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Real Money Matters with Matt Johnson

Real Money Matters with Matt Johnson

Sage Capital Advisors is an organization that has a passion for making a difference. Sage’s Matt Johnson and Jan Ozenbaugh tell their story on Real Talk San Diego, ESPN 1700AM. The podcast provides current market commentary and how that directly corresponds to better planning with your investments. Find out strategies that will align with your financial goals and needs. Take a listen! Questions or concerns? Experience real investment guidance and connect with our team today! Sage Capital Advisors, LLC 5672 La Jolla Blvd. La Jolla, CA 92037 (858) 459-0172... read more

Turning around the Titanic

For the better part of the last 30 years interest rates have been on a downward sloping trajectory. Going back to finance 101, we know that when interest rates go down, the prices of bonds go up. So while we have had many short term rallies in rates (most notable in the 90’s to cool off the tech bubble), the overall trend for bond prices has been positive. Until recently it seemed that sentiment and trend would continue on in perpetuity. Then Federal Reserve chairman Ben Bernanke decided the party was getting a little loud and knocked on the door to tell everyone to “turn it down” a little.  Specifically Bernanke alluded to the fact the the governments policy of quantitative easing, or Wall St jargon for buying bonds to keep prices high and interest rates low, was coming to an end. The news shook the bond markets in a big way with bellwether tracking indexes falling sharply. As a ripple effect of the news the Feds policy was now going to change, US stocks sold off for fear of slower growth. What is an investor to do you ask? While stocks have provided plenty of opportunities in recent years it hasn’t been without volatility and some rough seas. Investors who have fled stocks looking for the safe harbor of bonds now face a new dilemma.  While owning individual bonds outright will pay annual interest payments, the principal value is subject to significant downside.  Holding a particular bond issue to maturity, assuming creditworthiness of the issuer is maintained, will pay back the face value of the bond. But what... read more
Post Office Gets A Day Off

Post Office Gets A Day Off

The United States Post Office announced today that they will be going to a 5 day work week and stopping Saturday deliveries.  The reasons why are obvious, I mean if you ran a company that lost 25 million dollars a day, wouldn’t you do something to stop the bleeding?  It’s no secret that the USPS is a financial mess. Last year it lost a whopping $15.6 billion and is facing annual budget deficits of $21 billion by 2016. One way the postal service has been trying to reduce those massive losses is to scale back the number of days it delivers mail.  Postmaster General Patrick Donahoe said the post office would no longer deliver or process first-class mail on Saturdays — though it would continue to deliver packages and keep post offices open six days a week. While there are some ripple effects in the stock market if the entire postal system were to collapse, some which might even be good for a few companies. Image if FedEx or UPS were to take over the reigns for getting the mail where it needs to be. Do you think the fact they have to answer to shareholders (vs having a blank check from the government) would give them a better chance of succeeding or even turning a profit. My answer is a resounding YES.  Unfortunately that is not the case, and our national mail system is a giant vortex that is sucking resources on the path to its ultimate demise. My point is not to rant, or point fingers to a once great national program that was major reason for... read more
Market Lessons from the SuperBowl XLVII

Market Lessons from the SuperBowl XLVII

The Superbowl XLVII just finished and congratulations to the Baltimore Ravens for the exciting victory. As a sports fan in general a game of this magnitude is always exciting, even if your team is not the one playing. While I could go on and on about sports in general I thought there were a few interesting takeaways from the game that relate some of the basic tenets of successful investing. The first thing is to get off to a strong start. When investing for retirement or saving for a college fund sustaining a large negative drop in your investment portfolio early on  can have significant consequences to the long term success. Just as the Ravens built a sizable 21-6 lead in the first half of the Superbowl, when the rough patch hit in the second half they had enough advantage to weather the storm.  If your portfolio is not being managed correctly for the current market environment then a major loss will create a huge hole. Future gains will have to be used to repair that hold, instead of creating new wealth or growth in your account.  The 49ers outscored the Ravens 25-13 in the second half but the deficit was already to big to overcome based on the strong start by the Ravens. Don’t let your portfolio get too far behind or catching up will be difficult and promote greater risk taking in an attempt to get even. Next takeaway from the game is to expect the unexpected. In the case of tonight’s Superbowl, the start of the second half was met with an unexpected and untimely power... read more

Apple Decline Continues, But May Be Overdone…

While the decline from the peak has been swift, the last few trading sessions have really put the pressure on this technology bellwether.   Historically, stocks that decline 30% or more are certain to give investors heartburn, even if watching it on their iPads, moves like this are not unprecedented. To magnify the issue the decline has totalled over 200 points (Apple peaked just over $700 in September,and as of today trading under $490 creating even greater sticker shock. Our friends over at Bespoke.com recently posted an interesting chart of the recent price decline of Apple. The chart below shows the ten declines of 20% or more that AAPL has experienced over the last ten years.  The financial crisis of 2008 sent most stocks down 40%-50% or more, but as you can see most of the historical declines for Apple have been in the  20-30% range. With this in mind the current pullback may be getting a little long in tooth.  There is an old saying on Wall Street that says “dont catch a falling knife”, and stocks that are low can always go lower. This will be one to watch for some consolidation and a potential change in trend from negative to positive. Stay tuned.  ... read more

What Would You Do If Money Was No Object?

This is a powerful and short video.  Often when we initially meet with new clients, their main concerns are ancillary issues such as: improving investment return, government bonds vs muni bonds, or should I own physical gold or not. These types of questions are valid, put should be pursued after the boiling down exactly what their desired outcome is.  Sure making more money or  is always an objective, but the truth is it is not the actual money, but what that actual money provides. Things like freedom of time to travel or spending more time with loved ones.  I found this very short video to be a simple and interesting reflection on what it is we really want in life.  What is it that you desire?  ... read more

Redskin Rule Predicts the Presidentail Race Winner

Some of you may have heard of the now infamous ‘Redskin Rule’ which is a statistic that goes back 70 years and has predicted with amazing accuracy the winner for the Presidential Election. The discovery was made by Steve Hirdt, an executive vice-president of the Elias Sports Bureau, who has worked on the Monday Night Football staff — a total of 31 years. On Oct. 30, 2000. Hirdt was in a Washington, D.C., hotel room, preparing for the upcoming MNF match up between the Washington Redskins and Tennessee Titans. He was hoping to find something specifically interesting for color commentator Dennis Miller to discuss with the presidential election coming up on Nov. 7. What he discovered was an eye opening coincidence, the last 18 Presidential elections were accurately predicted by the outcome of the Redskins last home game before the election. According to a recent post on Yahoo Sports the rule states: “…..that whenever the Redskins won their last home game prior to the presidential election, the incumbent party retained the White House, and whenever the Redskins lost their last home game prior to the election, the out-of-power party won the White House.” This past Sunday the Washington Redskins LOST at home to the Carolina Panthers. If the theory of NFL prediction is to carry over to the 2012 election than Mitt Romney would be the winner. Click on the image below for to enlarge the data from the past elections. To conclude, if the Redskin rule holds up Mitt Romney would be the next president of the United States. My experience with these types of “coincidences”, either political or sports related  or other any other event as... read more

Sept to remember but dont head to Oktoberfest just yet

The final days of the 3rd quarter are approaching  as we enter the last week of September. Historically September has been the worst month of the year in for investment returns. Moving onto the 4th quarter the US market has been relatively unscathed with year to date gains well into the double digits. Certainly the election this November will have a major impact on the sentiment and longer term trend of the economy. In the meantime investors anxious to improve returns, over the lowly money market rates, continue to drive the stock market up. Traditionally October has been a dreaded month due to some of the remarkable crashes of 1929 and 1987, and the financial collapse in 2008, but the month has typically been a good one. In 14 of the last 20 years the Dow Jones Industrial Average has produced a positive return for this month. The average gain over for October over that same time has been 1.75%. Its the third best month behind April and November. In addition to the stats on October the entire 4Q has been the strongest quarter of the year based on recent history.  In the last 20 years the 4Q has produced a positive return for the Dow 80% of the time, with an average monthly gain of 5.29%. The anticipation of the coming year, and positive earnings guidance (both up, or lowered “less” than expected) provide a tremendous amount of optimism. While Apple is not part of the Dow (yet) the fervor around the launch of the iPhone5, which I finally succumbed to, has provided a sense of confidence in the US consumer. Companies are banking on a strong retail... read more

Half way done in 2012, the roller coaster continues.

For those of you that have a friend or family member that has a birthday on or very close to Christmas then you know that it is imperative to have TWO celebrations. It is not an option to have one “big celebration” and tie to two together.  I bring this to our readers attention because someone I know who does have a birthday on the 23rd of Dec makes me take them to Disneyland or another amusement park every year. Now everyone knows that there is no place like Disney, but with that comes hours of gut wrenching rides and roller coasters. Those which I am not so fond of. It appears that the 2012 first two quarters have been all to similar to that annual roller coaster trip to Disney for the stock market. News from overseas has been a key contributer to the ups and down of  stocks both here and abroad. The EU meets, the market goes up. The EU posts a statement on the results of the meeting, the market goes down.  This is coupled with investor optimism that the election will potentially create some fiscal reform and get the economy back on track. The results has investors head spinning, individual and institutional alike. Since the start of the year the S&P500 soared with gains over 12% at the start of April. This was followed by a painful 10% correction during the preverbial “sell in May and go away” seasonal decline that is all to familiar in recent years.  European news continues to twist the market around and send investors for a loop.  The 2Q earnings... read more

The only thing you need to know about bonds

Throughout the course of history there have been bubbles,manias and collapses that repeat themselves over and over. Of the most recent as you will recall was the dot-com eras euphoric rise and subsequent collapse. This was followed by the real estate bubble and the financially engineered banking collapse.  These events are important for two reasons. The first being that the evidence is usually so glaring its usually comical, after the fact. Yet few people have any mechanism to adapt to the switch when the proverbial music stops.  The second is that when investors are in the middle of one, times are too good to “rock the boat”. The mentality of a typical investor that “it wont happen to them” blinds people as they align themselves with the crowds. So lets see how this relates to our catchy headline on bonds. The only thing you need to know about bonds is: When interest rates go UP the value of bonds go DOWN. Below is a graph of the yield of the 30 year Treasury Bond going back the last 100+ years.                                           (chart courtesy of observationsandnotes.blogspot.com). “Investors expecting bond funds to perform as well in the next 10 years as they have in the last 10 will be disappointed…..  However, the stellar performance of bond funds — especially longer-term funds — as yields have declined over the last 30 years will not be repeated anytime soon. Not only that, there is even the risk of negative returns. As investors look at their statements going back the last few years, and especially over the “lost decade”, they see bonds that have... read more