Financial News Friday – September 13, 2013
“What Has Your Equity Hedge Fund Manager Done For You Lately?” A great question posed over at the always entertaining Zerohedge. The chart above shows how hedge funds have become more and more correlated with the S&P 500 as the number of hedge funds has increased. Basically, your 2 and 20 gets you a risk/return profile similar to the S&P 500 and the privilege of paying high fees for it. (Zerohedge)
On Wednesday, September 18th, the FOMC (Federal Reserve’s Open Market Committee) will meet to decide the fate of quantitative easing, its $85 billion bond and mortgage backed-security buying program. In May Bernanke spooked the markets with talk about reducing bond purchases, so he’ll have to tread carefully with his statements, as the market’s exuberant growth has largely been due to the liquidity provided by the Fed’s bond purchases. (Yahoo Finance)
After the recent Nasdaq outage, which halted trading for about three hours, the SEC gives US exchanges an ultimatum: you have 60(ish) days to implement a ‘kill switch’ and create more robust systems. At the end of 60 days the SEC will check in to make sure the kill switch is mostly completed. (Reuters)
According to FINRA many investors are susceptible to fraudulent sales pitches. Some interesting statistics here, “Men were more likely to be solicited (87%), more likely to engage (42%) and more likely to lose money (14%) in a potentially fraudulent activity than women.” And “42% found an annual return of 110% for an investment appealing.” Here’s a bit of a reality check, not even Warren Buffet, when he had small amounts of capital, could have promised a return of 110%. He made his first millions by averaging around 30% per year in his limited partnership (it’s a compound average so some years were higher and some lower, but all the same.) So if a 30% compounded return will quickly turn you into the one of the world’s wealthiest investment managers, how can anyone suggest you could earn 110% returns per year? (Think Advisor)
History of Friday the 13th. It’s estimated that world consumption decreases by $700 or $800 million on Friday the 13th “because people won’t conduct business as usual.” (Business Insider)
United Airlines accidentally posts $0 to $10 fares. Oops. (Yahoo Finance)
“A financial professional may use various titles whether or not he or she is registered or licensed with a regulatory authority” the bulletin gives the example of a certification that is valuable to investors, the CFP® (Certified Financial Planner™) and how to verify if a planner has their CFP®. (NASAA)
The minimum wage in California is to rise from $8.00 to $10.00 per hour. (Yahoo Finance)
Dell founder Michael Dell finally wins his bidding war with Carl Icahn over Dell. Dell is to become a private company once again. The company plans to invest more in the PC and table markets.(Reuters)
Twitter announces it’s IPO…via a tweet. Company was valued last month at $10.5 billion by GSV Capital Corp. (Bloomberg)
Hilton to go public once again (Reuters)
Also, I just finished another video for Retirement Planning Academy, so expect that to be released sometime early next week.