Be Wealthy & Smart

Learn how much the Dow Jones Industrial Average has changed and why it is a poor indicator to gauge stock performance. I decided to research changes in the DJIA. How many companies from the last 20 years are the same and how many have changed? I researched the companies in the DJIA from 1997 - 2017. In the last 18 years, the Dow doubled from 10,000 to 20,000. That's an average of a 4% return. How many companies in the Dow are the same today? Are we comparing apples to apples? For example, if I go to the grocery store and pick out 30 different cans of food - olives, soup, green beans, peaches, etc. and add up the prices for each can, then twenty years later I change 10 cans and compare the prices to the original group of 30 cans from 20 years ago to today's group of 30 cans, what is that telling me? All we know is 66% of the cans are the same. That's what the Dow Jones Industrial Average is like. Only 66% are the same companies from 20 years ago. The DJIA lost these 10 companies: Sears AT & T Eastman Kodak General Motors Goodyear Hewlett Packard International Paper Philip Morris Union Carbide Allied Signal There's only one original company still in the 100 year old Dow: General Electric So don't get caught up in rah rah! Dow 20,000! It means nothing! OK, it means two thirds of the companies have probably increased in value. That's all you can presume! Use the S & P 500 as your indicator. It changes too, but covers 65% of all stocks in the stock market. Professional money managers are paid based on the S & P, not the Dow. Be savvy. Don't be fooled by marketing ploys. For more savvy investing, to to www.lindapjones.com

Learn about ETFs and mutual funds Listener question - Are ETFs or mutual funds better? What they are: ETF's: Fixed basket Trades like a stock, continuously priced throughout the day Transparency Low fees Broad index or sector Long or short Mutual funds: Funds pooled together Professionally managed Priced at the end of the day Decisions made for you Only know what stocks are in it quarterly Don't need a brokerage account, can go direct to the fund Higher fees Can cause unwanted capital gains Manager is paid to beat the indexes, but they don't always accomplish it. Can invest regular deductions from your bank account ie. $25/mo. Question is which one will provide better performance? Use ETF's for indexes. Use mutual funds for good manager's track record. Asset allocation model - core + satellite, creating a combination portfolio To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn the 3 secrets about financial education that most financial experts don't tell you. This show is all about financial education! Specifically, how to make it understandable and interesting, even if you're usually bored by financial topics! 1. Financial management is very doable on your own. It takes a bit of learning a few concepts and terminology, but it can be done. The truth is, most advisors put you into an asset allocation model and look at it quarterly. They are not watching your account like you might think. Why not learn how to do your own asset allocation and save 1 - 3% annually? 2. Financial advisors think their best service is to hold your hand when you are scared by market volatility. Perhaps if you understand what to expect, you can do that for yourself. Rather than hoping deep dips and wild swings won't happen, you have to accept them as part of investing and learn what to do because the stock market drops about 10% every 11 months on average. The Dow Jones Industrial Average has dropped 20% 12 times since the end of WWII. That's about every 6 years. We are now overdue for such a dip. Do you have a plan? Do you have cash set aside to buy? I certainly hope you weren't buying at Dow 20,000, an all-time high! Liquidate some things, trim positions a bit to raise some cash. You can keep all your positions but have smaller ones. Prepare for maximum fear - the time to buy. You can watch the VIX or watch consumer sentiment. When the VIX hits a high, consumer sentiment a low, or relative strength is below the bottom of the chart on stockcharts.com you could have a bottom. 3. Keep learning. Keep listening to this podcast and your other favorites and keep learning. Be cautious of certain stock hawkers on TV and of so called "traders" on TV. They have more incentive to be confusing so that you keep watching and giving them ratings, than to actually educate you. Remember, moving opposite the crowd is usually the smart move and the TV is the crowd. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn if the economy can get to 5% GDP growth quickly or not. Weakest GDP since 2011 - went from 3.5% to 1.9% in one quarter! Lower earnings reported by Chevon, other energy companies, Google, Colgate-Palmolive and Starbucks. Even with some disappointing corporate results, fourth-quarter earnings are expected to show growth of 6.8 percent, which would mark the biggest increase in two years and second straight quarter of growth, according to Thomson Reuters data. Dow hit 20,000 for the first time. Took 18 years to double - that's a 4% average annual return. Is most of the good news already baked into 2017? Consumer spending is up .5% in December, largest jump in 3 months, which is 2/3 of the economy. Good news there. Pending home sales up 1.9%, 17 year shortage of housing. Trump growth of 5% is going to take a while and won't happen right away. Cycles are showing massive swings up and down in the market this year. FED may raise rates 3 times - inflation is flaring up. IMO, we have the EU break up to look forward to, a European bank failure, and a lot of cash flowing into our markets as a safe haven from China and Europe. Other countries have been moving their funds here from China, Russia and Europe and that will likely pick up. Cycles are showing some extreme volatility and since this is the second longest bull market ever, I wouldn't be surprised to see the economy weaken even to the point of recession and the stock market have a meaningful pullback. Increased volatility. Rather than try to short it, I suggest you get your shopping list ready to buy the dips, when there is real fear. Look to corporate bonds for income and stay away from bond funds. It will take time for President Trump to turn the economy into a faster growth GDP. In the meantime, there will be wild swings as the dollar and other currencies fluctuate. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn key economic signs to follow. For the election, GDP grew over 3%. FED raised interest rates, now GDP is 1.9%, markedly lower. Where do we go from here? FED wants to raise rates 3 times next year. Housing prices are in a bubble - inventory is at a 17 year low! Housing moves in an 18 year cycle. Trump has policies to grow the economy, jobs, cut regulations and cut excess spending. Will have massive stimulus from infrastructure spending and the wall. Taxes being massively cut. The spending + reduced taxes will help GDP but growth must happen, so we need job creation badly. The FED controls interest rates. If they continue to increase rates, that's a strong headwind against the economy. There's a battle happening here! We'll watch and see what happens.

Learn if it's smart to contribute to a 401k if you're not getting a match. Should we contribute to our 401k, even though there is no match? Benefits of a 401k are that: 1. Your income is not taxed when deposited into a 401k 2. Your money grows without tax 3. Some people think it's a forced discipline to save, that otherwise the money wouldn't be saved, but…there are: 1. Limited investment options, usually large cap, mid cap, small cap, international and bonds, usually mutual funds with higher fees. 2. Don't have wider options such as stocks, low cost ETF's, sector funds. Leaves out gold/silver, technology sector, agriculture & commodities, country funds, etc. 3. There's a whole universe of investment options and you're restricted to a limited menu. 10% penalty if not 59-1/2 or if you don't withdraw money under allowed hardship withdrawal rules or penalty free rules. In summary, if you are a disciplined person you can save or set up an automatic deduction plan to deduct your investment money into your investment portfolio, have wider investment options in a brokerage account, plus more flexibility to withdraw funds for liquidity without incurring a 10% penalty. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn what the challenges are for the stock market going forward. It's a new record; the Dow made history! DJIA is only 30 companies, but been around over 100 years. S & P 65% of all stocks 1966 was the first time above 1,000 11/21/95 above 5,000 3/29/99 above 10,000 5/3/13 above 15,000 1/25/17 above 20,000 Hmmm, is that at 4 year cycle for every 5,000 points? Will Dow 25,000 happen in 2021? Still the 2nd longest bull market in history. Since 2009. Expecting a major top this year. Major cycle change in the Fall. Cycles repeat and guide expectations in the stock markets. Although the Dow hit 20,000 and we have a new President, whether or not you voted for him, there are certain things he will be forced to deal with on his watch. I watched the hearings of the Treasury Secretary, Mnuchin. The questions and statements by Congress were very telling. Here are some of the things they discussed: *Underfunded pensions as a widespread problem that possibly needs a bailout *The $20 trillion deficit and whether to default on debt or not *The strong dollar, world's reserve currency *Currency manipulation *Mortgage reform *Massive tax reduction *Social security, medicare, medicaid *Obamacare/Affordable Care Act What wasn't mentioned - the derivatives take down that may happen if European banks like Monte dei Paschi and Deutsche Bank fail and the ECB fails to bail them out. There are some massive financial decisions to be made and things to be worked out. No matter who would be President, these things will come to pass in the next few years. It will be interesting! President Trump has talked about getting rid of the Federal Reserve. If he can do that, it would be a major victory for the people. The Banksters have been in control for too long. Control over interest rates has allowed the Fed to create bubbles and pop them. They are projecting raising rates 3 times this year. It has the power to throw us into a recession. The best solution put forward is for us to grow the economy as much as possible. That seems to be the Trump plan. It will be interesting to watch what happens! To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn 11 financial moves to make in 2017 1. Identify any mistakes made in 2016 - Stocks to sell, trim losses 2. Review & rebalance portfolio - Make sure you own some small caps 3. Consider strategic investments in high growth areas - Spice up your portfolio with India, silver, China, tech, etc. - What can you buy low? Commodities? Uranium? Miners? 4. Reduce debt - Refi or pay off 5. Avoid long-term bond funds - 30 year bonds have the most risk in a rising interest rate environment 6. Save and invest more - Savings accounts have low interest rates, investment accounts offer potential of higher compounding, but have more risk. 7. Think over large purchases - Do you really need a new car? - Could you invest instead? 8. Start a side hustle for extra income? - Never easier to start a business 9. Consider how big picture changed and how it will affect you - New President, lower taxes? - Interest rates rising - Banks in Europe in crisis? 10. Things that didn't change - Debt in USA - Your work? Income? Mortgage? - Your goals? - Your retirement age? 11. Time, Money, Compounding Rate are the 3 things that effect your wealth. - Time = years to retirement - Money = amount to invest - Compounding rate = % you compound money Make it a priority to learn about investing. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn what 2016's Top Stock Funds are according to Investor's Business Daily. Hard copy of the numbers are posted on my website at www.lindapjones.com, podcast 217. While you're there, get my free report, "11 Quick Financial Tips to Boost Your Wealth" to move your net worth forward in 2017 and beyond! www.lindapjones.com

Learn the Best and Worst Performing ETF's in 2016 according to Investor's Business Daily. Get the information in print form at my website, www.lindapjones.com, podcast 216. While you're there, pick up the free report, "11 Quick Tips to Boost Your Wealth" and get your net worth moving in the right direction in 2017 and beyond. www.lindapjones.com.