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Comments of the 1st Quarter of 2015 May 27, 2015

Posted by shaferfinancial in Finance.
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I will do this in outline form for brevity:

The stock market continues to rise although at a lower rate than 2014.  At some time in the near future we will see a correction. This is a much needed event as we have not seen a correction in quite a few years.  For those who are invested long term we use these events as an opportunity to pick up bargains.

EIULs continue to perform as structured.  As a group sales of EIULs broke a record and have attracted the attention as a threat to whole life companies as well as mutual fund/stock companies.  New rules will come down that will severely limit the ability to illustrate these policies at anything close to real world experience.  This won’t stop the attraction of EIULs to folks looking to secure their financial future.

The price of oil made a move up this quarter, but has since stalled.  World oil production continues to be a record levels while demand has seen some growth.  China demand for oil up 9% with 6% the result of transportation [SUV sales up 50%].  India up strongly too.  US demand up with strong increase in miles driven and sales of SUVs up.  Even some positive movement in Europe.  Russia and Latin America lag in demand for oil.  Saudi Arabia sees increase in internal use.

North American tight oil [which I don’t invest in], has seen falling production since the first of the year.  This should really take affect in the second half of 2015 reversing the current world wide overproduction of oil.

My energy stocks moved up, but are significantly in the red.  Despite this, I remain confident in their ability to get back in the black over the next 24 months.

Berkshire Hathaway off its highs but continues to do well in this environment.  It produces a huge amount of cash flow each day.

Real Estate rents remain strong in the US.  Prices continue to increase as bankruptcies and foreclosures decrease. Real Estate remains a great place to invest.

The overall dividend environment for blue chip companies is positive as dividends continue to move upward.

If you had followed the strategy [ies] that I advise you would be in great shape for whatever happens next.

1. EIUL [protected against market downdrafts and taxes]

2. Investment Real Estate [rents continue to increase]

3. Dividend producing Blue Chip Stocks [dividends continue to increase]

4. Annuities [for guaranteed life long retirement income]

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