3 Reasons Why I Walk at the March for Babies

IMG_98511.jpgThis weekend millions of people will gather around the United States and join together in the fight to end premature birth. The March for Babies is held yearly in over a thousand communities with the proceeds going to fund March of Dimes research to prevent premature births, birth defects and infant mortality.

This will be the 3rd year that my family participates in this wonderful event. Last year Runnymede was a top corporate fundraiser in Morris County and once again we are hoping to be a big contributor. If you would like to help with a donation, any amount would help the cause, even if only a dime.

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Here are 3 reasons why I walk at the March for Babies:

An impartial review of the Allianz Core Income 7 Annuity

annuitiesThe annuity business has grown in popularity as investors, especially those nearing retirement, look for options to protect themselves from stock market volatility and give them a decent income stream in retirement. With over $200 billion in annual sales, the annuity industry is big business with lots of salesmen trying to persuade you to make a purchase.

Today I will dig deep into the Allianz Core Income 7 annuity which has been requested by several readers in recent weeks. It currently is one of the top 10 best selling annuities on the market. Sales of indexed annuities, a fixed annuity that provides a minimum guaranteed rate of interest combined with an interest rate tied to movement of an index, increased to $54.5 billion in 2015, a 13% gain year over year. This is the biggest percentage increase of any form of annuity.

Taking Too Much Risk May Sink Your Retirement

85016_Retirement-Further-by-Frederick-Deligne-Le-Pelerin-France-515x349.jpgThanks to the Fed's zero interest rate policy (ZIRP), baby boomers are facing a much tougher road to retirement than those in the past. While it may seem like an eternity, it was only 10 years ago when you could park your money in a savings account and earn interest of 5%. Retirees who worked hard and saved their money could safely invest their assets in retirement and not have to worry about suffering any losses.

Today is an especially challenging environment for investors who are looking to generate a safe income stream. No Treasury bond will pay a safe 5% return as a 30-year Treasury Bond yields just 2.69%. This is causing a massive gap between what boomers say they want in retirement and what they're doing to make it happen.

Earnings Recession: Big Negative For the Market

Man-Struggling-with-Fin-Chart.jpgMany media pundits like to skew numbers to fit their narrative and a lot of people out there believe the Wall Street storytelling that "earnings excluding energy are fine" and "sales excluding currency are growing."

Well we disagree. It's too bad that in the real world, many energy companies are nearing bankruptcy and multinational corporations have to deal with currency fluctuations. Therefore, investors can't simply ignore all the bad news and go about life hunky dory. The ugly truth is that S&P reported earnings have declined for 5 consecutive quarters and are in a full blown earnings recession.

Watch out! Negative interest rate policy is coming to the US sooner than later

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Last August, Runnymede Capital warned our readers that a financial hurricane was coming. Over the past six months, the stock markets around the world tumbled and the US has followed suit in 2016. Our clients, who gave us permission to raise cash reserves, were fortunate and their assets were protected.

The Global Bear Market has Reached US Soil

bear-sell_0.jpgYou are probably aware that the US markets are off to their worst start in recorded history. However many media commentators are bear market deniers and believe that there isn't a bear market at all and stocks will go up forever. If there is a correction, deniers believe that the Fed will just restart their quantitative easing programs and stocks will continue their ascent to infinity.

I'm sorry to tell you that if you look at the data, the global financial markets are already in a deep bear market and their central banks have been ineffective in printing themselves out of recession. The US is being pulled down by international forces beyond our control and our economy is likely headed for recession in 2016. Let's take a quick look around to see the carnage.

They Say The Sky Is Clear, We Say Take Cover

Bubbles are the only things that matter. The rest of it is boring. You show up for work, markets are at normal levels, and there's not much you can do. It's all trivial. But in a great bubble you can get your clients' arses out of the way, and the money you can save can be quite legendary." - Jeremy Grantham

The financial services industry generally frowns upon market prognosticators. "Stay the course," they say. This is especially true in recent years since passive investments have outperformed active ones. Admittedly, peering into one's financial crystal ball and voicing an opinion can be a risky endeavor. Besides the obvious risk of being wrong, another risk is being labeled a perma-bull or perma-bear. In article after article that I read, the media loves to turn to its favorite go-to bulls and go-to bears for an appropriate quote. Unfortunately, few individuals are permitted to change their minds and even fewer do it well.

At Runnymede, we do a lot of research, and our view is dynamic, not fixed. Ultimately, our market outlook is reflected in the positioning of our clients' portfolios.

The Fed: Asleep at the Switch

Fed’s Williams foresees up to five rate hikes this year. Is he clueless?

Many of the economic departments of the regional Federal Reserve banks conduct outstanding research on the economy. At Runnymede, I rely on them heavily for my prognostication on the economy as well as the stock market. The pity is the bosses at the Fed must not read their own research. Is it possible that the Chicago Fed's National Activity Index (CFNAI) is not part of the "data" that the Central bank is so "dependent" upon? CFNAI has missed expectations 9 of last 11 months and has been below 0 (contraction) for 8 months last year. In November the index missed expectations once again, tumbling to its lowest reading since May.

Will Kamikaze Kuroda crash the global financial markets?

kamikaze_kuroda.jpgNear the end of World War II, the Japanese conducted Kamikaze or suicide attacks, designed to destroy warships more effectively than was possible with conventional attacks, against Allied naval vessels in the closing stages of the Pacific campaign. About 3,800 kamikaze pilots died, and fortunately, only a small percentage of kamikaze attacks managed to hit American ships.

Is the Kamikaze behavior alive and well in the 21st century in Japan?

Wall Street strategists forecast a weak bull market again for 2016

As we near a close to 2015, it is time to look forward to 2016. We have done this in 2014 and 2015, so it is becoming a tradition to see which strategists did well and which missed the mark. What do the experts think will happen in 2016 and should we even care. medium_728933695

Perhaps you are familiar with Philip Telock's landmark UC Berkeley study that looked at 82,000 predictions over 25 years by 300 leading economists. It turned out that their so called expert views were no better than random guesses, and worse, the more famous, the less accurate the prediction.

Last year the strategists predicted a weak bull market for 2015, but it turned out they were still too optimistic. Their average forecast was for a 6% gain in the S&P 500 to 2218. However as of today the S&P 500 stands at 2074 which is down slightly from its 2089 close at year end 2014. The two that were closest to the mark were Goldman's David Kostin and Barclays' Jonathan Glionna who both forecast a year end close of 2100.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Runnymede Capital Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.