There’s a Storm Brewing

There’s a Storm Brewing

   -Time to be the lighthouse and not the boat

Keith Springer Smart Money NewsletterI continue to feel like there’s danger on our shores. The massive increase in volatility in stocks over the last few months is often a sign of a storm brewing. I realize I stand practically alone on this one, as most pundits and reporters keep saying that we are just witnessing a small correction. Regular readers of this newsletter know full well that I am not just blowing smoke or crying wolf (I couldn’t think of a sea going analogy), as I have been bullish on this market since the Federal Reserve started manipulating…I mean stimulating the economy.

It’s easy to get caught up in the so-called reasoning that the Fed is only pulling back its stimulus because the economy is on sure footing. However, this is where my discipline is literally whacking me in the head and forcing me to ignore such excuses just like we should ignore the sirens from luring us to crash upon the shore to our death. (There’s a sea analogy!)

I must remember that I have been bullish these past few years because of the quantitative easing programs of Ben Bernanke, and as I have repeatedly written, we should run for the doors once it ends. Well, it’s ending. Not because it has miraculously cured the economy but because they have no choice. It is no longer doing any good while it is drastically increasing the national debt in the process.

In addition to this, we are entering the normally weak cyclical period we call sell in May and walk away. It didn’t work last year, but probably because everybody was expecting it. Funny, but this year I have not heard many talk about it, which may be a positive signal because we all know if its obvious, it’s obviously wrong!

That said, this could be just another head fake before we run to new highs. This market has had a tendency to do what no one expects so it is possible we could not get any serious decline, or we get a scary pullback and then a resumption of the bull market.

Therefore, I intend to reduce risk slightly towards the end of the next earnings announcements in a few weeks. I will not be pulling out of the market completely, just making a few tactical moves because this will most likely be just a correction and not a crash. Even though a correction at this juncture would be very normal and healthy, a pullback of 15 or 20% would be incredibly frightening and scare the hell out of investors and the media alike, which could bring back memories of 2008 and cause a run.

Investor Strategy

Corrections and bear markets may be normal, but you don’t have to ride them all the way up and down to prosper. The rotation from small caps to large and from growth to value is underway, and tactical investors will be rewarded most. Buy-and-hold, otherwise known as buy-and-hope investors will feel the pain.

If you are in that retirement red-zone, retired or within 5 years of retirement, this is no time to be a hero. Investing to get the returns you need but with the least risk possible is critical for success but difficult to do. That’s why it’s so important to graduate to a qualified retirement advisor as you plan for retirement or whether you are already there. The world of investing is a different place when you can no longer afford big losses because you have no time to make it back. In dangerous times, it’s better to be the lighthouse and not the ship.

…… and that’s where we can help. To learn more about The Springer investment approach, which is our powerful proprietary Investment Management Strategy designed to manage risk and deliver returns in any market…and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900.

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A Retirement Income Crash Course!

Smart Money With Keith Springer On KEBK

 

 

Smart Money with Keith SpringerSaving and investing for retirement is one thing.  But making your money generate income in retirement, is something altogether different.  In fact, Forbes Magazine recently stated this “is one of the most challenging aspects of retirement planning.”  But you’re in luck!  This week on Smart Money with Keith Springer, Keith reveals a crash course of some little known strategies on how to maximize your income in retirement.  You don’t want to miss this one!

Listen to Smart Money with Keith Springer News Radio, KFBK, Sunday at 11AM on 1530AM or 93.1FM!

 

 

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The Stock Market is at an All-Time High. Now What?

Strategies to Build a Rock Solid Retirement Plan

Smart Money With Keith Springer On KEBK

Smart Money with Keith SpringerThe stock market is at an all-time high.  But is a major correction around the corner?
Discover what you can do to proactively position, and protect your investments right now!

Listen to Smart Money with Keith Springer News Radio, KFBK, Sunday at 11AM on 1530AM or 93.1FM!

 

 

 

 

 

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Here’s how markets scored the March jobs report

Here’s how markets scored the March jobs report

Rate hikes are further off, depressing dollar; report not good enough to buoy stocks

MarketWatch

By Myra P. Saefong, MarketWatch

SAN FRANCISCO (MarketWatch) — The most-anticipated U.S. economic report of the month has been released, but it didn’t really offer the clarity traders were looking for after several rounds of disappointing numbers tied to the severe winter weather.

In March, 192,000 jobs were created and the unemployment rate remained at 6.7%. Economists expected nonfarm payrolls to rise by 200,000, from 175,000 in February, and the unemployment rate to slip to 6.6% from 6.7%. But the Labor Department on Friday also said hiring in January and February was a combined 37,000 higher than initially estimated.

Here’s how investors in stocks, gold, bonds, the dollar and oil scored the report, and what they expect to move markets next.

U.S. stocks : Reaction in the stock market was mostly positive, initially, with the S&P 500 Index SPX -1.21%   and Dow Jones Industrial Average DJIA -0.98%  climbing to intraday highs. But equities failed to sustain early optimism and turned broadly lower.

Anthony Valeri, Investment strategist at LPL Financial, said the report was “good but not great.”

Looking ahead, “the real test for equity markets is the earnings in the second half of the year,” he said. “The bar has been lowered significantly for the first-quarter earnings after the harsh winter and as long as we see a 2-3% revenue growth, companies will be given a free pass. But then markets need to see sustained revenue growth in the 3rd and 4th quarters to justify prices.”

The Nasdaq Composite Index COMP -2.63%  had also opened higher then fell, leading the losses. It was recently down 2.2%, far outstripping the Dow’s 0.5% loss. “This is a bloodbath for the Nasdaq,” said Keith Springer, president of Springer Financial Advisors. “If a confirmation was needed that [there’s a] rotation from small cap to large, we’re getting it today.”

Looking ahead, “gold will be volatile,” said Chintan Karnani, chief market analyst at Insignia Consultants. “Any U.S. economic number below expectations or around expectations will result in gains for gold.”

Oil: Oil futures on the New York Mercantile Exchange climbed as the employment data were “labeled a ‘Goldilocks’ number that was deemed strong enough to show the economic recovery is on track, but not so strong as to prompt a change in [Federal Reserve monetary] policy,” said Tim Evans, an energy analyst at Citi Futures.

Prices for the May crude contract  CLK4 -0.80%    may soon test last month’s lows around $97 a barrel, however, according to Casey Clark, senior trading advisor at Altavest. “With continued de-escalation [of tensions] in Crimea, look for hedge funds to drop out of their long speculative positions in May crude futures,” he said.

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The Increase in Volatility Spells Trouble for the Market

The Increase in Volatility Spells Trouble for the Market

 

-   Is a market top close at hand?

Keith SpringerThis year is only 3 months old and we have already witness a dramatic increase in volatility and 2 short but painful corrections. I can honestly say that this has been the most Difficult time in my 30 years in this industry. However, if experience has taught me anything, it’s that an increase in volatility coupled with frequent corrections usually means trouble for the market and investors.

On the economic front, we are also seeing a slight slowdown. Not a major slump indicating a recession, but on a year over year basis we are seeing a downturn indicating that the economy will grow more slowly. This coincides perfectly with the demographic forces I discuss in Facing Goliath – How to Triumph in the Dangerous Market Ahead, where the bulk of our population, the baby boomers, is well past their peak spending years. Unfortunately, the generation behind them, Gen-ex is not large enough to sustain their spending power, and the emergence of the next bull market generation, the echo-boomers, will require patience as they will not hit their spending stride for 5-7 more years.

Although we are way overdue for a major correction, I don’t think that this is the “big one”, that cataclysmic crash that everyone is waiting for. In fact it is just that reason, that so many people are expecting a crash, that it will not happen….this time around. Very simply, markets don’t crash when everyone expects them to.

I do think that the coming correction will be agonizing enough to drive people out of the market, and then sit on the sidelines waiting to get back in but missing the advance as it rallies back. That is a classic correction and rebound.

There is one other indicator leading me to be cautious. Over the last few months we have begun to see a major market rotation shift in leadership from growth to value and small cap to large cap. This is typically a defensive late bull market indicator.

Critical Market Strategy
It is time to air of the side of caution. Given the timing, this could be a “sell in May and walk away” situation. Although it’s important to remember that this phenomenon is never 100% accurate, and when you expect it to happen it doesn’t. A sound strategy for this market will require investors to be very nimble employing a tactical hands on investment management approach.

A correction of even just 10–15% will be very painful and scare the bejeesus out of everyone, including the media. You can bet I’ll be discussing it frequently on my morning TV financial updates. If we do get it, it will actually be very healthy for the markets and set up for a nice 4th quarter.

If I haven’t completely confused you by now, wait there’s more. This market has had a tendency to do what no one expects so it is possible we could not get any serious decline, or, we get a scary head fake and a resumption of the bull market.

Therefore I intend to reduce risk slightly towards the end of the next earnings announcements in a few weeks. I think earnings will be good and stocks will go higher. Although If they’re bad, run for the door. I will not be pulling out of the market completely because this will most likely be just a correction and not a crash. This will however cushion some of the downside keeping some powder dry.

Of course, if we get no correction and the market shoots higher we will have sacrificed some of the upside returns. However, I am willing to take that chance. To me this is in tune with buying life insurance. You only get paid if you die, but no one ever complains when they don’t die to get paid! If you disagree, please let me know and I will adjust your portfolio accordingly.

…… and that’s where we can help. To learn more about The Springer investment approach, which is our powerful proprietary Investment Management Strategy designed to manage risk and deliver returns in any market…and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900

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What can Baseball Teach us About Planning for Retirement

Smart_Money_With_Keith_Spronger_On_KEBK

 

Smart Money with Keith SpringerA home-run may cause a fleeting moment of euphoria for players and fans alike.  But that doesn’t ensure you’ll win the game.  And the same holds true for planning for retirement.  It’s not about one thing.  It’s about many things working together.  And when these 5 critical retirement strategies work together, the results can be significant!

 

 

 

 

 

 

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Inflation, Deflation or Disinflation…What’s An Investor To Do?

Keith SpringerTo those of us who eat, drink (yes beer and wine included), drive and turn on the heat, prices have been going up. Of course my running joke on my radio show is that no one in government or over at the Federal Reserve, which includes Janet Yellen, must do any of these because they keep saying there is no inflation.

That’s because their favorite gauge for inflation is the Personal Consumption Expenditures (PCE) Price Index which measure a basket of goods but makes adjustments for spending habits such as people substituting one good for another if the price rises to high or for seasonal factors.  Up until 2000, The Fed focused on the CPI (Consumer Price Index), but changed it to PCE inflation.

This helps those that have rising wages to cover the extra costs but hurts those on a fixed income, such as those who are retiring or already retired. Unfortunately for us, our nation’s demographics are such that an overwhelming portion of our population is in or approaching those golden years faster than young people are entering the workforce.

This retirement crises is a serious issue that all of us need to address and one that I discuss at length in Facing Goliath – How to Triumph in the Dangerous Market Ahead. The reality is that over the next decade, more than 10,000 Americans a day are turning 65 years old. Therefore we had better understand what type of economy we are in and what our investments need to do about it in order to pay for the lifestyle we want. Prepare your portfolio properly, and you’re flying first class to see the grand kids. Do it wrong and you’re taking the bus!

We are all aware of inflation. For the record, Inflation is simply the general increase in the level of prices. Put another way, inflation causes the purchasing power of the currency to decline. That’s what all of us are used to and inbred in us to think that’s what we always have.

The reality is that for the last 6 years we have has Deflation and or Disinflation. We had a brief bout of deflation in 2008, which was quickly overcome with the Fed’s stimulus and Quantitative Easing programs. Before this we haven’t had deflation in the U.S. since the 1930s, which is the general decline in the prices. It may sound attractive, but consistently falling prices leads to declining wages which diminishes consumer demand. Keep in mind that debt levels would remain steady, so falling wages will lead to increased defaults. This then leads to consumers delaying purchases, anticipating lower prices tomorrow for everything, a frightening prospect for the Federal Reserve!

“The [FOMC] recognizes that inflation persistently below its 2% objective could pose risks to economic performance, and it is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.”

Keith Springer

Don’t confuse Deflation with Disinflation
In a disinflationary situation, prices are slowly rising, but below target. This creates the threat of falling into a deflationary environment, which is enemy #1 for a capitalist economy. Currently we are in a disinflationary situation. If it looks like we’ll fall back into deflation, expect to see more QE programs.

Investor Strategy
Understanding what’s going on in the economy from the top down is a the critical first step for successful investing. This economy and market is the most difficult I’ve seen in the 30 years I’ve been in this business and chasing returns with unnecessary risk can derail your retirement hopes and dreams. Investing to get the returns you need but with the least risk possible is easier said than down. That’s why it’s so important to graduate to a qualified retirement advisor as you plan for retirement or whether you are already there. Money sitting in the bank earning nothing can hurt you just as much as losing it by taking too much risk. Either way, you can’t replace this money.

…… and that’s where we can help. To learn more about The Springer investment approach, which is our powerful proprietary Investment Management Strategy designed to manage risk and deliver returns in any market…and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900

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To Retire Like a Champ, Focus on This – Not That!

Keith_Springer_On_KEBK

 

Smart Money with Keith SpringerBelieve it or not, the biggest obstacle that’s keeping you from retiring successfully may not be what you think it is.  In fact, it could be you.  You may be simply focusing on the wrong things for your own retirement.  And that could needlessly cause you to remain working for an extra 5, or 10 or 15 years.  Discover the key things you should be focused on.

Listen to Smart Money with Keith Springer Saturday at 7AM, on Talk 650, KSTE.  Or Sunday at 11AM on News Radio KFBK.

 

 

 

 

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Yellen Sends Shivers To Investors

Yellen Sends Shivers To Investors

 

Keith Springer Smart Money NewsletterIn her first formal testimony as Federal Reserve Chairman, Janet Yellen did the unthinkable: she had the gall to suggest interest rates might rise someday….the nerve!

Of course I say this in jest, as interest rates have to rise at some point, but not until the economy is strong enough to stand on its own, which is what she meant. When that day comes, it will be good news. Let’s hope the market takes it that way.

At the moment investors are still in their post earnings nap period. In fact, the market has traded in a narrow range of less than 8% from low to high for several months now. This of course raises some concerns as market tops sometimes do occur when the market trades without much real movement to the upside. For instance, stocks topped on 10/9/2007 and went into a horrendous bear market.

On the other side is that the market had a nice 2013 and is just catching its breath and consolidating before it starts its next move higher. I am pleased that even with all the bad news, the market has held up well. We didn’t see a panic from Russia or the Yellen statement. That said, we are way overdue for a correction or an outright bear market, both of which are healthy and common, so don’t be afraid of them just be prepared!

This is most important if you are retired or planning for retirement because you are past the point where you can replace this money, so be sure to work with a qualified retirement adviser. In difficult times like this it is critical you make sure to adjust your portfolio to get the best returns with the least risk possible.

…… and that’s where we can help. To learn more about The Springer investment approach, which is our powerful proprietary Investment Management Strategy designed to manage risk and deliver returns in any market…and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900

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Keith and his son Josh at Chihuly in the Garden

I was able to get out to Scottsdale last weekend to visit Josh while he’s on spring break. We had a great time. I can’t believe he’s all grown up. While we were there we visited Chihuly in the Garden exhibit. Artist Dale Chihuly is credited with revolutionizing the Studio Glass and his work is included in more than 200 museum collections worldwide including the Metropolitan Museum of Art and the Smithsonian American Art Museum. It was truly spectacular, especially after the sun went down!

Click below for the gallery.

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