Giving up on Emerging Markets in 2014?

Investors are starting to capitulate with foreign emerging markets investments.

In 2009, the story was that emerging markets would obviously do better than the US. There was so much more room for them to grow….and China was buying all our debt.  Soon they would own us.

By Mid 2013, the story had changed. Emerging markets had underperformed the US for several years. Now might be a buying opportunity! Valuations looked good.

Now at the beginning of 2014, investors are starting ...

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2013 in review

2013 has closed out.  Let’s take a look at what happened.

  •  The S&P 500 had its best year since 1997
  •  Foreign Emerging Markets had negative returns
  •  Gold, precious metals and other commodities had a horrible year
  •  Interest rates came up a little, but didn’t get out of hand
  •  Inflation stayed comfortably low

If someone had told you this was coming as 2012 closed out, would you have believed them? Probably not.

The good news is that you don’t have to be able to predict ...

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Listen to Henry Blodget. Listen to Henry…

A little more interesting coverage on index or passive investing. click here.

I am linking to this video because it contains some of the bad arguments against indexing and also some good responses.

So watch the video, and listen to Henry Blodget. And whatever you do, don’t listen to the guy with the buzz cut and the glasses. If you listen carefully, you realize he basically ...

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Fama and Shiller on Financial Bubbles

NPR interviewed Fama and Shiller on financial bubbles.

This is fairly well done and worth a listen. Generally the financial media completely screws up stories and interviews, but this one actually gets down to the real subject at hand.

You can listen by clicking here.

Notice that Shiller dances around when he is asked direct questions about how to define a bubble. He still can’t really do it.

My favorite quote from the interview ...

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Can’t Wait to See the Lawsuits with Bitcoin

When this Bitcoin thing finally comes down, there will be lawsuits all over the place.

I wonder if any of them will be criminal. Maybe. Maybe not.

If you can’t see why this thing isn’t going to work long term, I don’t know what to say to you at this point.

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Another Way Indexed Insurance Could Bomb

“Heads you win, tails you win” is one of the favorite sayings of the insurance salesman.

I’ve seen a lot of insurance products promoted this way, as is the case with indexed insurance, the popular product of today’s era. It is a complex insurance product, packaged in way that makes the policy owner believe they can’t lose. If the stock market goes up, they make money. If the stock market goes down, they stay even.

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Indexed Insurance – This Probably Won’t End Well

Indexed life insurance and annuities are hugely popular. I suspect they will sorely disappoint their policyholders over the long term.  The reason? Well, this is what always happens with these waves of popularity in life insurance.

Background

To understand why indexed insurance will likely be a lemon, you have to understand some history about other insurance products.

Variable Insurance (Late 1990s and Early 2000s)

During this era, variable insurance became popular. That is, insurance where your cash value can be invested ...

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Interest Rates Are Not Sure to Rise

It really, truly, is not a sure bet that interest rates will rise in the near future, although most people you ask would beg to differ.

Interest rates are up a bit this year. Does that mean they will keep going up?

I remember in 2002 when interest rates hit record lows. The general narrative at that time was, if we knew one thing, it was that rates would be ...

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