John Wasik

Has gold been trumped?

Sep 30, 2011 15:44 UTC

When Donald Trump accepts gold bullion as a security deposit for one of his buildings, is it time to bail out of the yellow metal as it heads for its worst month in three years?

However you interpret gold’s recent slide — or the Trump factor –either the pale metal has lost its luster for now or large investors have ratcheted down their fear levels. Either way, there’s going to be more downside volatility in that market.

As I’ve written in the past, I don’t regard gold as a real investment. It doesn’t pay dividends, has no intrinsic value and is no replacement for bread and water if catastrophe strikes.  Gold may be due for a huge correction. The raising of exchange margin requirements for gold traders and the possibility of the Eurozone debt woes being addressed led to a huge sell-off of gold in the past few weeks.

After making a run at $1,900 an ounce, the metal fell to around $1,600. It may be that large investors actually fled gold to be in cash again, thinking that either gold’s run was over or they needed to be in something safer.

Yet if you believed that gold is a proxy for extreme uncertainty — as millions have — when would you begin to shift into less-volatile vehicles such as government or inflation-protected bonds?

Balancing your portfolio in a bonkers market

Sep 26, 2011 19:02 UTC

Balance is a rare bird these days. Jobs, housing, stocks, European debt: All seem to be in a spasmodic tailspin.

There is some consolation that a balanced portfolio can help smooth out the jagged curves of a bipolar market economy. But balance is rarely what we think it is, and it needs constant monitoring.

When most investment advisers tout a balanced portfolio, it typically means one thing: About 60 percent would be invested in a U.S. all-stock fund and the remainder in bonds.

How to focus in a manic market

Sep 23, 2011 15:29 UTC

While the market was doing another backward swan dive, one email came to me that reflected the mass anxiety: “Some are saying it may be time to panic, and I am resisting. What do you think? And what does panic mean: Jump? Sell off?”

After I offered some brief words of staid resolve, it occurred to me that the luncheon speaker at the Morningstar ETF conference I was attending at the time had the right idea, even though he didn’t utter a word about finance or markets.

Words of fortitude came from Jeffrey Zaslow, who co-authored books with Chesley Sullenberger, the pilot who safely landed a disabled jet in the Hudson River (saving all 155 aboard); and Randy Pausch, the Carnegie-Mellon Professor who offered a moving “last lecture” on life and love before he died of cancer.

Why household debt reduction could jumpstart economy

Sep 19, 2011 14:08 UTC

If we could move beyond the housing crisis, where would we find the seeds of a broad-based turnaround?

Right now most of the country is anguished over the slack job market and global economic uncertainty. Almost half of U.S. homeowners are feeling house poor. That is, most folks can’t get their wealth out of their homes or even put a realistic price tag on it. They may even be stuck in a house that’s worth less than its mortgaged value.

This morass has led to a massive liquidity and consumer psychology malaise. Is there a way out? Yet there are signs that the clouds are parting.

Perry’s monstrous lies about Social Security

Sep 16, 2011 15:29 UTC

Gov. Rick Perry, the GOP presidential candidate who calls Social Security a “monstrous lie” and a “Ponzi scheme” has implied that future retirees can’t rely upon receiving benefits from the system.

Not only is Perry shooting wildly from the hip on these statements — a strategy cynically designed to attract angry, younger independent voters — he’s spewing some layered falsehoods that need to be addressed.

Social Security can not only be preserved for future generations, its coming fiscal shortfalls can be fixed relatively simply. What Perry also neglects to mention is that it’s one of the most successful anti-poverty programs in U.S. history.

Double-dip recession porridge: 3 bears dish it out

Sep 12, 2011 15:42 UTC

Now that fears of a double-dip recession are on everyone’s mind, the bears are on the prowl and really cranky.

What’s the best way to tame our fears and become confident long-term investors? Let’s listen to what some of my favorite bears have to say and then take a look at the big picture.

The most ominous threats are that of a European bank failure or double-dip recession that would slam both the U.S. and Eurozone. One of the most vocal ursines — Nouriel Roubini, professor of economics at New York University — starts out his jeremiad by asking the question “Is Capitalism Doomed?”

Days of simmering carbon rage in the post 9/11 world

Sep 9, 2011 19:03 UTC

By John Wasik
The opinions expressed are his own.

Three friends were recently arrested for sitting in front of the White House to protest a potentially damaging Keystone XL tar sands pipeline. They were joined by actress Darryl Hannah, environmentalist Bill McKibben and more than 1,200 others.

Although they were handcuffed, stuffed into a paddy wagon like livestock and quickly released after paying a $100 fine, they believed their civil disobedience was instrumental in bringing attention to a damaging fossil fuel production process. They are all in their seventh decades and highly educated, but felt they needed to make a stand.

A decade removed from the horror of 9/11 and what’s changed in our attitude towards ecology, energy and economics?

Financial advisers consistently ask the wrong questions

Sep 6, 2011 18:04 UTC

Traders work on the floor of the New York Stock Exchange in New York July 25, 2011. REUTERS/Lucas Jackson If you go to see a financial adviser and you are only asked two main questions — how much money will you need in retirement and what’s your risk tolerance? – you should run for the hills.

Financial advisers who are shackled by conventional wisdom or just looking for numbers to plug into off-the-shelf portfolio software may be asking you the wrong questions.

You deserve a more customized approach, and can get one if you demand it.

Because it’s difficult to pin down a number that represents a decent lifestyle. It’s a moving target for many of us, and most of us are lousy judges of risk. Estimates can be tragically wrong.

Where is the real U.S. jobs plan?

Sep 2, 2011 10:00 UTC

Jobs, justice and peace. Have three themes ever been so intimately intertwined since Dr. Martin Luther King, Jr., championed this tri-partite campaign in his 1967 March on Washington?

Unemployment is ravaging the country, especially among urban minorities. Yet Congress has yet to put forward a comprehensive jobs plan to create employment. We’re still fighting two wars and garrisoning troops in Europe and Japan as the jobless rate soars at home. Debt reduction is still a priority over job creation.

The current economic downturn has put the brakes on economic progress for most of the American working class. They shared in widespread growth during the 1990s, but have been falling behind during the latest recession.