world’s billionaires..

In 1998, the Cohens purchased their 35,000 square feet (3,300 m2) home on 14 acres (57,000 m2) in Greenwich, Connecticut.

His 2005 compensation was reportedly $1 billion, considerably higher than his 2004 compensation ($450 million). ]2001 compensation ($428 million) and 2003 compensation ($350 million).

In addition, Cohen owns 7% of search engine Baidu.

Cohen lives in Greenwich, Connecticut, with his wife, Alexandra, and seven children — two being from a previous marriage.

Cohen serves on the Board of Trustees of Brown University and the New York-based Robin Hood Foundation.

In 1999, the publicity-shy. trader granted one of his first on-the record interviews to Daniel Strachman for his book Getting Started In Hedge Funds (Wiley 2000).

In December 2009, Steven A Cohen and his brother Donald T Cohen were sued by Steven’s ex-wife Patricia Cohen for racketeering and Insider Trading Charges.

Art collector

Cohen began collecting art in 2000, and over the past several years has become a prominent collector, appearing on Art News magazine’s “Top 10″ list of biggest-spending art collectors around the world each year since 2002, and Forbes magazine’s “Top Billionaire Art Collectors” list in 2005. To date, Cohen has bought around $700 million worth of artwork; in 2003, the New York Times reported that in a 5 year period, Cohen spent 20% of his income at art auctions. He is reportedly building a private museum for some of his artwork on his Greenwich property. In the winter of 2005 it became known that in 1999 Cohen had bought Edvard Munch‘s “Madonna”. Reportedly this was for $11.5 million, a record price for any Munch painting to this date.

His tastes in collecting changed “quickly” from Impressionist painters to contemporary art. He also collects ‘trophy’ art—signature works by famous artist.—including a Pollock “drip” painting fromDavid Geffen for $52 million and Damien Hirst‘s The Physical Impossibility of Death in the Mind of Someone Living, a piece that the artist had bought back from Charles Saatchi for $8 million. In the last two years, he reportedly paid $25 million each for a Warhol and a Picasso. He is a top patron of the Marianne Boesky art gallery.

In 2006, Cohen remarked that repairing his suspended shark artwork, a cost estimated to be a minimum of $100,000, was an “inconsequential” expense. Since the shark itself is over 10 years old, it has begun to rot and requires replacement. The replacement shark has already been caught. once the exhibit is fixed, Cohen will have it moved into his SAC office Cohen has also placed Marc Quinn’sSelf,a head sculpture made of frozen blood, in the SAC lobby.

In addition, in 2006 Cohen bought a landscape entitled “Police Gazette” by artist Willem de Kooning for $63.5 million from David Geffen. Also in 2006, Cohen attempted to make the most expensive art purchase in history when he offered to purchase Picasso‘s Le Reve from casino mogul Steve Wynn for $139 million. Just days before the painting was to be transported to Mr. Cohen, Mr. Wynn, who suffers from poor vision, accidentally thrust his elbow through the painting while showing it to a group of acquaintances inside of his office at Wynn Las Vegas. The purchase was cancelled, and Mr. Wynn still holds the painting. In November 2006, Cohen purchased another Willem de Kooning painting, Woman III, from David Geffen for $137.5 million.

http://en.wikipedia.org/wiki/Steven_A._Cohen

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Keys to Success (Part One)

Feb 5

Posted by admin in business, business startup, internet business, investing, Leadership, mindset, mitigating risk, real estate, stocks, strategies, wealth | No Comments

“I do not have superior intelligence or faultless looks.  I do not captivate a room or run a mile under six minutes.  I only succeeded because I was still working after everyone else went to sleep.”
- Greg Evans

Why do some people ‘’make it” and others can’t?  What are the secrets to success?  Why didn’t all of that schooling teach you anything about money?  For the last 20 years, I have been observing and studying the lives of successful individuals and I have noticed some commonalities that may provide some insight for those of you looking to increase the odds of success in whatever endeavor you may be pursuing.  I will be talking about these insights in this series, which we at Black Swan Management, LLC like to call The Keys to Success.

Anthony Sills, CEO
Think about the last time you really accomplished something big . . . what was it? Why were you successful?

Some people believe that success is really about being in the right place at the right time, and they’re (kind of) right. But that’s not really success; it’s more of a mirage.  Successful people are in the right place at the right time…but not by accident.

Everyone wants success, but few find it.

Each year hundred books are published about your lack of success. And each year these books promise to get you on the right track for a life of achievement. Millions are spent on training materials, seminars, and courses. And while some are no doubt beneficial (I have read hundreds of these books and gone through dozens of these courses personally), much of the information is destined to collect dust on a shelf in the closet or to be sold as a used book at a garage sale for most people.

And the majority of the people who buy these programs and literature fail. Why?

They want to be successful….just not bad enough.

Think about it.  If you ask 100 people if they would like to be a millionaire, or if they would like a new car, many of them will say ‘yes’ but if you ask the same 100 people if they would be willing to work an extra ten hours a week to get that $1M or that new car, how many would say ‘yes’?

There is no ‘silver bullet’ to achieving your goals.  The real difference between those who ‘make it’ and those who don’t is HARD WORK.  The love of what you do, combined with your belief in what you do, will not determine your success. It will determine how hard you will work and how dedicated you will be to achieve it. Success just shows up from there.  Here are some suggestions from your friends here at Black Swan Management, LLC to get you started on your journey of personal development—and remember, the keys to success are hard work, belief in yourself and your abilities, persistence, and the determination to succeed!

  • You’re never done learning and school is NOT your only teacher. Most successful individuals are lifelong students.  What do they study?  Their craft, human nature, the world around them, history, business strategy, communication skills, and more.  If you are committed to achieving big things in your life you must also commit to staying abreast of developments in your field and learning how to be successful.  It wouldn’t hurt to know more than your competition either.  Comedian, Chris Rock only has a G.E.D. but he reads several newspapers every day.  Maybe that’s how someone with a high school education became one of the most successful (political) comedians.  If you think you’re not smart enough or you think you learned it all in school consider what Jim Rohn says:  “Formal education will make you a living. Self education will make you a fortune.”
  • Accept responsibility for your own success. Many people believe they deserve rewards before they’ve proven themselves through performance.  In fact, very few people accept personal responsibility for their success.  If you aren’t where you want to be in life ask yourself ‘why not?’  It’s not your spouse’s fault, your employer’s fault, or your family’s fault.  If you aren’t living the life you want to live it is no one’s fault but your own.  When you accept this universal law and come to terms with its implications, you will be light years ahead of where you are today.  Take a few minutes and think about problems you face in your life.  How many of them have you been blaming on other people?  Stop being a victim.  Grow up.  Take charge of your life and assume responsibility for your success and happiness.
  • Learn how to live with risk. I do not know anyone who has succeeded who has not been able to assess and take a risk and then live with the consequence – success or failure. Risk avoidance is a sure way to remain mediocre; being safe does not promote personal growth. Failure or making a mistake is not a bad thing; it’s proof you were exploring new ways to do something, and that’s better than safe success. We learn from our mistakes, not our successes. Really creative people embrace risk. They can sustain a high level of ambiguity; they do not need to know where they are. They do not mind being lost, for they call it just taking the longer, more interesting way around.
  • Persistence, Persistence, Persistence. Even when you don’t know how you will achieve your goal you must keep pressing forward.  Nothing says persistence like Ray Kroc, the kitchen wares salesman who in 1954, at age 52 and in poor health, began a new age in franchising, changed the American landscape, and, for better or worse, diets in much of the world.  If you don’t know, Kroc is the entrepreneur who became the national franchising agent for McDonald’s (which had one location at the time) and developed the system that would enable McDonald’s to expand worldwide. Missing the point?  Ray Kroc was no spring chicken when he began this phase of his career.  Many people doubted him.  He had disagreements with business partners, problems with franchisees, and many other challenges as he pursued his goal.  Did he quit? Of course not.  Today, McDonalds is the single largest owner of real estate in the world. It owns more property than the Catholic Church.  McDonald’s also serves more than 47 million customers each day all around the world! 
  • Discipline yourself to save money, even on the most modest salary. You will never ‘make it’ if you don’t have discipline.  And you will never become a successful entrepreneur, investor, or business owner if you can’t manage your money.  We at Black Swan Management, LLC believe wholeheartedly that one of the major keys to success is saving a portion of your income, even if it seems like such a small amount it won’t make a difference.  As The Richest Man In Babylon teaches us, a part of all you earn is yours to keep.  If you don’t save money, you are working for others, not for yourself.  Not to mention, you will be at the mercy of circumstance and other people which is a rough road to travel.

We’ll be discussing more tips and techniques for personal development and being successful in Part Two of The Keys to Success but for now just remember that, as Jim Rohn  says, “When you know what you want, and you want it badly enough, you’ll find a way to get it.”

About the Author

Anthony Sills, M.B.A. formerly traded FOREX from the Atlanta Financial Center and has worked for stock advisory services, brokerages, Fortune 100 companies, and national banks. Mr. Sills is currently a licensed loan officer and freelance writer. You can reach him at anthony@BlackSwanManagementLLC.com.

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Millionaire Mindset: How to Become a Millionaire

Jan 29

Posted by admin in business startup, investing, investment gurus, mindset, mutual fund, real estate, stocks, strategies, wealth | No Comments

How to Become a Millionaire

Lotto vs. Lightning?

Wealth creation isn’t as easy as buying a lottery ticket.  (Your chances of winning the lottery vary depending on which lottery you play, but as a rule of thumb you are still 6 to 45 times more likely to die from being struck by lightning than you are to win the lottery.)   In fact, winning the lottery will never make you wealthy!

Wealth is defined as “having wealth”, “being affluent”, and “characterized by abundance”.  Too many people focus on the money and not the abundance.  That is why most of the people who do win the lottery lose all their money and end up miserable.  In a 1999 survey conducted by the Consumer Federation of America and Primerica, 40% of Americans with incomes between $25,000 and $35,000 — and nearly one-half of respondents with an income of $15,000 to $25,000 — thought winning the lottery would give them their retirement nest egg. Overall, 27% of respondents said that their best chance to gain $500,000 in their lifetime is via a sweepstakes or lottery win.

“If Americans understood that their chances of winning a big lottery jackpot were 10 to 20 million to one but that they could accumulate hundreds of thousands of dollars through regular saving, more families would put the $50 away rather than spending it on gambling or unneeded consumption,” said Joseph Plumeri, chairman of Primerica.

In our culture, there is a widely held belief that money solves problems. People think if they had more money, their troubles would be over. That’s not necessarily true.  There are two components to money. The first is the psychology of money (i.e.; how you feel about money). The second is the rules of money like tax codes, money allocation, etc.  The goal is to form a wealth creation plan that integrates the two components.

Research has shown that wealth creation has nothing to do with luck, education or intelligence. The truth is that wealthy people understand the principles of accumulating wealth and simply put them into action.  Like most things in life, wealth begins with a decision. You must choose to build wealth.  If you don’t control your money, money will control you! Controlling money simply means taking responsibility for what you have. You need to know where your money comes from, how much you have, and where it’s going.

Wealthy people use the “pay myself first” principle. They usually take 20% from their earnings and bank it or invest it in a separate account every payday for absolute emergencies. These untouched savings accounts earn compound interest (interest on interest) and their money keeps increasing.

Strive to increase your income and reduce your expenses.  Giving freely of your time, money and resources to those less fortunate contributes immensely to society and is your guarantee of receiving love, joy and peace. If everyone contributed in this way abundance would be commonplace.

Don’t believe me?  Here’s what some of the most successful business leaders have done.

  • First, you must do work you love and focus on more than money.  American industrialist, John D. Rockefeller, who defined the structure of modern philanthropy said, “The man who starts out simply with the idea of getting rich won’t succeed, you must have a larger ambition.” Sir Richard Branson, of Virgin fame advises “Have fun, work hard and money will come. Don’t waste time – grab your chances. Have a positive outlook on life. When it’s not fun, move on.”
  • Second, spend less than you earn & invest the difference. Sound too simple? Warren Buffett one of the most successful investors in history (and one of the richest men on Earth) says that “there seems to be some perverse human characteristic that likes to make easy things difficult.” Of course Buffett filed his first income tax return, deducting his bicycle and watch as a work expense for his work as newspaper delivery boy at age 13!
  • Safeguard your assets from loss and provide in advance for the needs of old age/retirement and the protection of your family.  If you make millions of dollars but fail to protect it you can still end up with nothing!  American two-time former World Heavyweight Boxing Champion, Olympic gold medalist, and successful entrepreneur George Foreman has been quoted as saying “The question isn’t at what age I want to retire, it’s at what income.”
  • Work hard.  News flash—if wealth creation was easy everyone would be wealthy!  Becoming wealthy is a simple process, but not an easy task.  This is mostly because people are not committed to wealth creation and do not do what is necessary to become wealthy.  Andrew Carnegie, one of the most famous captains of industry, who went from ‘rags to riches’ claimed that “…the average person puts only 25% of his energy and ability into his work. The world takes off its hat to those who put in more than 50% of their capacity, and stands on its head for those few and far between souls who devote 100%.”

Remember, when it comes to wealth creation and attaining the millionaire mindset, hope is not a strategy.  Follow in the footsteps of other wealthy individuals and observe the rules of money and you will be on your way in no time.

About the Author

Anthony Sills, M.B.A. formerly traded FOREX from the Atlanta Financial Center and has worked for stock advisory services, brokerages, Fortune 100 companies, and national banks.  Mr. Sills is currently a licensed loan officer and freelance writer.  You can reach him at anthony@professionalpenwriters.com.

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