LIVING OFF DIVIDENDS & PASSIVE INCOME

Regular readers know I’ve been pretty pessimistic on the outlook of the US economy and bearish on the US dollar as well. However, since it seems like everyone is echoing the same sentiment, could it be that we’re due for a short (or medium) term spike in the US Dollar?

According to Lou Basenese, editor of the The Alpha Intelligence Alert, think it’s time to go long the USD.
Here are some of the reasons he cites:

1. Bernanke & Paulson Rediscover “Verbal Intervention.” Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke finally got off their duffs to defend the dollar. Paulson got things started in Qatar on Sunday. Speaking to the leaders of the Gulf oil states, he urged the countries to think twice about abandoning their dollar peg, as “ending the peg is not the solution to the inflation problem.” And Bernanke stepped up today. Speaking, via satellite, to an international monetary conference in Spain he insisted Fed policy will be a key factor, “ensuring that the dollar remains a strong, stable currency.” After such a long silence, this week’s tag team approach is nothing but a positive development.  Read more... (1281 words, 8 images, estimated 5:07 mins reading time)

According to Morningstar, here’s the top ten performing mutual funds of 2007

1. Direxion Commodity Bull  2X Inv (DXCLX) : 87.6%

2. Direxion Latin America Bull 2X Inv (DXZLX): 83.7%

3. CGM Focus (CGMFX):  79.9%

4. AIM China A (AACFX): 74.9%

5. Nationwide China Opportunities A (GOPAX): 74%

6. Matthews China (MCHFX): 70.1%

7. Profunds Ultra Emerging Markets (UUPIX): 70.1%

8. T. Rowe Price New Asia (PRASX): 66.4%

9. Guinness Atkinson China & Hong Kong (ICHKX): 65.1%

10. Matthews India (MINDX): 64.1%

Unfortunately I didn’t own any of them. Recently, I did jump in CGMFX though, and hopefully it’ll keep up its momentum. A large part of its returns came from shorting Countrywide CFC. I hope they exited the position. Today Bank of America (BAC) announced they would be acquiring CFC. The stock was 50%+ on the news!  Read more... (151 words, 8 images, estimated 36 secs reading time)

Its that time of year, where you should be looking at your investment portfolio, assessing your performance, seeing what you did right or wrong and if any part of it needs to be rebalanced.

Its also a good time to assess your tax liability and see if you can (or should) be funding your Roth IRA for last year. Typically, if you’re in the highest tax bracket, you cannot invest in a Roth IRA. It also doesn’t make much sense, since when you retire you might be a lower tax bracket. But in any case, you should be investing in a regular IRA. Up to certain income levels you get a tax credit for these contributions, so its definitely worth more research. You can invest up to April 15th for last year’s contribution.  Read more... (410 words, 8 images, estimated 1:38 mins reading time)

I was reading this article from the New York Times by Tim Gray called “Three Strategies That Kept Sizzling:

Ken Heebner, manager of CGM Focus, achieved a double distinction with his fund. He placed among the top performers for the most recent quarter and the five-year period. For the quarter, CGM Focus, which invests mainly in large-capitalization domestic stocks, returned 30.3 percent, while for the five years ended Sept. 30, it returned 32.9 percent, annualized.

Mr. Heebner’s offering isn’t for the faint-hearted. He shovels shareholders’ money into relatively few stocks  23 in late September and rapidly zips in and out of investments. When I buy a stock I say, What factors would cause me to change my view? he said.  If I see them, I immediately sell. And if I see something I like better, I immediately sell. If there�s an emerging opportunity, I don’t want to miss it.  Read more... (365 words, 8 images, estimated 1:28 mins reading time)

I have a 401k from a previous employer. With only a dozen mutual funds to choose from, it doesn’t have very many investment choices. I’ve done the best I can from these choices and have selected 8 of them, with 75% of my 401k invested in just 3 funds. And I’ve managed to eke out a very respectable 17.4% for the first 3 quarters of the year.

On the flip side, my 401k with my current employer has about 3 dozen options. However, there’s less diversification amongst them than with the previous employer! It lacks a REIT fund (not that I’d invest in it, since I’m heavily invested in Real estate on my own), a health care fund, and a technology fund.

Instead, some moron set it up with 4 bond funds, 2 small-cap broad market funds, 2 small-mid cap value funds, 2 small-mid cap blend funds, 4 mid-large cap equity funds, 4 mid-large cap value funds, 3 international funds, and so on.  Read more... (280 words, 9 images, estimated 1:07 mins reading time)