Switching Cash from Saving Accounts to Short Term CDs

Today I checked CD rates and found one month CDs paying 1% that compares to my brokerage and bank savings accounts paying 0.1%.    So I am switching our cash funds to the short term (one to three month) CDs.  

Yes, I know I can get 1.2 to 1.3% from online savings accounts.  For simplicity, I don't want to open another savings account at a different institution.  So my second best option is just to invest in CDs, which mature in a short time so that the cash always available.

I never thought I would be excited about getting 1% interest on my short term savings.

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This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

My Signs of Stock Market Euphoria

"Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria." ~ John Templeton 

Although U.S. Market are at all time highs, I still don't think there is euphoria, despite such claims by numerous pundits.

Here are my personal signs for euphoria that I will be looking for:

• All stocks rise significantly for an extended period (at least 1-2 months).  Currently, there are still many laggards and falling stocks in the market.   During euphoria, people will buy any and all equities, driving up all stocks.
• Family, friends and acquaintances initiate conversations about stocks and investing with me.   Almost no one I know wants to talk about investing and stocks.  Usually, I initiate a conversation since I am interested in what people think.
• The bears capitulate.   I know several people in bear funds, or in all cash since they think the market is due for a big fall.  When they throw in the towel...

Although not a necessary sign, if my company stock starts gaining 40% a year, as it did in the 90s, I will assume euphoria has arrived.

For now, I think there is still quite a bit a skepticism, so the bull market may have a way to go.

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This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Still Irrational But Not Exuberant

A little over a year ago, I posted Irrational But Not Exuberant.   Today, that point of view is still true.   To many people, the market is ready for a correction or even a major decline.   Given all the uncertainty, there are no fundamental reasons for the market to be this high or even go higher.

However, I still see virtually no signs of exuberance.   In fact, I see many signs of anti-exuberance: people in all cash, people in bear market funds, people scare of investing in stocks.   This is still the most unloved bull market ever.

And the market continues to defy logic and grind up slowly to new highs.

Is this time different?   Probably not.  The bull market will end and become a bear market again in the future.   I just don't think it will be before the end of this year.

If this bull market lasts a little over 12 more months, it will be the longest bull market in US history, exceeding the October 1990 to March 2000 bull market of 113 months.   Given the lack of exuberance, there is still a good chance of this bull market lasting that much longer.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

A Terrible, Horrible, No Good, Very Bad Day is Coming

Someday the market will experience a terrific decline.  Mark Farber, aka Dr. Doom, has told me.  Ron Paul has told me.  Doug Kass has told me.   My brother-in-law has told me.  My mother-in-law has told me.

I agree a bear market is definitely coming.  The questions is when.

I believe the earliest will be 2018.  So far, it's looking like that.   I betting on 2600 before a significant decline. We'll see....

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This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Invest in Winners

"The trend is your friend." ~ Wall Street adage

It seems almost everyone is sure the market is about to decline, correct or crash.   Even perma bull Tom Lee is predicting a lower finish for the S&P in 2017.   People I know have bought 2X inverse bear mutual funds

For me, the best strategy is to stay invested in the winning stocks.    It seems they are hitting new highs on a frequent basis: Amazon, Priceline, Netflix and Facebook are prime examples.   Google, Apple and Tesla are close but not as strong.  

Who knows when the market will turn.   But until it does, I'm not betting against the market and staying invested in the winners.

Disclosure:  We own shares of Amazon, Priceline, Netflix, Facebook, Google, Apple and Tesla.

For more on The Practice of Personal Finance, check back every Wednesday  for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Lack of Economic Boom Keeps Bull Market Going

"Stock markets climb a wall of worry." ~ old adage

I am convinced now that Obama was great for the economy.   Because  businesses did not have confidence in the administration's policy, they under invested and the economy grew at the slowest pace ever after a recession.  Growth was slow and measured. So we never experienced the boom/bust cycle that typically occurs and leads to another recession.

Similarly, the uncertainty with Trump may also be very good for the economy.  The dysfunction exhibited by the Republican party, despite controlling the Executive and Congressional branches is keeping the economy from being overheated.  The economy continues to grind up slowly.  And so does the stock market.

In another eight years, staying invested in the stock market may be the smartest thing anyone ever did.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Looking for Euphoria

The final stage of a bull market is euphoria - when everyone's accounts are going and people are investing as much as they can (and more) into the stock market.   I am very sensitive to the stage of euphoria since I retired in 07 and planned on the market going up for another 10 years. Instead the market crashed the next year.  Having survive a big downturn in our first year of retirement and clawing back the over 10 years has made me exceptionally cautious.

Here are the signs of euphoria that I am watching for:

• Everyone is talking about the stock market.   Not.   All my spouses relatives, who were all made money as speculators in the dotcom boom, have no interest in stocks anymore.   At a neighborhood cookout, I couldn't even get people who are in the business to have any interest in talking about stocks.  The only hint I have is a neighbor telling me she has been "watching" NVDA.
• All stocks are rising.  Not.  There are still a large number of stocks declining and many stocks that have fallen previously are still near their 52 week low.
• There are no more bears.  Not.  I still see a number of bears and significant bearish sentiment.   I know one person that has sold all his equities and has invested in a 2X bear fund.  When there are no more bears, it's a sure sign that euphoria is near or happening.
• FOMO - Fear Of Missing Out. Maybe. People start chasing high flying stocks assuming the stock price will go higher.  Stocks advance in the double digits on a frequent basis due to buyers chasing the stock.   A few stocks have advanced significantly this year and those are being chased, but not the majority of stocks.

As I see it, euphoria may be coming, but it's not here yet.  So I will continue to maintain our investments and taking some profits by trimming positions as the market keeps advancing.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial  or investment advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Procrastination Pays Off

For years, I've been considering adding a few more large stepping rocks to widen a path through our back yard wooded area.   But I never got around to it.

This spring, we decided to get rid of all the ivy in our wooded area, which I did over 6 weeks, a 5X5  square foot patch at a time.  To my surprise, I found 40-50 rocks that were 50-150 pounds in a few ivy patches.   Some were covered by years of dirt under the ivy. About half of them were the right dimension for stepping stones.  So I recycled them to the path.    Also created a couple of new paths.

So these rocks would have cost me $15 to $40 each, but I got them for a few hours of digging (and free exercise hauling stones).   Fortunately, I'm a retired guy and my time is cheap.   So procrastination paid off.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or landscaping advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Staying Invested

Despite all the negativity, I'm staying invested in the stock market.  Here are my reasons:

• All my spouse's relatives think the stock market will crash soon.   For example, my brother-in-law has purchased a 2X bear fund.  Their position is based on politics.  They all voted against Trump and are ignoring that the economy is improving.
  
• Trump has more teflon than Reagan and Obama.   Despite all the Russia issues for Trump, the stock market keeps going up.
  
• It's what George Costanza would do.

Sure the market will eventually fall.  But I think it will happen later (after the end of the year) versus sooner.  We'll see ...

For more on  The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC