Be Wealthy & Smart

Learn which companies have been paying rising dividends for 25 straight years. Many people are looking for higher interest rates because bonds are paying low interest rates, for example, .88% on a 1 year Treasury bill and 2.4% for 10 year Treasuries. To help you find some substitutes for bonds, I'm sharing dividend paying stocks with you. They are companies that have steadily and consistently raised their dividends for 25 straight years, which is an indication of excellent and consistent cash flow. You may also want to look at corporate bonds - high quality, not junk bonds. This is a report from Investor's Business Daily of the S & P 500 Dividend Aristocrats index. Statistics are on my website at www.lindapjones.com. Podcast 215. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn why contrarian indicators move opposite to the crowd. British economist, John Maynard Keynes identified features of financial markets that subject prices to herd-like behavior. "The herd-like nature and influence of animal spirits in financial exchanges, and its potential to shift independently of changes in objective facts, is, according to Keynes, a primary, ineradicable source of economic instability." Groups move together in crowds and it impacts markets. Media is calling it "animal spirits" - Bloomberg, Barron's, financial websites. The cover of Barron's says Dow 20,000, pre-conditioning you to think it's going there. Look inside Barron's for some bullish indications that are saying the public is 63% bullish right now. Here are the reasons you need to be a contrarian investor: 1. When a good investment becomes obvious, it's very late in the game. This means when you're judging solely by price or return and something has gone up 100% or is crossing 20,000, you are one of the last ones in! I often tell the story of the tech fund that was up 100% in 1999 and took in over $1 billion in new assets soon after. The next 3 years it was down over 70%! I you bought at the top, you lost 70%. 2. When bullish consensus is over 60%, everyone whose going to invest already has. Like Joseph Kennedy, JFK's father said when a shoeshine boy gave him a stock tip in 1929, everyone is already in the market if the shoeshine boy is giving stock tips. 3. Most good investments fly quietly under the radar for a long time before they are recognized. They tend to be out of favor or unnoticed by many before they become obvious and the crowd jumps in. Everyone is still talking about oil, while hedge funds have been investing in green energy for 10 years! 4. Buy low and sell high. How can you buy low if you're buying it at the top? If you want to buy low, shouldn't you be buying the dips? 5. Keep from getting emotional - that's back to animal spirits but I'm talking about FOMA - fear of missing out. Sometimes people fear they are going to miss out on the Dow crossing 20,000 and it's going to go straight to 50,000. That's irrational! Catch my last podcast about why that won't happen. Truthfully, the market looks very over extended here. We are due for a pullback. Even when markets start to run away from you, it's usually overdue for a pullback and gets a more pronounced one. A famous investor said, the best time to buy stock is when blood is running in the streets. Remember you're buying businesses, so think of when businesses earnings are best, when news is best and what quarter it might be worst. Just like you can buy houses in December for the best price and least competition, you can also buy companies that way. Here's the thing, if you're buying an ETF for the long-term, it doesn't matter so much when you buy because you're going to hold it for 10 or 20 years. The odds are in your favor to buy and hold than to try to jump in and out or be a day trader, so try to dollar cost average in - buy at regular intervals - and hold for the long-term. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn from a listener question: Will the Dow Go to 50,000 Without a Rest? Listener question: Dear Linda, My friend say the market is off and running and will go to 50,000 from here. Will the Dow shoot to 50,000 without a rest? Raoul The Dow is only 30 companies large companies like American Express, Caterpillar, Chevron, McDonald's and Walt Disney, and some tech like Apple, Cisco Systems, Microsoft, Intel, and IBM. Stocks move in waves called cycles. It's the nature of things. Nothing goes anywhere without a pause or move in the opposite direction for long. The indicators look extended. The MACD looks toppy, relative strength is overbought, consumer confidence is 63% bullish - which is a bearish indicator. Way above the 50 day moving average - all show the market will rollover soon. How low? Don't know yet, see if it breaks support. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

You've heard me talk about following cycles. We are in the midst of several cycles happening simultaneously. Bonds lost over $1.7 trillion in November. The FED was talking about raising rates and bond market anticipated FED raising rates. Five year Treasury note went from .91% in July to 1.87% recently - a double! Thirty year yields went from 2.1% to 3.06% or a 50% move. Enormous! A 30 year mortgage is now 4.125%, still a good, low rate historically, but that rise in interest rates could move some adjustable rate mortgages by 25%! Interest rates are a 30 year trend and are rising again. This has had a negative impact on real estate since some sales have slowed and foreclosures are actually on the rise again. It's not surprising since interest rates have been skyrocketing. Interest rates also impact currencies and although the dollar has trended stronger, other currencies around the world have had wild swings in value, not the least of which is the pound, which was recently at a 31 year low! Higher rates make the dollar stronger which impacts many other currencies whose currency and/or debt is tied to the dollar. This is the largest debt bubble the world has ever had in history. It's in the US, Japan, China, Europe and other countries. The debt has been growing since 2008 and our problems didn't get fixed - they got worse! We have more debt and have not solved this, so somewhere ahead of us is a crisis greater than 2008. It's like if I gave you a credit card and another and another and you maxed each one out - your problem isn't solved, it's worse. Eventually it will impact the dollar, but for now it's going to get stronger as other currencies have issues. The Euro is a good example. I'll save that for another podcast. For now what you want to do is get rid of any variable rate interest you have - an adjustable rate mortgage, line of credit, etc. Anything that has an interest rate that can change you need to pay off as soon as possible, because rates are going up. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn The Leading ETF's of 2016 To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Top holdings are Apple, Amazon, Facebook - poor performers this month. There's been a rotation of leadership in the S & P 500 since the election. These have been strong: Financial Medical Energy Construction-related materials Those are up 10% since the election (total 80 companies); 30 are banks and financial firms. About 50 financials are up at least 5%. In the S & P makeup: 14% financial sector 14% healthcare 20% tech (largest sector) 12% consumer discretionary To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

I love talking about the importance of mindset in wealth building. We haven't visited mindset for a long-time, so I thought we would today. Recently I was reading about Amazon founder, Jeff Bezos. He was a successful investment banker who quit his job. Left in the middle of the year and left his big bonus. Talked to his boss about it, who said great idea, but better for someone else who does this stuff! Think long-term for life decisions. He calls it "Regret Minimization Framework". https://www.youtube.com/watch?v=jwG_qR6XmDQ Project your life forward to age 80. Look back on your life. Minimize the regrets in your life. Look back on your life. He wouldn't regret trying to participate in the internet. Wouldn't regret failure. The one thing he would regret is not having tried. That would haunt him every day. Gets you away from the daily pieces of confusion, like leaving his bonus. Think long-term to make good life decisions you won't regret later.

4 Choices for a Former Employers' 401(k) Hi Linda, I would like your opinion on the following; my wife is beginning a new chapter in her career and starting a new job after 11 years. She has a 401k with a significant amount of funds and now we have to make the decision on what to do? The one decision that has been made is that we will not withdraw any money from the account, but we are not sure what our best option is: 1 Keep it as is within her old company's 401k plan? I am not a fan and I know that we could incur administration fees plus we have a limited investment selection. 2 Rollover into her new company's retirement plan? My reservation with this option is again having limited investment options. 3 Fidelity has a 401k rollover IRA plan that allows us to have full control of our investments (funds, stocks, etc.). I like this option but I know you are fan of ROTH IRAs better, but if we try to convert from a 401k to a ROTH IRA—would we get taxed? We believe the best option is #3 but I value your opinion and your expertise which will help finalize the decision. I appreciate your time and look forward to your feedback. Thank you, Ray I'm glad you didn't have "cash out" in your list of options! You know that would be the worst and most costly mistake and you won't even get all of your money. If you cash out, your employer is required to hold 20% for the IRS and you have 60 days to put it into a qualified retirement account or it's taxed as ordinary income, plus any state tax that's applicable. If you're under age 59-1/2, you'll also have a 10% penalty to pay, so you can see, that's not a good option! The first option you mentioned was leaving it with her old company's 401(k) plan. Keep in mind, since she's no longer an employee, she can't make any more contributions to it. While that's where most people end up leaving their money (by default), it's not the best choice. As you said, you have a limited investment menu. Most 401(k) investment menu's are quite restrictive, offering one or two choices per asset class. It's like trying to do your grocery shopping at Starbucks instead of at the grocery store! In the grocery store, you have all types of possible food available to you, not just a few things. So you can see why you will want to roll over your 401(k) into an IRA so you can have the whole grocery store available! You might be able to take a loan against it if you need to, but if you already have one against it, you have to pay it off before moving it, other wise it will be treated like a taxable distribution. Same grocery store reasoning goes into why you don't want to roll it into her new company's retirement plan. Limited menu. For example, you know I've been talking about how tangible investments are making a comeback and paper investments are going out of favor. Most 401(k) plans have several paper choices (ST bond, Long-term bonds, High Yield bonds, International or Global bonds, etc.) and NO (ZERO) precious metals, agriculture, commodities, or mining stock choices. I agree with you, option #3, rolling it over into an IRA is your best solution. Set up a new brokerage account before you start the transfer. Then make sure the funds go directly to the new account and not to you. It's called a trustee to trustee transfer. Otherwise, if the check comes to you, 20% is withheld and if not rolled over within 60 days you'll be taxed. You get the 20% returned when you file your taxes. That's not a good scenario, so go for the trustee to trustee transfer. You mentioned that there are sizable assets in the 401(k), so I wouldn't think a ROTH IRA would be feasible. Of course you'd have to qualify to be able to open a Roth IRA by not exceeding the income limits and you'd have to pay tax on your 401k. That doesn't sound like a good plan in your case. Just roll it into a traditional IRA. Once you have the money in your brokerage account, not only can you invest in mutual funds, but ETFs, stocks, master limited partnerships, etc. that you didn't have access to before. You can broaden your diversification and widen your investing horizons. To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Q. Linda, I bought a 2002 Porsche Boxster in 2013 for $13,000, low mileage, not much to repair until this year, I think my repair cost became 4K. I guess my car still worth about $8000, do you think I should trade in for another car? or drive to the ground? The engine is still very good, no problem in driving, but a little here and there problems are annoying. First, good for you for buying a used car! You saved yourself thousands of dollars and I hope you were able to invest some of that extra savings. When a large repair bill occurs, it can create a crossroads - fix or trade in? Here are some things to consider: 1. A $4,000 repair is still a lot cheaper than buying a new car, especially a new Porsche! New cars lose about 20% the first year, so that's a big hit. 2. Often a larger bill will occur every 3 to 5 years. If it's more frequent than that, consider a trade. Paying $4,000 every 5 years is still a lot cheaper than buying a new car. 3. If you feel like you're being nickled and dimed to death, consider a trade. It shouldn't feel like things are always going wrong. You don't want a car thats a pain in the neck and not operational. If your car is breaking down frequently, replace it. I'm not talking once or twice, but regularly. It's dangerous and not something you should be dealing with. 4. Your insurance and registration fees can increase with a new car. 5. As a rule of thumb, I would put off buying a new (used) car as long as possible. It's almost always better to repair a car that to buy a new one! I love my older cars and take great care of them. They are lasting really well! To get "11 Quick Financial Tips to Boost Your Wealth", go to www.lindapjones.com.

Learn about stock market seasonality and cycles in this interview with Garrett Jones from Peter Eliades Stock Market Cycles Management, Inc. Get 11 quick tips to boost your wealth at www.lindapjones.com.