Banks and brokerages have a new bail-in plan. The next time they get in trouble, taxpayers won’t have to bail them out. The customers will. How? In 2016, the rules changed around money market funds. The changes are buried in the fine print. Basically, your investment in a money market fund is subject to losses, redemption gates (a temporary suspension of your ability to sell your shares in the fund) and liquidity fees (a fee charged to sell your shares). Money market funds are not FDIC-inured.
 
Here are links to the fine print of a Schwab, Oppenheimer and JP Morgan money market fund. They are all subject to the same rules – redemption gates and liquidity fees. However, each company has a different way of explaining what will transpire if the bank needs to keep your money. Scroll to the bottom of the page to read the fine print.

Bank staff are trained to sell customers away from FDIC insured accounts and into money market funds, where they will at least earn a little return. The gates and fees were part of a plan to thwart a run on the bank. These restrictions are also the reason why you hear the federal reserve board and other bankers talk about greater stability at the banks. Since banks and brokerages can prevent you from withdrawing your money, they’re become less vulnerable.
 
How many of customers really understand what they’ve signed up for, when they agree to transfer their money out of an FDIC insured account and into a money market fund? Oftentimes, the percentage rate is only one or two percent higher. If the value of the fund shares fall, then you can lose money on the principal, in addition to having the redemption gate and liquidity fees risks. I have yet to meet any Main Street investor who has ever even heard about the rule, though many own money market funds. Either the salesman who sold them into the money market fund doesn’t understand the risks, or she does, and sold them into it anyway. Either way, when you are sold into a product that you don’t understand, you’re still subject to the terms and conditions that you signed up for. Trying to sue because you don’t feel you were properly informed is not a good strategy.
 
Never Reach for Yield
This is a reminder that in today’s world, when interest rates are so low, trying to get any return at all on your safe side can be more dangerous than you think. It is a fool’s game to gamble that everything will keep coming up roses, when deficits and debts are ballooning, while economic growth is predicted to be under 2% in 2020. (The coronavirus is predicted to impact the first quarter pretty severely worldwide, and to slow growth in most countries this year.) We all know that you cannot borrow from Peter to pay Paul forever. There comes a time when Peter wants his money back, too.
 
Another $3.4 trillion has been added to the public debt over the last three years, which has soared to $23.4 trillion. Consumer debt is higher than it has ever been, at $14+ trillion. Corporate debt has gone completely bonkers. 50% of corporate bonds are at the lowest rung of credit rating, just above junk bond status. Trying to get a measly 2% on cash, or 4% in a bond, puts you in speculative territory. The truth of the matter is buried in the fine print. You may have bond or money market funds in your nest egg that you’ve owned for years, which have now become far riskier than they were just a few years ago. Many bond funds lost money in 2018.
 
Money Market and Bond Funds are vulnerable
Cash and bonds are supposed to be the safe side of your portfolio. If you tell your certified financial planner that you are worried about the risk in bonds, then they might try to sell you into money market funds. If you balk at that, then you might get sold into an annuity or REIT (both have risks). That is just the way that a commission-based business plan works. Brokerages sincerely want you to make a return on your money. Everyone wins in that scenario. They also have to protect themselves from downturns, as business cycles include recessions.

​The Bottom Line
It’s time for you to know exactly what you own in your financial plan, and why. A good salesman will always lead you to believe that you are just fine the way you are – or sell you something else that might earn them a higher commission. That is why you have to know the ABC’s of Money that we all should’ve received in high school. If you can’t access your money, get charged to access your money, or lose your money, you don’t have much recourse, other than just to wait and hope that everything recovers sooner rather than later. The safe side of your financial plan is supposed to be protected from loss of your principal.
 
Everything is coming up roses today. Stocks are higher than ever. Real estate prices are higher than ever, and unaffordable in 71% of US cities. Debt is eye-popping & astronomical. That is why, rather than enjoying the ride (if you’re on the right side of the income disparity), it’s time to fix the roof while the sun is still shining.
 
The Wealth Challenge
That is why our team has issued a wealth challenge to you. Add up everything you have in all of your accounts, including your 401(k) your IRA, your HSA, annuity, REITs and any savings accounts you might have. Once you get that total, celebrate! Hopefully it makes you very happy to see how much wealth you have amassed.
 
Then divide that number by half. Ask yourself if you are really willing to risk losing that much money. Why? Because the last two recessions have cost investors more than that. Buy & hope is a 20th-century strategy that hasn’t worked in the 21st-century, and will not work going forward until we cycle through this period of extremely high debt and very low economic growth.

If your strategy is just to contribute and never look at your statements, then you are just riding a Wall Street roller coaster. If you lost a third or more last time and haven’t made any changes, you’re just as vulnerable today as you were in 2007. We’re at the high now. It’s time to keep your wealth.
 
Is there a better plan than Buy & Hope? Yes. Our easy-as-a-pie-chart nest egg strategy is based upon a trademarked system of Modern Portfolio Theory, with annual rebalancing, that earned gains in the last two recessions and has outperformed the bull markets in between. (Click to see Nilo Bolden’s video testimonial.)
 
The time to get wealth savvy and adopt a time-proven plan is now. You have a lot to gain by understanding what you own, and getting properly protected and diversified, and a lot to lose if you don’t. If you wait for the headlines that the economy is in trouble it will be too late to protect yourself. Politicians don’t admit that the economy is contracting until most of the losses have already occurred.
 
Call 310-430-2397 to get pricing and information on our unbiased 2nd opinion of your current wealth strategy, or to attend a 3-day life transformational investor educational retreat, where you will learn the ABCs of Money that we all should have received in high school. Wisdom is the cure.
 

Other Blogs of Interest
NASDAQ is Up 6X. 
CoronaVirus: Which Companies and Countries Will be Most Impacted.
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​NASDAQ went from a low of 1,577.03 on December 30, 2008 to a high of 9,700 by February 18, 2020. That is a 6-fold+ increase. Those kind of returns, 61.5% annualized over a 10-year period, can compound your contribution and gains into millions.

If your nest egg isn't worth significantly more today than it was in 2009, that's a sign that your financial plan is faulty.

Have you spent the last decade, until very recently, trying to gain back losses? That’s a red flag that you are adhering to a 20th Century Buy & Hope strategy that hasn’t worked at all in the 21st Century. There is a time-proven system that works. It’s time to learn it.

Did you sell low at the bottom of the market, thinking we were headed into a Depression? Are you tempted to jump in now and join the party? That is investing based upon emotions – which is always going to be on the wrong side of the trade – selling low and buying high. It is also possible that you have been led astray by listening to the wrong advice.

In truth, a properly diversified plan would not put the entire $10,000 annual contribution into NASDAQ stocks. However, this calculation is a sobering reminder of the opportunity cost of:

* Neglecting to fund your retirement accounts,
* Opting to pay off old debts before you contribute to your own future,
* Waiting until you pay off debt to invest,
* Hoping that someone else will manage your money for you
* Following headlines or investing based upon a hunch, an email or a friend’s recommendations…

Our easy-as-a-pie-chart nest egg strategies with annual rebalancing earned gains in the last two recessions and have outperformed the bull markets in between. Why? Because:
​
* You always keep enough safe, which limits your losses in a downturn,
* Your investments are properly diversified, which adds stability and increases performance,
* Adding in hot industries and countries increases performance, too,
* Overweighting safe when there is greater risk of a correction is a better strategy than market timing,
* Annual rebalancing is a Buy Low, Sell High system on auto-pilot,
* The pie chart takes the emotions out of it, prompting you to do what you are supposed to do.
In today’s world, you also have to know what’s safe at a time when:
* Bonds are overleveraged and vulnerable to loss of principal,
* Money market funds have redemption gates and liquidity fees and,
* Long-term securities are high-risk, with low reward, and expose you to illiquidity and opportunity costs.
 
It’s time to know what you own, to be the boss of your money and to adopt 21st Century strategies that work. Call 310-430-2397 or email info@NataliePace.com to register for our next Investor Educational Retreat. I am also offering an unbiased 2nd opinion on your current strategy. Wisdom is the cure.

Other Blogs of Interest
CoronaVirus: Which Companies and Countries Will be Most Impacted.
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

As of February 14, 2020, the CoronaVirus had claimed the lives of 1,382 individuals, with more than 64,000 known cases of the virus. That is a very high mortality rate for a virus, at 2.2%. Most of us think about getting over a cold or flu within a few days or weeks, so having a deadly virus like COVID-19 is alarming and causing an “abundance of caution” for a great many people around the world, particularly any company that has a factory or store in China. Many U.S. companies fall into that category – particularly in the technology industry. 
 
There is a cruise ship quarantined in Japan, where sadly one person passed away. (There has also been a death in the Philippines.) Travel in certain areas of China has been severely restricted. On Feb. 12, 2020, Mobile World Congress 2020 Barcelona, the largest mobile communications trade show, was canceled. One of the world’s largest Chinese factories, FoxConn, has been dark since the news of the virus hit, and is still off-line. Apple headquarters and retail stores in China are closed, as are Tesla stores, though Tesla claims that their Gigafactory is back to work. Schools have been conducting classes online.
 
As Federal Reserve Board Chairman Jerome Powell told Congress on Feb. 7, 2020, “Possible spillovers from the effects of the coronavirus in China have presented a new risk to the outlook.” Before news of the virus, the economy was predicted to grow 2.0% in the U.S. in 2020 and 5.9% in China. Economists have warned that China could dip as low as 3.8%. 

Although the multinational companies are scrubbing the Internet of news of their store and factory closures, it seems pretty clear that the factory closures will cause global supply chain disruptions and inventory backlogs and lackluster product sales in China in the first quarter of 2020. The only real questions are, “How much?” and “Which countries and companies will be impacted the most?”
 
Which Countries and Companies Will be Impacted the Most By COVID-19?

• China is the Factory to the World: Makers of the world’s electronic devices will experience supply chain disruptions and backlogs. Apple will be impacted in both sales and the supply chain. Samsung recently moved their factories to Vietnam, Thailand and Indonesia, so the impact on Samsung’s inventory could be minimal. The fashion industry, which is already seeing major retailers and brands go bankrupt in the Retail Apocalypse, will also be hit.  
• China Buys a Lot of Technology & Fashion from the U.S. and Europe. 15% of Apple’s revenue comes from China, with 30% coming from Asia (including Japan). (Email or call our offices if you’d like access to the COVID-19 Stock Report Card.) Qualcomm and Broadcom revenues are concentrated heavily in China – with 47.8% and 35% of revenues coming from China, respectively. Microchips from Intel and AMD sell in China, as do artificial intelligence software (Nvidia, Micron & Xilinx). China accounts for roughly 12% of Nike’s global sales. See below for a chart of select companies with the percentage of revenue that comes from China.  

​ 

• The FoxConn factory in China, which produces a substantial portion (40% more or less) of the world’s consumer electronic goods for companies like Apple, Amazon, Microsoft, Sony, Nintendo and more, is actually a Taiwanese based company. So, ETFs and mutual funds based out of Taiwan, that hold a significant portion of Hon Hai, as most do, will be impacted by the factory closure.
• Tesla. Tesla’s stores and Chinese Gigafactory were closed due to the coronavirus. Tesla reported in its 8K filing on Feb. 13, 2020 that the factory is open again. (No word on the stores.) However, the Chinese government is in charge, and any factory or store reopening will have to get government approval. At this point, China only accounts for about 12% of Tesla’s revenue. However, increased sales and production in China are built into the growth strategy for Tesla, particularly now that the U.S. tax credit for Tesla vehicles has expired. The factory and store closure will undoubtedly have a negative impact on Tesla’s 1st quarter. 
• Airlines and Auto Manufacturers. Canceled flights mean lower revenue in the 1st quarter of 2020, continuing until the virus is contained. Current expectations are that the peak occurs in March. Auto manufacturers which rely upon Chinese parts could have supply chain disruptions and a backlog of orders.

 
Many companies are trying to reduce the impact of the virus on their next earnings report by widening their forward projections. Qualcomm has a forward outlook on revenue of $4.9-$5.7 billion, with non-GAAP earnings per share of $0.80 to $0.95. That is an unprecedented $800 million window of revenue room to be right in. Apple did the same, projecting revenue of $63-$67 billion, with a $4 billion spread. If earnings hit the low end of the target range, then the headlines could be kind. A miss might create concern, at minimum, and alarm if the miss is, well, alarming.
 
The bottom line is that the coronavirus, and the important steps that have been taken to contain the outbreak’s spread, will slow down the world’s economy. Store closures, factory suspensions, travel restrictions and health concerns have put multinational manufacturing on hold, Chinese consumer spending on pause and global citizens on high alert. With any luck, the virus will be contained quickly, and the mortality rate will drop to zero. However, things play out, there will be a negative impact on the next earnings season in April, and on global growth in 2020.
 
Listen to my free teleconference on the subject at BlogTalkRadio.com/NataliePace.

Are you interested in protecting your wealth now, while stocks are at an all-time high? Call 310-430-2397 to register for our next Investor Educational Retreat.
 
Investor Educational Retreats
We are hosting an Earth Day Retreat in England April 24-27, 2020, an iconic Santa Monica Beach Retreat June 5-7, 2020 and a Wild West Arizona Adventure Oct. 10-12, 2020. Visit NataliePace.com for additional information on these retreats. Register by Feb. 29, 2020 and you’ll receive the best price. Call 310-430-2397 or email info@NataliePace.com to learn more and to register now. 

​Other Blogs of Interest
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​As a child, there was a female in our family in a prominent position who spread rumors, gossip and lies about other women. In so doing, she was able to sequester our father, and keep him all to herself. As a result, my father had very little contact with his children for decades.
 
A lot of people will say, “There are two sides to every story.“ In that experience, there were indeed two sides to the story. There were the lies, and there was the truth. The gossip, rumors and lies were very loud and ever present. Sometimes they were built upon a small amount of truth, which would be blown completely out of proportion, and into a crisis. Other times, they were completely fabricated. All of the lies added up to an ultimatum. “Do you choose them or me?”
 
Love doesn’t like to enter into the fray and fight like a liar. Even when attacked, love never seeks to harm, not even an attacker. (When the weapons are words, and the person caught in the cross-fire is a loved one, it’s hard to make a case for self-defense.) So, love, and truth, might retreat. However, even on the horizon, or out of view, love is still love and the truth is still the truth. They are quiet, constant fires that refuse to be extinguished. They gather their strength. Their return will not be loud.
 
In a sense, love never left. My wishes and prayers were constant for my father. As I gained understanding about the mental health challenges of the woman who had sequestered him, and the abuse she had suffered in her life, I slowly developed compassion for her. I practiced loving unconditionally, while also protecting myself from attacks. I lived far away, but attempted short visits. At first, it was only a meal every year or so. That led to more contact, but never long, and always with an eye on my back and the exit.
 
In all fairness, I cannot say that I loved the attacker. However, I was able to get to the point where I had compassion toward her. And the lesson that I took away from the experience is that forgiveness is a gift you give yourself. Resentments are a heavy load to carry. As Carrie Fisher was fond of saying, “Resentment is like drinking poison and expecting the other person to die.”    
 
I also learned that real love is constant and quiet. Fear, jealousy and insecurity are loud. Love would never seek to harm others, or separate a family member from their tribe. When insecurities dominate the channel of one’s emotions, they can create maliciousness. I guess that is why love and all of her close companions (compassion, kindness) require practice. The heart is a muscle. It's pretty easy to feel and taste when I am letting resentment, fear, jealousy, etc. try to steer my emotions. 
 
Real love remains constant and awaits the day that you knock on her door. And when you do, you are greeted with an open heart and loving arms.
 
Love is honorable and doesn’t need to bring others down. There is no malicious gossip on the tongue of a truth-telling lover. Even when someone is headed on the wrong path, there is no need for carping. Compassion might be the warmth that guides the lost back home.

​So my wish for each of us today is that we immerse ourselves in love, and her companions of warmheartedness, kindness and truth.
 
My father now has a good relationship with all of his children. Because love always wins. 

Happy Valentine’s Day. 

​​With love to you, and gratitude for you being in our tribe,
 
Natalie

Other Blogs of Interest
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

On February 4, 2020, Tesla hit an all-time high of $969/share, for a total value of $175 billion. Today, the stock has pulled back to $748.96/share, with a market capitalization of $132.43 billion. That is $49 billion more than the combined value of General Motors and Ford Motor Company, with market caps of $48.18 billion and $35.60 billion, respectively. If you invested low in Tesla, and are now a gazillionaire, congratulations. If you are tempted to buy in now, then splash some water on your face, and let’s take a closer look at Tesla’s price and potential.
 
The real question is, “Is Tesla worth GM and Ford combined?” The answer today is, “Yup, if you listen to investors.” However, if you look at the data, the valuation seems quite a bit frothy, even with the share price pullback over the last few days. Tesla’s sales of $24.58 billion in 2019 are still a fraction of GM’s $147 billion & Ford’s $160.34 billion. Investors are betting on Tesla’s sales growth, particularly in China. However, Tesla’s 2019 year over year revenue was up only 2%. 4Q 2019 net income was $105 million, with a full year loss of -$775 million. Yes, sales in China will start ramping up and showing on the earnings going forward. However, that is at least partially offset by the expiration of the federal EV tax credit, which makes Tesla cars much more expensive in the U.S.
 
There’s no question that Tesla has become the greatest market disruption success story of the early 21st century. VOIP never displaced AT&T. Rather than offering a secure, private and democratic way to bypass banks, cryptocurrency has been rife with crooks and scams. However, Tesla set out to make gas guzzlers a thing of the past, and is making good on its promise.
 
Tesla started with a sexy Roadster in 2008 that could beat a Porsche from zero to 60. The Tesla Roadster was a far cry from the golf cart electric vehicles available at that time. In 2013, the Tesla Model S scored the highest safety rating by the NHTSA. The Tesla 3 launched in 2017, and quickly became the #1 bestselling car by revenue in July and August of 2018. The Tesla 3 is still the #7 bestselling car in the U.S. Both Ford and GM were pushed out of the sedan business by Tesla in 2019. General Motors’ CEO Mary Barra believes that self-driving electric cars are the product of tomorrow, and is investing heavily in “a future of zero emissions and zero accidents.” Jim Hackett, Ford’s CEO, is leaning into EVs as well, with plans to launch 16 EVs by 2022.
 

​The purchase price of a Tesla 3 is higher than the 6 cars ahead of it (all made by foreign manufacturers). However, the dramatically lower costs of fuel and maintenance make the cost of ownership lower than the bargain brand competition. This story has not been well-marketed, however. The average car buyer is not be in the loop on this yet, and is still making purchases based on price, not quality and fuel/maintenance savings.



 
Tesla’s solar roof tiles look amazing. However, revenue from Tesla’s energy storage and generation vertical was lower in 2019, despite a 30% federal tax credit being in play. I spoke to a developer recently who declared that the price of the solar roof tiles is absolutely eye-watering. Price and financing options are likely to have hands in the slow rate of adoption.  Once price becomes as appealing as the product, solar roof tiles could take the world by storm. We’re not there yet.
 
Investing in a cash negative car company that is currently valued at 1.3 billion times more than earnings seems foolish in any marketplace and downright delirious in the late stage of the current business cycle. Elon Musk has been tireless, crafty and magical in achieving milestones that seemed impossible. Tesla cars are stunning feats of ingenuity, performance and beauty. However, betting that Tesla will continue to be the only electric luxury sedan in town (around the world) is a dangerous game. And valuing the company at 1.5 times the value of the other two major American automakers is a little too early to declare a complete knockout by Tesla of the competition. Anyone who has been in the Northeast and has witnessed how fearful drivers are of driving an EV in the snow understands that this market has a way to go to completely displace gasoline-powered vehicles.
 
Both Ford and GM are currently constrained by a last century business model and execution plan. Ford and GM sales come mostly from gas guzzling pickup trucks and SUVs. Additionally, Ford and GM are still heavily weighted down by legacy promises of pensions and other post-employment benefits (OPEBs), such as health care. GM exited bankruptcy in 2009. However, the company’s debt/equity ratio is still 1.56. GM is currently underfunded on its pensions and OPEBs by $17.2 billion (#5 on the most severely underfunded list). Ford’s D/E is 2.82, with $11.86 billion underfunded on pensions and OPEBs (source: S&P Dow Jones Indices).
 
By comparison, Tesla has no pension obligations. Tesla has a lot of debt, too, and is carrying a D/E of 1.76. However. Tesla’s debt is being used to build more factories to keep up with demand. GM and Ford are borrowing to pay for legacy promises that they are having difficulty keeping.
 
Ford’s plans for innovation and relevance in the autonomous electric vehicle marketplace is further complicated by potential capital constraints. The company was downgraded to junk by Moody’s in 2019. Ford is paying a yield of 6.7% to stockholders to keep them interested. The strategy of high dividends accompanied by massive borrowing and declining sales didn’t work out very well for GE. When GE cut its dividend, the stock fell by half instantaneously. GE shares are valued at about a third of what they were in January of 2017. GM and Chrysler both had to restructure their debt in the Great Recession. Ford skirted restructuring in 2008. However,  Ford suffers from the same legacy costs that took down the other century-old auto manufacturers.
 
Ford’s unit sales were down 10% in 2019 (from 2018), with revenue off 3%, to $156 billion. Net income imploded. Ford’s 2019 net income was just $84 million, down from $3.7 billion in 2018 and $7.8 billion in 2017. With over $154 billion in long-term debt, and $220.5 billion in total liabilities, restructuring could be forced on Ford Motor Company, which is one of the reasons why the company is now rated “speculative.”
 
The CoronaVirus
All three of these U.S. car companies have sales and supply chains in China. So, the coronavirus is another variable that casts shade on Tesla’s sunny stock summit. With any luck, the coronavirus scare will pass soon, without too much economic impact or more deaths. However, that is another variable that makes the current frothy valuation quite speculative.
 
I love Tesla cars, and believe strongly in this company. However, this valuation is too rich for my blood. If I were in the money, I’d be selling.
 
 

Other Blogs of Interest
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

AI is On Fire. Is it Time for S’More?
Or Will the General Marketplace Drag Everything Down?
 
Artificial intelligence and machine learning are affecting all parts of our lives, from autonomous vehicles, to the way that social networks decide which ads we see, and how law enforcement tracks down criminals. The industry is on fire. Should you buy in?
 
Advanced Micro Devices just announced 4Q 2019 earnings, with revenue of $2.1 billion, which is up 50% year over year from 2018’s $1.42 billion. Net income was also impressive at $170 million, versus $38 million in the 4th quarter of 2018. Nvidia is projecting revenue growth of about 34%, when the company announces earnings around Feb. 21, 2020.
 
AMD announced earnings after the markets closed. Investors responded by selling off. The share price dropped 4.12% in after-hours trading today. Hmmm. Why are investors getting cold feet over one of the hottest companies and industries on the street? This is where AI has something in common with cannabis 2018. It’s got a lot to do with valuation, and less to do with quarter by quarter fluctuation. AMD announced that the next quarter will have $1.8 billion in revenue, which represents year over year growth of 42%, but is a sequential drop of about 15%. AMD explains the sequential drop as seasonality and the calm before the next gen product release. By comparison, Apple announced revenue for the last quarter of $91.8 billion, and forecasts that the next quarter revenue will be $63-$67 billion. That’s a 27% sequential drop!
 
If customers like Dell, IBM, Nokia and others are choosing an AMD competitor, and the sequential drop is an indication that AMD is falling behind the pack, then it’s understandable that investors would opt out. However, investors are far more likely to get skittish if they are “out over their skis.” If you worry that you might have overpaid to begin with, or that your recent windfall might evanesce, then you’re more likely to bail out with as much as you can as quickly as possible. Should a company with full year income of $341 million be worth $56 billion, with a price to earnings ratio of 245? (The historical average price to earnings ratio is about 17.) Nvidia’s price to earnings ratio is 68.
 
Artificial intelligence is definitely an industry of tomorrow, something that is reflected in our daily lives and in the revenue growth. The question is only one of price. You could have purchased Nvidia for $131/share last May. Should you be jumping in today for $250/share? AMD has more than doubled, to $52 from $19. However, can the AMD share price remain high if the general marketplace weakens? That’s another headwind that investors have to factor in.
 
4Q 2019 U.S. GDP
Tomorrow, the Federal Reserve Board will release their statement on the economy. The governors are widely predicted to hold rates where they are.
 
On Thursday, January 30, 2020, at 8:30 am ET, the Bureau of Economic Analysis will release the advance estimate of the 4th quarter U.S. GDP growth. Projections are coming in at 1.2-1.8%. That’s a very weak showing, which is likely why the Dow Jones Industrial Average is down 651 points since the high set on January 17, 2020. Stock futures are down, predicting a slight sell-off again tomorrow.
 
In the late stage of the business cycle, even with one of the hottest industries in the world, price matters.
 
Incidentally, I did find one AI company, which is trading near its 52-week low, that is partnered with Microsoft on face recognition.
 
Join me at my Stock Master Class Feb. 7, 2020 and my Investor Educational Retreat from Feb. 8-10, 2020 in Cocoa Beach, Florida to learn essential tips for increasing your trading success, to adopt time-proven strategies for protecting your future, and assets and even to discover how to save thousands annually in your budget with smarter big-ticket choices. Call 310-430-2397 or email info@NataliePace.com to learn more.
 
 
 
 
 

Other Blogs of Interest
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Add up everything you have in your retirement accounts (401K, IRA, insurance, annuity, savings, etc.) and in your home equity (the difference between the value of your home and what you owe on it), and then divide that by half.

$250,000 401K
$ 50,000 IRA
$200,000 Equity in Home
$500,000 TOTAL

$500,000 divided by half = $250,000

Then ask yourself these questions:

“Are you willing to risk losing half of your wealth?”
“How would you feel if $250,000 vanished over the next twelve to eighteen months?”
​
That's what is at stake. In the last 2 recessions, investors lost more than half of their liquid assets. The Dow Jones Industrial Average dropped 55% in the Great Recession. The Nasdaq Composite Index sank 78% in the Dot Com Recession. Over 10 million homes have changed hands since 2007, and 3.5 million mortgages are still underwater (the loans are 25% or more higher than the value of the home). 

Investing in the 21st Century requires a new strategy. Last Century ideas, like Buy & Hope, haven’t worked since 2000 and are unlikely to work until we cycle through the astronomical debt we’ve amassed, so that economic growth can kick in again. On January 30, 2020, the Bureau of Economic Analysis will release the advance estimate of 4th quarter 2019 GDP growth in the U.S. This report is expected to be under 2%. The Atlanta Federal Reserve Bank is forecasting 1.8% growth, while the New York Federal Reserve Bank believes the number will be closer to 1.2%.  

2% GDP growth is nowhere near enough to pay for the tax cuts of 2017. (Americans were promised GDP of 3%, as a conservative estimate.) Rather, the massive increase in public debt, which has soared to $23.2 trillion, is slowing, rather than growing, the economy (as was promised). Below are the projections from the Federal Reserve Board for 2020-2022, and the GDP growth rates for 2017-2020. 

GDP Growth in the U.S. 2017-2022

​Yes, real estate prices and stock prices are back to an all-time high, while unemployment is at a historic low. That’s really great. However, that was the case in 2000 and 2007, too, before the last two catastrophic downturns.

The pundits tout high stock prices and low unemployment as evidence of a great economy, without including the red flags that are clearly seen in the chart above. When asset rallies are fueled by low interest rates, rather than by economic growth or an increase in wages, bubbles form, just as they did in the previous two recessions. If you are too young to remember what happened in the Dot Com Recession and the Great Recession, the charts at the beginning of this blog offer a dire warning.

According to AttomData, the average wage earner cannot afford to buy a home in 74% of U.S. housing markets. According to Nobel Prize winning economist Robert Shiller, the only two times that the historic CAPE ratio of stocks has been this high was in 2000 and 1929, before the Dot Com Recession and the Great Depression, respectively. The Asset Bubble chart (above) reveals that the amassed debt, and the underfunded pensions, along with other historically high leverage, makes us more vulnerable today than we were in 2000 or 2008.  

When prices become unaffordable, asset bubbles tend to pop. As you can see from the chart above, Asset Bubbles were all inflated before they popped in 2000 and 2008, even while unemployment was low and the economy was still growing.

However, interest rates this time around are starting out much lower than they did before the previous two recessions. That means that even the “safe” side of your retirement plan is at risk because the Federal Reserve doesn’t have any room to cut rates to boost growth. On November 13, 2019, when Federal Reserve Chairman Jerome Powell testified before the Joint Economic Committee of Congress, he warned, “The current low interest rate environment may limit the ability of monetary policy to support the economy.”

Ford was downgraded to speculative bond status in 2019. General Electric has lost 2/3rds of its value over the past two years. These are not one-off events. Over 50% of corporate bonds are at the lowest rung, just above junk bond status. In fact, corporate bonds have lost money over the past few years.

This is a long way of saying that, rather than celebrating or being complacent that your home and retirement plan have gained back the losses they suffered in the Great Recession, it’s a good idea now to make sure that you keep those gains this time. Buy & Hold is really just riding the Wall Street rollercoaster, up and down. It’s a far better idea to fix the roof while the sun is still shining. There are certain years when protecting what you have could be your biggest payday (and not doing that could be your biggest nightmare).

So What Works?
Our easy-as-a-pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. They cost less time and money, while allowing you to sleep at night knowing your assets are protected, and you are earning money while you sleep safely. Click to watch Nilo Bolden talk about just how easy protecting your wealth is. Scroll to the end of this blog for additional, true testimonials, some from economists and VIPs, others from Main Street.

So, how can you learn The ABCs of Money that we all should have received in high school? You can read about these strategies in my bestselling books. You can call our office at 310-430-2397, or email info@NataliePace.com, to receive an unbiased 2nd opinion on your current plan. Or you can join me at an upcoming Investor Educational Retreat, where you can learn this time-proven system, implement it in 3 life-transformational days and go home with a plan that works immediately and for the rest of your life.

Investor Educational Retreats
We are having a Florida Beachfront Retreat Feb. 8-10, 2020, an Earth Day Retreat in England April 24-27, 2020, an iconic Santa Monica Beach Retreat June 5-7, 2020 and a Wild West Arizona Adventure Oct. 10-12, 2020. Visit NataliePace.com for additional information on these retreats. Register by Jan. 31, 2020 and you’ll receive a complimentary coaching session, valued at $300. Call 310-430-2397 or email info@NataliePace.com to learn more and to register now. 

Be the Boss of Your Money
Nobody cares about your money more than you do. It’s important for you to be the boss – to know what you own and why, and to adopt a strategy that is right for you at this stage of your life. Do not have blind faith that someone else is doing this for you, particularly if their plan lost you 25% or more in the last downturn. Wisdom is the cure, and is critically important at this late stage of the business cycle, as we enter the 12th year of the current bull market.

Testimonials
“My husband spoke with Natalie Pace, and after a brief discussion, she charted a plan on the back of a napkin. I decided to take her advice. Soon after, we had the big crash. I was one of the few and lucky people who actually made money (instead of losing). So, thank you Natalie, for saving my retirement!”
Nilo Bolden, executive director at a law firm in Century City, CA
 
We asked Natalie Pace for a second opinion on our investment portfolio. She researched and reviewed each stock and fund. She then explained to us in plain English how we were positioned in the market and how high our risk exposure was. Her knowledge was so profound that we decided to take her retreat in Arizona. My husband was still quite skeptical, but 20 minutes into the retreat he turned to me and said "Thank you." Stocks and investing are no longer rocket science. We are finally able to take control of our money. We give thanks just about every day that we met Natalie. I feel like I live on a different planet. I'm so grateful. Thank you for changing our lives, our peace of mind, our future and our vision of what is possible - not to mention our stomach acid. We made a tectonic shift with you.
AC & AM

"College students need the information before they get their first credit card. Young adults need it before they buy their first home. Empty nesters can use the information to downsize to a sustainable lifestyle, before they get into trouble."
Joe Moglia, chairman, TD AMERITRADE
 
“Many people, including educated men and women, often get into trouble when they neglect to follow simple and fundamental rules of the type provided in [Natalie Pace’s] book.  This is why I recommend it with enthusiasm.” 
Dr. Gary S. Becker.  Dr. Becker won the 1992 Nobel prize in economics. 
University Professor, Department of Economics and Sociology and Professor, Graduate School of Business, The University of Chicago

“Provides almost fool proof methods for growing wealth over the long haul.” 
Success magazine.
 
“Our CFP manipulated us into investing in private placement REITs. I now know that these are very high risk. Many of these companies have been cash negative for years, borrowing from one investor to pay off another, and paying brokers a high commission to do that. We put in the paperwork last year to cash out of these. Nothing!!! Then we redid the paperwork in August, so we could get the next payout for December. They say that you can only get out of these things twice a year. If you miss the window you have to wait again. We did everything by the book. Once again trusting this would be taken care of.  Waiting…waiting…nothing. David, the salesman who put us into these investments, is not even returning our calls!!!!  We both have called every week for several weeks now and nothing!!!
D&T
(read more of this story by clicking here)
 

Are you an Einstein in investing? A complete novice? Check your Investor IQ with the 25 questions below.
 

1. What is the one question you should ask your Certified Financial Advisor before hiring him/her?
2. What are 3 red flags that your financial plan is in peril?
3. How much of your nest egg should you keep safe?
4. What's safe?
5. What is the average return of stocks over the last 10 and 30 years?
6. What is the average return of gold over the last 10 and 30 years?
7. What is the average return of real estate over the last 10 and 30 years?
8. What was the top performing investment in 2019? 
9. How long will it take for you to have a nest egg as big as your annual salary if you put 10% of your income into a Buy My Own Island Fund and invest in stocks and bonds*?
10. How long will it take for your nest egg to earn more than you earn, if you you put 10% of your income into a Buy My Own Island Fund and invest in stocks and bonds*?
11. What’s the best investment strategy in a slow-growth, high-debt world?
12. Which countries hold the most gold? 
13.  Are annuities safe?
14. What were the top performing and the worst months for stocks over the past five years? 
15. What was the top performing 2-month period for stocks over the past twenty years?
16. What was the worst investment in 2019, NASDAQ, gold, the Dow Jones Industrial Average, bonds, Bitcoin, cannabis or real estate?
17. Which year is expected to perform better, 2020 or 2021, based upon historical returns of election years?
18. How many companies are in the Dow Jones Industrial Average?
19. How many Dow Jones Industrial Average companies were bailed out or went bankrupt in the Great Recession?
20. How much did investors lose during the Great Recession?
21. How much did investors lose during the Dot Com Recession?
22. Does Buy & Hope work? If not, what does?
23. Why is it that so many investors are unable to Buy Low and Sell High?
24. What is the 3-Ingredient Recipe for Cooking up Profits? 
25. What are the Four Questions for Picking Winning Stocks?

 
 
Answers are listed in the article "Investor IQ Test Answers 2020" in my blog at 
https://www.nataliepace.com/blog/.
 
Email info @ NataliePace.com or call 310-430-2397 if you have any questions about this test, or about the answers, or if you are interested in learning time-proven investing, budgeting, debt reduction, home buying solutions that will transform your life.
 
 

Other Blogs of Interest
Answers to the 2020 Investor IQ Test.
Win a Seat at a Retreat
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
Counting Blessings on Thanksgiving.
Real Estate Prices Decline. 
Hong Kong Slides into a Recession. China Slows. 
They Trusted Him. Now He Doesn't Return Phone Calls.
Beyond Meat's Shares Dive 67% in 2 Months.
Price Matters. 
Will There be a Santa Rally? It's Up to Apple. Will JP Morgan Implode on Fairy Tales and Unicorns.
Harness Your Emotions for Successful Investing.
What the Ford Downgrade Means for Main Street.
The Dow Dropped Over 1000 Points
Tesla's 3Q 2019 Deliveries Could Hit 100,000.
Do We Talk Ourselves into Recessions? Interview with Nobel Prize Winning Economist Robert J. Shiller.
​The Winners and Loser of a Clean Energy Policy. 
Make the Climate Strike Personal. 
Ford is Downgraded to Junk.
From Buried Alive in Bill to Buying Your Own Island.
The Manufacturing Recession. An Interview with Liz Ann Sonders.
Gold Mining ETFs Have Doubled. 
The Gold Bull Market Has Begun. 
The We Work IPO. 
The Highs and Hangovers of Investing in Cannabis. 
Recession Proof Your Life. 
China Takes a Bite Out of Apple Sales.
Will the Dow Hit 30,000? A Check Up on the Economy
Red Flags in the Boeing 2Q 2019 Earnings Report
The Weakening Economy. 
Think Capture Gains, Not Stop Losses. 
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Answers to the 2020 Investor IQ Test. by Natalie Pace.
 
Jan. 20, 2020

1. What is the most important question you should ask your Certified Financial Advisor before hiring him/her?

"How much of my portfolio should I keep safe?" This question will help you to determine whether you are dealing with a trusted professional who is looking after your best interest, or a salesman who is looking to make a quick buck. The answer to this question, as we enter the 12th year of the current bull market, is, "A percentage equal to your age for sure. But this late in the business cycle, we might consider overweighting even more safe."

One more important thing. Bonds are highly leveraged, subject to credit risk and vulnerable to capital loss. So, you need to understand what’s safe, rather than just relying upon bonds to keep you safe.

Now is the time to clearly know exactly what you own and why. Consider getting an unbiased 2nd opinion. Call 310-430-2397 or email info@NataliePace.com for pricing and details.  

2. What are 3 red flags that your financial plan is in peril?

• If you lost 30% or more in the Great Recession and you haven’t made any changes, you’re more vulnerable today than you were then. Don’t confuse a bull market with wisdom. Everyone has made money since 2009, except in 2018, when everyone lost money – even on their “safe” side, in bonds.
  
  
• If you have more than just a few pages of holdings in your financial plan, your gains could be destroyed in fees and commission. You are not as diversified as you believe, as pages and pages of holdings can still just be the same type of holdings over and over again. You’re more at risk than you know.
  
  
• The NASDAQ has increased is almost seven-fold over the low of March 9, 2009. The Dow Jones Industrial Average is up about 4.5 times. If your returns over the last decade are lower than this, your plan needs reviewing.
• Never confuse a bull market with wisdom. Your nest egg recovered because we’ve been in a bull market and the wind has been at your back. When the tides turn, losses can incur quite swiftly. Wisdom and time-proven systems are the cure. (Natalie Pace’s easy-as-a-pie-chart nest egg strategies, with annual rebalancing, earned gains in the last 2 recessions and have outperformed the bull markets in between.)2. What are 3 red flags that your financial plan is in peril?

3. How much of your nest egg should you keep safe?

A percentage equal to your age. Consider overweighting more safe when the economy is stumbling or a bull market is going into its 12th year (as is the case in 2020). In today’s world, it is important to know what’s safe. Bonds lost money in 2018, and are riskier than most investors realize. Money market funds have redemption gates and liquidity fees.

4. What's safe?

Hard assets will outperform paper assets in a world where there is too much paper money, financial inequality and broken promises floating around. So, the mantra is “safe, income-producing hard assets that you purchase for a good price.” It’s hard to buy real estate at a good price in 2020. You don’t want to be all in on hard assets because you also need liquidity and cash flow. That is why some of the best hard asset investments are those that reduce your monthly expenses (for life). I spend one full day on What’s Safe at the Investor Educational Retreats. Educate yourself now on the best income-producing hard assets that are right for you now, so that when prices are more attractive, you know what you want and have the means to move on it. Call 310-430-2397 to learn more.

5. What is the average return of stocks over the last 10 and 30 years?

Large cap stocks earned 13.56% annualized over the last decade and 9.96% over the 30-year period. Small cap stocks performed at 12.4% and 11.2%, respectively. (Asset performance graphs, and more, are available to 2019 Retreat Attendees.)

6. What is the average return of gold over the last 10 and 30 years?

Gold returned 2.69% annualized over the 10-year period and 4.37% over the last 30 years. While gold doesn’t look like much on paper, gold mining stocks doubled in 2016, and are currently on sale for 75% off. The all-time high of $1,895/ounce in gold occurred in September of 2011, the month after Standard and Poor’s downgraded the U.S. credit.

7. What is the average return of real estate over the last 10 and 30 years?

Real estate prices are higher today than they were before the Great Recession – meaning real estate is largely unaffordable. According to AttomData, average income-earners are unable to purchase in their community in 74% of U.S. cities. During the Great Recession, about 10 million homes changed hands, and 3.2 million U.S. homes are still underwater. There is nothing worse than buying high in real estate! It can ruin your life for decades. Over the last decade, real estate has performed at 5.80% annualized. (The losses of the Great Recession are no longer included in this statistic.) Over a 30-year period, real estate increase 6.1% annualized.

8. What was the top performing investment in 2019?

Bitcoin rose almost 14X in 2017. Cryptocurrency burned investors in 2018, with losses of up to 82%! However, after starting 2019 at $3700, Bitcoin ended the year at $7191, almost doubling, for gains of 94%. That’s the best performing investment, by far.  

9. How long will it take for you to have a nest egg as big as your annual salary if you put 10% of your income into a tax-protected (and financial predator proof) individual retirement plan and invest in stocks and bonds*?

7 years. Based upon 10% average annualized returns of stocks and bonds over a 30-year period, which is about what those assets have done over the 30-year period, from 1990-2019.

10. How long will it take for your nest egg to earn more than you earn, if you put 10% of your income into a tax-protected (and financial predator proof) individual retirement plan and invest in stocks and bonds*?

25 years. Based upon 10% average annualized returns of stocks and bonds over a 30-year period, which is about what those assets did from 1990-2019.

11. What’s the best investment strategy in a slow-growth, high-debt world?

Hard assets hold their value better than paper assets when there is too much paper floating around. Market timing doesn’t work. Pouring everything into real estate can be vulnerable, as you still need liquidity. It’s not a good idea to just put everything into cash and real estate. So, learn how to diversify properly (you don’t need 18-pages of holdings), avoid the Bailouts, add in hot industries, keep enough safe, overweight safe in volatile times and rebalance 1-3 times a year. Most, but not all, hard assets are overpriced right now, so it offers a good period of time to research and determine exactly what is right for you. There are some excellent hard assets that are worth considering, which is why I spend one full day on this topic at the Investor Education Retreats.

Value capital preservation more than reaching for yield. It will allow you to buy low when things are on sale.  

​12. Which countries hold the most gold? 

The United States is the top holder of gold worldwide, by far, with 8,133.5 tons, followed by Germany, All ETFs, the International Monetary Fund, Italy, France, Russia and China. China and Russia have been on a gold buying spree since 2008. Reports are that they will start trading oil and other commodities using their own currency backed by gold, breaking free from the dollar. (Click to read my report on Russia and Gold.) There are multiple reports that the U.S. banks and brokerages have been selling their client’s gold assets (sometimes without permission) in a price fixing scandal, which has kept gold prices in the U.S. and Europe lower than the rest of the world. Deutsche Bank settled a lawsuit, and agreed on Dec. 2, 2016 to name names of other banks that were price-fixing gold. 

13. Are annuities safe?

Insurance products, including life insurance and annuities, aren't insured by the FDIC. If we had not bailed out AIG in 2007, more than 50 million annuity holders would have been in real trouble. Your annuity product is only as safe as the insurance company that is selling it to you. Recessions are hard on insurance companies, so we may see some troubled insurance companies in the next recession (as we did in the Great Recession).

Insurance products are like being a renter. If you can’t pay, you get tossed out. Many people pay for life insurance their entire working life, and then can’t pay when they retire – when they are really most in need. If you put that money into your own tax protected account, you could save on taxes, compound your gains, and it would be there for you when you retire, even offering some income, in addition to the capital. 

14. What were the top performing and the worst months for stocks over the past five years? 

July, November and February performed best over the 5-year period (in that order), on average. December, August & May were negative months.

2019 Retreat Attendees receive charts of the top-performing months and election year trends. If you’re interested in learning more about our 3-day, life transformational investor educational retreats, call 310-430-2397 or email info @ NataliePace.com.

15. What was the top performing 2-month period for stocks over the past twenty years?  

March & April – the Spring Rally – performed the best over the 20-year period, but saw only a 2% rise in the 5-year trend. December 2018 was the worst performing December in history, killing the historical returns of the Santa Rally.

Understanding seasonal trends can help you with your annual rebalancing in your nest egg, and with your selling strategy for your trading. I spend one full day on what’s hot, teaching you how to identify the best investments of the year, in my Investor Educational Retreats.

16. What was the worst investment in 2019, NASDAQ, gold, the Dow Jones Industrial Average, bonds, cannabis or real estate?

Cannabis was the worst investment in 2019 – with many companies losing half or more of their value. Canopy Growth dropped to a low of $13.81, from heights of $50/share in 2019. Learn more about Cannabis in my January 2019 blog and teleconference.

17. Which year is expected to perform better, 2019 or 2020, based upon historical returns of election years?

2020 is an election year. Traditionally, election years are strong performers. However, the 10 and 20-year returns are wiped out due to the Great Recession (losses of 55%) and the Dot Com Recession (losses of up to 78% in the NASDAQ). 2000, an election year, was the beginning of the Dot Com Recession. 2008, an election year, ushered in the devastating Great Recession. The post-election year (2021) is looking strong over the 10-year period, but is typically one of the weaker years.

18. How many companies are in the Dow Jones Industrial Average?

30 companies. Many are household brands. And many are carrying far more debt than the value of the company. Leverage has begun to concern economists. Over 50% of the corporate bonds are at the lowest rung, just above junk bond status. If you don’t understand how much debt corporations are holding, it’s time to learn The ABCs of Money that we all should have received in high school. General Electric isn’t the only blue chip that is likely to slash its dividend and lose market value. Ford Motor Company isn’t the only name brand about to be downgraded to junk bond status. Click to access the names of the 30 companies. The Dow Jones Industrial Average was launched in 1896.

19. How many Dow Jones Industrial Average companies were bailed out or went bankrupt in the Great Recession?

Most don't realize that 20% of the companies of the Dow (6 companies: AIG, American Express, Bank of America, Citi, JP Morgan and General Motors) were bailed out or went bankrupt in the Great Recession. Others, like General Electric and Ford, received support. New Chips, like Apple, Google, Amazon, Facebook and Netflix, are far safer, and higher performing, than Blue Chips, both in terms of growth, but also in terms of the fiscal health of their balance sheets. Learn more about how to add in performance and avoid the bailouts in your funds and retirement account at the Investor Educational Retreat and in The ABCs of Money. Since the Great Recession, the NASDAQ Composite Index has offered far superior returns than the Dow Jones Industrial Average, even factoring in dividends. In fact, the higher the dividend, the higher the risk.

20. How much did investors lose during the Great Recession?

The Dow Jones Industrial Average lost 55% in the Great Recession. Yes, the markets have come back. But it is important to realice that Buy & Hope has lost more than half in both of the last two recessions. You can’t afford to lose more than half every 8-10 years, crawl back to even, only to lose more than half again. It’s time to step off of the Wall Street Rollercoaster and into time-proven, easy systems that work. Buy & Hope is a last century plan that hasn’t worked in the New Millennium and will not work going forward.

Returns of the Dow Jones Industrial Average
Oct. 2007 – March 2009
​
​

21. How much did investors lose during the Dot Com Recession?

Investors lost up to 78% in the Dot Com Recession, when the Nasdaq Composite Index dropped to a low of 1,114.

Returns of the Nasdaq Composite Index
March 2000 – October 2002

22. Does Buy & Hope work? If not, what does?  
Buy & Hope has been losing more than half in each recession since 2000. Due to the amount of debt and leverage, and the slow rate of growth, Buy and Hold will not work going forward (until those problems are dealt with and cycled through).

Our easy-as-a-pie-chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. Working off of the pie charts, instead of the brokerage statement, allows you to take the emotions out of the plan, and rely, instead, upon a time-proven system. Email info@NataliePace.com or call 310-430-2397, if you’d like a customized, sample pie chart.

Annual rebalancing is also a key component of this plan. Annual rebalancing is a buy low, sell high system on auto-pilot for your nest egg – prompting you to do what you should be doing each year.


23. Why is it that so many investors are unable to Buy Low and Sell High?

Buy low, sell high is a mantra that everyone knows. So, why do so few investors do it? There are a few reasons…

• They are employing Buy & Hope in their nest egg, or have selected a plan based upon the year they wish to retire (a Buy & Hope strategy that is riding the Wall Street rollercoaster).
• Buy low, sell high is easy to say and hard to do. When stocks drop, like cannabis stocks have recently, the average person believes they’ve made a “bad investment” and are tempted to sell low. When stocks are high, like U.S. stocks are today, investors get complacent, or even buy more, under the delusion that things will keep going up, up and up and FOMO. In other words, stomach acid, FOMO and emotions work against the time proven mantra.
• Finally, most people don’t buy low because they can’t. When you ride the Wall Street rollercoaster or buy real estate high, the only option available to you is to ride out the downturn and pray for recovery. Enlightened investors who have a time-proven plan, who have preserved their capital and are properly diversified, are in a great seat to buy low when the opportunity presents itself.
  
  
  

24. What is the 3-Ingredient Recipe for Cooking up Profits?

1. Start with what you know and love
2. Pick the Leader
3. Buy low; sell high (easy to say; hard to do)

This recipe, along with my Stock Report Card, Four Questions, market strategies and data drilling are how I earned the ranking of number one stock picker. The recipe is easy. Learning how to use these tools requires practice. You must begin by locating and analyzing data, which is actually less time and far more informative than reading articles, which have a fraction of the information and might be written by a novice. Come to my next Stock Master Class on February 7, 2020, the day before the Florida beachfront Investor Educational Retreat to learn firsthand (from me) how easy and effective this strategy is, and why it has worked through bull and bear markets for more two decades now, while most strategies have bankrupted investors. Call 310-430-2397 or email info@NataliePace.com to learn more.

25. What are the Four Questions for Picking Winning Stocks?

The Four Questions for Picking Winning Stocks.

1. What’s the product?
2. Who’s the customer?
3.  Can the company continue to make a superior product going forward and get it to their customer at the best price before the competition?
4. Who’s the CEO and can s/he motivate the employees to make the best product faster, better and cheaper than the competition?

As you can see, three out of four questions can be answered by being a good customer of the company. The 3rd question will benefit from you completing a Stock Report Card, and understanding how to use the data. So, the more you know about a company (ingredient #1 of the recipe for Cooking Up Profits), the easier it is to pick the leader.

In Put Your Money Where Your Heart Is, I used these questions and tools to compare two companies. Google scored an A (in 2006, when it had only been publicly traded for 2 years). The Wall Street darling Blue Chip, which I gave a D- to, went on to declare bankruptcy (General Motors). FYI: Using the Stock Report Card and 4 Questions, I identified both of these trends years before these major events occurred. The book was written in 2006, three years before GM went bankrupt. In fact, I applauded Google on national television before its IPO, when most pundits pooh-poohed it. This is the power of asking the right questions, rather than just listening to the mainstream media.


 
Join me at an upcoming Financial Empowerment and Investor Educational Retreats. Call 310-430-2397 or email info@NataliePace.com to learn now.
 
Yesterday our team was told yet another story about someone who lost it all by trusting in the "free" advice of a financial advisor. Learn the truth about commissions & conflicts of interest & how to get a 2nd opinion now in the guest blog “They Trusted Him. Now He Doesn’t Return Phone Calls.” Know what you own. Protect your future now!
 
 
 
Data Sources:
(c) 2020 Morningstar Direct and The National Association of Realtors. All rights reserved. Used with permission. The information contained herein: (1) is proprietary; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar, the National Association of Realtors, Natalie Pace, nor any content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
 

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​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Everyone is a winner in our 2020 New Year New You Sweepstakes. (See the full list of prizes below.) The Grand prize is a complimentary seat at a Financial Empowerment Retreat, valued at $1,650. (You have four retreats to choose from in 2020).
 
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