December 2011 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

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  • Best Critique of Obama I’ve Ever Read

    The holidays sneaked up on me faster than usual this year, what with a couple of extra business projects that required a lot more time than I expected over the last few months. Given a number of year-end deadlines, I have elected to reprint an excellent article today by Peter Ferrara that is perhaps the best critique of President Obama that I have ever read. If you are an Obama fan, you probably don’t want to read this; on the other hand, maybe you should.

    Ferrara succinctly examines Obama’s upbringing, his early professional life, his liberal ideology, his ascendency into politics, his becoming President of the United States and his policies since occupying the White House. This is a very interesting and insightful read, especially in light of the challenging economic and financial times we find ourselves in.

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  • The Quest for Low-Risk Retirement Income

    Over the years, our client surveys have consistently shown that there is a high degree of interest in investments that can be used to provide retirement income. As the Baby Boom generation continues to age, this demand is going to become larger and larger.

    Fortunately, the Wellesley Convertible Bond Program that I highlighted earlier this month can be an excellent vehicle for taking income. Since convertible bonds are a hybrid of stocks and bonds, they have the potential to provide the growth necessary for a stable retirement income investment as well as manage the risk of loss during down markets. If you or someone you know is at or near retirement, this is definitely a program you should consider.

    I also want to wish each and every one of you a Merry Christmas. With both of my kids now in college, Christmas has become extra special as they come home to celebrate during their break from school. It's like old times, even if just for a while.

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  • Income Inequality and the Top 1%

    This week we're going to dive head-first into the discussion about the top 1% of households by income. While there have been various definitions of the "rich," that should be taxed at higher rates, the Occupy Wall Street crowd has definitely honed in on the top 1% as the embodiment of everything wrong with America in general and capitalism in particular.

    First, I have reprinted an excellent article by Alan Reynolds that brings a recent CBO report about income inequality into a much better focus. It seems that the CBO cherry picked some data to show income disparity is growing when, in reality, it has diminished over the last two years.

    I will then provide a further analysis on the long-term capital gains and dividend tax rates which are drawing criticism based on pleas from Warren Buffett to be taxed at higher rates. I'll then end up with a dozen of the most popular tax breaks that are available to virtually anyone reading this E-Letter, as well as the cost of each in lost revenue. The unfortunate result of my analysis is that higher taxes for the top 1% of households isn't likely to make a meaningful dent in federal budget deficits and could cost jobs.

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  • Why Convertible Bonds Make Sense Now

    This week, we revisit Wellesley Investment Advisors. You may recall that Wellesley has been very successful by investing in convertible bonds, but only certain types of convertible bonds. Wellesley invests primarily in convertible bonds that have "put" options which allow them to exit positions prior to maturity. This gives Wellesley a big advantage as you will read in today's E-Letter. I happen to believe that most sophisticated investors should have an allocation to convertible bonds in their portfolios, and I also believe that Wellesley Investment Advisors is the place to be. With a 16-year track record and average annual returns of almost 10%(net of all fees and expenses), I believe most investors reading this should take a serious look at Wellesley right away. (Past performance is not necessarily indicative of future results.) I feel that the Wellesley Limited Risk Investing program could be an excellent choice during the current uncertain market environment, especially given Wellesley's opinion that convertible bonds may be a hot place to be in 2012. I think you owe it to yourself to at least check out this program to see if it can complement your other allocations. My recommendation to you today is that you take a serious look at Wellesley right away so that you can get your account opened before the end of the year. That way, you will have the benefit of professionally managed convertible bonds in your portfolio to start the New Year. Don't procrastinate, call today 800-348-3601.

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