Prosperity

It has fallen upon the consumer to make our economy strong. All the politicians, economists and talking heads on TV are telling him (that's you and me) to get out there and spend your money. Buy that new car, build a new house and fly off to some remote place for an expensive vacation.

Where did the idea that consumer borrowing is a recipe for prosperity? As I recall when I was a kid my Dad told me to work hard, save my money and invest wisely. That still seems like a good idea. Where have I gone wrong to want to live within my means and save some of what I earn?

Corporations have also taken on huge amounts of debt. Many businesses were happy with a net, net profit of 5% to 10% yet today the real cost of company debt is running about 10% which doesn't leave much for the bottom line. Fewer and fewer companies are paying dividends because they don't have enough money left over for their investors. Now many have such poor cash flow that they do not have the cash for new equipment and the banks are not in a lending mood. Profit margins are at their lowest in the past 50 years. The talking heads on CNBC-TV mention capital appreciation as the way to make your profit. Pick a good stock and watch it go up.

We have had an 18-year bull market that ended in 2000. All you needed was a dartboard to be able to choose a stock that was going up. Everyone was weaned away from dividends. As long as it was going up who cares if you get a little check at the end of the year? Here is an interesting statistic that may shock you as it did me. From 1871 to 1997, 126 years, common stocks went up about 7% per year, BUT only 1.6% of the increase was due to price appreciation. The balance of 5.4% came from dividends. And today, for all practical purposes, there aren't any.

No one, including Mr. Greenspan, is encouraging you to save money. Why? Because for every one percent increase in the national savings rate it stops the spending of $75 billion (yes, that's a B). That would slow the economic recovery and our Washington politicians don't want that. Debt has become the "in" thing. People brag about how much they owe.

If you want prosperity now and when you retire you must create it for yourself. Don't figure that Uncle Sam is going to maintain your current life style after you quit working.

Saving money, paying your bills and smart investing have not gone out of style.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

In The News:

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

This week's Mutual Funds and ETF stories
MarketWatch
The more cash a fund manager has to invest, the more difficult it is to buy meaningful stakes in the overlooked stocks that helped boost the fund's returns and grow its profile. Accordingly, by the time investors pile in, that superstar fund's stellar ...


Funds snapped up energy stocks as crude oil rebounded
MarketWatch
Investors warmed up to a sector of the U.S. stock market that struggled for years before showing signs of life over the past couple of months. Both hedge funds and actively managed mutual funds heavily increased their exposure to energy stocks in the ...

and more »

Investor's Business Daily

Wabtec Stock Pays Off For American Century Ultra Mutual Fund
Investor's Business Daily
The fund's managers hope to hit similar jackpots with other holdings in leading stocks such as Netflix (NFLX), Amazon.com (AMZN) and Abiomed (ABMD). Those stocks have gained 73%, 35% and 106% respectively this year. Overall, the fund aims to invest ...


InvestmentNews

Morningstar evolving well beyond its origins analyzing mutual funds
InvestmentNews
Morningstar's objective has been to take Morningstar Data, its largest product by revenue, and put it on adviser-oriented platforms, such as Morningstar Direct. Advisers can use such platforms to gather stock, bond, mutual fund and ETF data to create ...


UPDATE 1-US fund investors hunker down in domestic stocks
Reuters
Equity mutual funds and exchange-traded funds (ETFs) took in $3.7 billion during the seven-day stretch that ended May 23, while their taxable-bond counterparts attracted $3.1 billion, the research service said. Nine in 10 dollars that went into stocks ...


Investor's Business Daily

Nearly 2000 Funds Own Netflix Stock Today; Is That Excessive? Oil Stocks Take Breather
Investor's Business Daily
When mutual funds, banks, pension plans, insurance companies and the like decide to engage in sustained strong buying of a stock, they are relaying a key message to the individual investor or the small-scale financial advisor. These institutions are ...


4 Mutual Funds to Benefit From a Likely Rate Hike in June
Zacks.com
Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, ...

and more »

Investor's Business Daily

Stocks To Watch: Best Mutual Funds Buying These Potential Breakout Stocks
Investor's Business Daily
What sticks out when you review the latest list of new buys by the best mutual funds? Potential breakout stocks. UnitedHealth (UNH), Best Buy (BBY), Charles Schwab (SCHW) and others are stocks to watch as they may be setting up for new breakout moves ...

and more »

USA TODAY

Are you ready to start buying stocks individually? Ask a Fool
USA TODAY
Question: I want to start investing in stocks but wonder if I would be better off sticking to mutual funds. How can I tell if I'm ready? Answer: Warren Buffett has said that most investors are better off investing in low-cost index funds than buying ...


Chicago Daily Herald

Let's talk about the Big Book: Everything your family needs to know when you die
Chicago Daily Herald
The next three sections of most Big Books can detail any bank accounts; investments, including stocks and mutual funds; and, finally, a list of retirement accounts. This is important stuff, and the sooner you do it, the better your chances of achieving ...

Google News

Dont Fight The Fed

One of the great truisms of Wall Street is "Don't... Read More

The Inside Scoop on Mutual Fund Rip Offs

The bear market that showed up at the end of... Read More

How To Make, And Keep, Money Trading Stocks

If you are serious about making and keeping money by... Read More

Understanding a Stocks PEG Ratio

A PEG ratio cannot be used alone but is a... Read More

Whitewater Stock Market

Ever done any whitewater rafting or canoeing? Long periods of... Read More

Commoditizing the world

Let's discuss commodities; with the latest Enron situation, it is... Read More

Evaluation I

An insane person cannot evaluate an insane evaluation system.As you... Read More

Will the Stock Market be Lower in October?

The stock market often closes a week in the middle... Read More

Series 7 Exam

What is the Series 7 Exam? If you... Read More

Kick The Tires

Before you buy another car you walk around the lot,... Read More

Why Change Funds?

On November 17 I bought 7 different mutual funds and... Read More

Attitude Is [Almost] Everything

I often play a little game with myself when I... Read More

Top 25 Growth Funds

On Monday, November 25, 2000 Investor's Business Daily listed on... Read More

The Holy Grail (of Investment)

Every year I go to the Money Show in Orlando,... Read More

Bull or Bear?

Cat or dog? Maybe Zebra. Shucks, I don't know, but... Read More

Whos Calling?

Its dinnertime and the phone rings. It's Joe Noname with... Read More

The Club

Yesterday I received my monthly issue of MONEY magazine. This... Read More

Analysts - Do They Really Know The Stock Market?

When you become interested in a stock or mutual fund... Read More

8 Penny Stocks to Avoid

There are many good penny stock investments available, which could... Read More

How Commodity Trading Differs from Stock Trading

There are major differences between trading stocks and trading futures.... Read More

Stealth Bull

If you have been watching the stock market at all... Read More

Where Is The Rabbit?

We need a rabbit!This was a pretty horrible week for... Read More

Pension Plans

If you have a pension plan at work you will... Read More

Hedge Fund Advertising

Have you seen all those big full page ads for... Read More

Perfect Storm

Having lived aboard a sailboat for 2 years I was... Read More