Archives for July 2013

July 2013 - Page 6 of 18 - Money Morning - Only the News You Can Profit From

The Most Dangerous Myth About Retirement Investing

The most dangerous myth out there right now is that Treasuries are the key to safe wealth building.

Forget about Fed Chairman Ben Benanke's latest palliative.

This misconception will turn your nest egg into a pile of sticks faster than you can say quantitative easing.

And this is a huge problem because the baby boomers are starting to retire in droves.

I call this the Great Retirement Funding Crisis. And I am determined not to be a part of it. And I have a plan.

Two Cheap Growth Stocks To Buy Now

Many investors know how to take their first profitable step in the search for ideal stocks to buy: Look for extraordinary growth potential selling at a significantly low valuation.

Even with markets up double-digits this year, there are still stocks to buy that are trading at a discount to what they're worth.

What the Detroit Bankruptcy Means for Municipal Bonds

You can't blame investors in municipal bonds for being worried about how the Detroit bankruptcy will affect the muni market – it's by a factor of four the largest municipal bankruptcy in U.S. history.

Last Thursday Detroit filed for Chapter 9 bankruptcy to seek relief for $18 billion in debt obligations, a debt driven primarily by years of soaring public pension obligations and shrinking tax revenue.

In the city's bankruptcy filing, Detroit emergency manager Kevyn Orr proposed cutting some of those retirement benefits and giving the city's municipal bondholders a haircut that could leave them with pennies on the dollar.

That prospect not only spooked investors in Detroit's municipal bonds, but triggered concern that other municipalities might soon decide to do the same thing.

Municipal bonds as an investment have already come under pressure this year. June was the fourth month in a row of negative net outflows. Over that time, $20 billion has exited the muni bond market.

"I think this will definitely help add to the stampede out of muni bonds," Theodore Feight, owner of Creative Financial Design, told Investment News.

Why Cybersecurity is One of the Best Investments You Can Make Right Now

For months now, we've been harping to our readers about why cybersecurity is one of the absolute best investments you can get involved with right now.

Now the rest of the financial media is catching on.

This weekend, Barron's profiled cybersecurity investing, detailing why it's one of the hottest sub-sectors of 2013.

That means cybersecurity investors are closer to realizing huge gains as more investors pile in to these stocks.

Take a look at these shocking numbers and you'll understand why this industry is exploding with profit potential:

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Is Obamacare Creating a Part-Time America?

America has become a part-time nation. The Bureau of Labor Statistics recently reported that in June part-time employees in the labor force reached an all-time high of 28 million, 3 million more than when the recession began in 2007.

The economy lost 240,000 full-time jobs in June and added 360,000 part-time jobs, the BLS noted. Of the 753,000 jobs created this year, 589,000 were part time.

The real unemployment rate in June, the U6, stood at 14.3%, up from 13.8%, a figure that includes part-time workers seeking full-time jobs and those who have become discouraged and are no longer looking for work.

Now many economists and many in the financial press with sympathies to the administration have attributed the rise in part-time America to uncertainty among employers about future profitability and growth and not to the looming Obamacare mandate.

It's ironic that in trying to play down Obamacare's influence on the job market, they end up dissing the president's stewardship of the economy.

However, Obamacare has likely played a significant role in the part-time job wave. Under the Affordable Care Act, companies with 50 or more full-time workers must provide health insurance to all full-time employees, those working 30 or more hours per week.

So if your workers don't work 30 hours per week you don't have to provide health insurance. It makes economic sense to have a part-time work force in many cases. Even with the administration's recent one-year extension of implementing the employer mandate until 2015, most small companies are still preparing to it.

A reported 74% of small businesses are positioning themselves to slash hours, layoff workers or both.

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How Higher Mortgage Rates Will Dent Housing's Recovery

How much do higher mortgage rates reduce home sales?

That, of course, depends on how much rates rise and whom you ask. But there's no doubt higher mortgage rates hurt sales, experts say.

Interest rates have been climbing since May. Rates on 30-year, fixed-rate mortgages averaged 4.37% for the week ending July 18, Freddie Mac's weekly survey of conforming mortgage rates said. That's up more than a percentage point from early May.

And existing home sales fell 1.2% in June, to a seasonally adjusted annual rate of 5.08 million, from 5.14 million in May (but still 15.2% higher than in June 2012), the National Association of Realtors said Monday.

Lawrence Yun, the NAR's chief economist, told Money Morning he expects interest rates to hit 5% to 5.5% within a year. And while he foresees existing home sales rising as much as 10% for 2013, he predicts only a single-digit percentage increase next year primarily because of higher mortgage rates.

"There's no risk of any reversal of this housing recovery; it's just slowing the pace of this housing recovery," Yun said.

He said robust demand and affordable prices would lessen the impact of the higher mortgage rates in much of the country, but pricier markets in New York, parts of California and Hawaii would be hit harder by the higher mortgage rates.

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The Four Most Rigged Economic Indicators

On August 2, the Bureau of Labor Statistics will report the official unemployment rate. But this number doesn't tell the accurate story of the jobs picture here in the United States.

That's usually the case with government-produced economic indicators. Whatever the government figure will say, it will not truly reflect reality. Simply put, it's a rigged number.

When it comes to cheating the numbers, nobody does it better than Uncle Sam.

U.S. investors rely on accurate government data in order to make investment decisions in various sectors of the economy.

But what if these figures reflected negative headlines on a near-constant basis? It wouldn't instill much confidence. And it certainly would cost a lot of people in Washington their jobs.

That's why Uncle Sam plays games with the numbers and presents a far rosier picture of the world to low-information voters and investors. But we're paying attention here at Money Morning, and that's why we're holding a spotlight on the fuzzy math in Washington.

Counting down, here are the four most rigged government statistics in America today:

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Can Earnings Keep This Netflix (Nasdaq: NFLX) Stock Hot Streak Going?

After soaring more than 180% this year, will Netflix (Nasdaq: NFLX) stock get a boost from today's earnings, or is this growth tear ending?

We'll find out Monday after the close when the video-streaming giant posts second-quarter results.

Upside numbers are expected from Netflix, which just made Emmy history with its blockbuster series "House of Cards" and "Arrested Development." Netflix garnered 14 nominations including Best Drama for Cards.

Year-to-date, shares have nearly tripled, rallying more than 180%. That puts NFLX as the top performer in the S&P 500 Index.

But as investors have experienced in the past, Netflix stock can reverse course in dramatic fashion…

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