I’m in Europe at the moment, and the situation with the Millennial demographics here is no different than in America. In both places, the jobs market is worse now than at any other time during the 20th century for the young people, climbing up the corporate ladder.
In 2016 Warren Buffett made $12B. That’s $32,876,712 a day. Every minute of his day, awake or sleeping, he made $22,831.
Playtime is over. These are real money, real governments, and real consequences.
Already, higher interest rates are wreaking havoc, but this is like the unknown warm-up band that plays its heart out for 45 minutes before Aerosmith takes the stage – it’s always fun to see it, but it’s not the reason you came.
At 2%, the Fed Funds Rate is certainly not zero anymore, like it has been for years, but it’s not enough to convince money managers to move to bonds. What they’re doing is parking in cash, for the time being, waiting for a slight dip, so they can resume buying shares in U.S. equities, while CEOs keep buying shares as well, creating a snowball effect, just like in 2015 and 2016.
The one main difference being that the central bank itself isn’t buying anymore.
So, unlike the 2009-2017 era, when the largest currency monopoly on the planet was helping stocks go higher, now it’s down to the legitimate players to figure out the price of equities.
As I have said before, there are still, even nine years into this bull market, cheap, quality companies, trading below fair value that can be bought right now.
This is why my personal outlook differs from that of many other prominent figures, which forecast a tumultuous market crash, the likes of which we’ve never seen before.
Portfolio Wealth Global isn’t that dramatic, yet.
Our philosophy and strategy doesn’t rely on one possible scenario, regardless. In other words, we do not invest according to what we assume the future holds, but ONLY according to what the present offers.
As an investor, you and I have two primary roles:
The more advanced level of thought also considers the diversification among various asset classes, such as bonds, cash, private lending, art and collectibles, real estate, of course, or owning private businesses.
Don’t live your entire life with the annoying feeling that the USD is toast; therefore, you need to wait for the entire global system of banking, which comprises of 3 billion participating people, to collapse, to confidently place orders and own stocks.
This way of way, while always exciting, isn’t the blueprint for wealth.
The world, as a whole, continues to astound us with ways to enjoy radical wealth. In the past three months, while I toured Central America, I met many people, who envy what Americans take for granted or even despise about their country.
Remember, while the government is a plague, it is made up of people, who grew up in our own cities. These are not aliens from out of space, but people, who shaped their thoughts toward corruption and power, using values they saw in our society.
It is what it is, so our job isn’t to “fix” the world; we can only lead by example.
Right now, I’m focusing on building a database of dividend-payers, with more than an 8% yield, to invest in, as oil prices go up. This database will be comprised of securities called MLPs.
On top of that, I’m getting ready for Canada’s cannabis legalization and, finally, I’m looking at the zero-income-tax states, to see which ones are ideal for real estate investments, at the moment.
Remember, Millennials are just beginning to enter the higher brackets of salaries, buying homes, and putting money in the stock market.
Best Regards,
Tom Beck
Research Partner, PortfolioWealthGlobal.com
Today’s letter content is, essentially, what I plan to tell my own children, when they’re old enough to understand the importance of money.
I’ve been holding back with this subject for months, but it’s time to address this looming crisis, since it’s a train wreck, waiting to happen.
There are two major problems for pension funds:
These pension funds hold the majority of the Baby Boomers’ retirement equities, and they have banked on this money for nearly 45 years, since they joined the workforce.
The issue is that these funds are designed to earn 8% a year, mostly by investing in fixed-income instruments, yet their mandates bar them from venturing into junk-grade bonds or riskier notes.
In other words, they must perform financial miracles, by achieving stock market returns, using low-yield bonds, which caused most of them to only return a modest 3%-4% for many years, resulting in trillions of missing funds.
Now, when massive cash withdrawals begin occurring, and word gets out that these funds are under-capitalized, clients will be knocking on their doors.
It’s a situation, which could lead to another government bailout, down the road.
Before this happens, though, I’d like you to start preparing for the following likely scenarios:
In the U.S. alone, 100 million people are either retired or not working.
If I decide to stop working, then my cash flowing assets would provide for a nice living for my family, but 93.2% of Americans do not have more than $10,000 of passive income coming in from assets on an annual basis.
In other words, if you’re retired in America today, there’s a 93% chance that the government is helping you.
This isn’t just the U.S., which is facing a retirement cliff. Europe and Japan have scary demographic age pyramids, and China’s One Child Policy will put them in a situation, which will be impossible to manage as well.
Thanks to technological advancements, we take for granted being cool in the summers and warm in the winters. We live longer lives than any other generation going back thousands of years, and we consume much more, enjoying the privileges of travelling the world in a matter of hours, comfortably sitting in mid-air, being served beverages and food, watching movies, and listening to music.
Refrigeration, a variety of medical procedures, and high sanitary standards allow us to prosper and stay healthy for long periods, if we choose to sleep, eat, and drink in a healthy manner.
This all comes at a great socio-economic cost, though.
Tax revenue needs to be split between the many demographic groups, who want it, as well as to sustain our existing institutions.
Pension is big business, and it’s a rigged one because it over-promises and under-delivers.
One radical approach is to retire in a more affordable region, outside of your primary residence, and it is becoming an attractive option.
Next year, I’ll be traveling to five of the best retirement regions on the planet, to gather information for my folks on where they can lead a productive life and enjoy higher standards of living in their final years.
Think creatively about your own retirement because western governments have a boot over their throats – a disproportionate amount of dependent retirees. Find your own path through this nightmare. Portfolio Wealth Global will also focus on high-yield investments (8%-12%) and outside of the box ideas for you, going forward.
Best Regards,
Tom Beck
Research Partner, PortfolioWealthGlobal.com
Yesterday, I called my father and implored him to look at the data on this company, ahead of today’s IPO.
My partner is in San Francisco right now, taking a bird’s-eye view at how Artificial Intelligence is taking over Silicon Valley.
Our kindergartens, schools, colleges, and universities attempt to teach us knowledge that helps prepare us for the business world, but I already decided that I won’t be sending my children to these institutions, since they are failing us.
In the next couple of weeks, we might still see the market searching for direction, but the overall trend is higher, much higher.
