Record low gas prices, IMF on China & U.S.

Rand Uranium back in business

Rand Uranium back in business

New Year’s Economic Resolution

As we reflect on 2010 and look forward to a fresh start in 2011, we should be deciding how to make this year better than the last. Economic activity has certainly picked up and we are in much better financial shape than we were a year ago, however, the unemployment rate remains stubbornly high at around 10% and the sovereign debt issues continue to plague the global economy.
As our nation enters the 235th year, the question that I ask myself is, “Did we honor our ancestors and founding fathers who paved the way by working so hard to give us the freedom and liberty we enjoy?” My answer today is “Yes & No”.
Yes, we all did work hard in 2010 to pull ourselves up by our bootstraps and get the country back on solid footing. The commuter trains full of able-bodied and hard working people continue to run back and forth to the cities everyday, the schools are busy educating the future of America, and our roads, bridges, and tunnels are continuously being maintained by construction crews working day and night. I believe these are the unsung hero’s and the people who make our nation great.
No, we did not pay off our debts and learn the valuable lessons of frugality that were learned during The Great Depression and led to decades of economic prosperity. The national debt now stands at approximately $14,000,000,000,000 (not including the unfunded liabilities of Social Security and Medicaid according to www.usdebtclock.org) and a vast majority of that is owed to foreign countries who may or may not have our best interests in mind.
As the citizens of this nation go back to work in 2011, I hope that the politicians in government will show leadership and get our fiscal house in order. The future of The United States of America depends on it.

The Power of the ETF

For decades, the mutual fund was king and investors searching for relatively inexpensive diversification would use these investment pools as a great way to spread risk with the benefits of professional portfolio management. Today we have some new, less expensive and more flexible tools available to retail investors. The ETF, or Exchange Traded Fund, looks and acts like a mutual fund (known as a “plain vanilla” in Wall Street parlance) but has some very unique characteristics.
The most distinct difference is that an ETF can be bought or sold at anytime during the trading day whereas a mutual fund can only be bought or sold at the end of the trading day. As a benefit to long-term investors, an ETF will usually have less turn-over than a mutual fund which can help lower the end-of-year tax bill. Another bonus is that an ETF will usually have a much lower annual expense ratio (typically .50%) than a mutual fund (typically 1.50%). If you can get the same no-load index fund for more than -1.00% cheaper per year, that can add up to serious savings over the long term!
Specialty ETF’s have also added investment tools that were not available to retail investors in the past. New funds have recently been set up to allow access to commodities (such as gold), currencies (such as euros), and international stocks. In the past, these types of alternative investments were only available to well-healed hedge fund investors with $1 mil+ of liquidity or veteran traders willing to open expensive commodity and currency trading accounts on margin.
ETF’s are one of the greatest modern breakthroughs for investment management tools to emerge in the past decade. Please feel free to contact me to discuss investment opportunities in these exciting new products.

Michael T. Maloney, CFP®
845-300-8282

A Raging Bull in China

China is now the second largest economy in the world. China’s annual growth has averaged 10% over the past 30 years making it the largest exporter and the fastest growing major economy. China covers approximately the same land area as the United States (3.7 million square miles) but has a population of 1.3 billion people (compared to 300 million people living in the U.S.). Therefore, the prospect for continued growth going forward is tremendous.
A vast majority of Chinese live without the simple luxuries that we in the U.S. may take for granted such as running water, washer / dryers, and cell phones. As the Chinese economy shifts from being an export-driven economy to a more consumer-driven economy, it should help the citizens enjoy the fruits of their labor and create a larger middle-class. If China can simultaneously eliminate carbon emissions while establishing a better infrastructure, the sky is really the limit for the Chinese Dragon.

Please contact me for information about how to take advantage of investment opportunities in China.

Michael T. Maloney, CFP®
MTM Capital Partners, LLC

845-300-8282

www.mtmcp.com

Summer Stock Market Volatility

The summer doldrums are now upon us and the long dog days of summer have kept the volume on Wall Street very low. The old adage, “Sell in May and Go Away” has been good advice so far. An investor would have been very well served to have sold stocks on May 1, 2010 (May Day) and went off on a nice vacation to spend their summer on the beach worry-free.

The rest of us, however, have experienced some extreme volatility as the stock market has been moving sharply between gains and losses. Unfortunately, with interest rates next to zero it has become very difficult for investors to earn a return on cash which has forced savers into riskier asset classes.

I am pleased to announce that I have recently launched my company MTM Capital Partners, LLC to offer local financial planning services and investment advice. Please contact me directly for a free no-obligation consultation.

Michael T. Maloney, CFP®
MTM Capital Partners, LLC
845-300-8282

SILVER is the new GOLD

Gold has hit an all-time high of $1,250. The flight-to-safety trade is starting to take on a different flight pattern away from U.S. treasury bonds to Gold. We are starting to establish a real base of support for Gold prices at the $1,200 level. The sovereign debt concerns in Europe (1.00 Dollar = 1.19 Euro) are beginning to shed light on to a much larger global sovereign debt problem that stretches around the globe from the U.K. to the U.S. Bill Gross of Pimco was recently quoted as saying that the 30 year bull market for bonds is over.

As Gold continues to soar to new heights the sister precious metal Silver has not moved in tandem. The New York Post has recently reported that J.P. Morgan is under investigation for manipulation of the Silver futures market. The allegation is that Morgan pushed down Silver prices when bullish news broke during 2009 to keep the price surpressed.

The historical relationship between Gold and Silver has been 20:1 which means that Silver is historically priced at 5% of Gold. Within the Roman Empire, Silver was acknowledge to always be priced at 10% of Gold, however, the supply of Silver during that time period was much more limited. Therefore, even at a 20:1 ratio Silver would now be priced at $62.50!!!

Current Price: $18.00 per troy oz.

http://www.bloomberg.com/markets/commodities/cfutures.html

The best way to buy Silver (other than physical), is SLV for unleverage or AGQ for 2x leverage.