When Will Apple’s Watch Become Relevant

The smart watch is a relatively new innovation. I can see some value for it in my personal life. When will the Apple iWatch provide a relevance to their bottom line? We may be able to make some connections based on past generation cycles of their products. As you can see the iPad sales peaked in the 4th gen releases. It stands to reason that the iWatch will follow suit… I assert it will take a few product cycles to entice new consumers and bring the entry costs down while simultaneously adding innovative features. A Morgan Stanley analyst estimated that the iWatch sales will boost sales by $17.5 billion. This was prior to the official release announcement. I am personally cautiously optimistic.     If you look at the fitness tracker industry, you can see that there is a significant market share tied with the FitBit. There is almost no doubt that Apple’s iWatch will cut into the that market share. I wouldn’t be surprised to see future generation releases continue to chew into it. At this point in time, I will personally hold off on purchasing a watch… My wife, however, is another story all together! She’s already “selling” me on buying her this as a gift. Full Disclosure – her gift lists are a mile long and ever rotating!           Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions for a full...

Bonds: Watch Out for 2018-2019

The Federal Reserve is faced with a challenge to possibly raise rates as the economy picks up more strength. Investors have weathered through the taper tantrum, now through the patient panic and they are faced with flattening yield curve around the world. Companies have taken advantage of lower rates by acquiring debt for stock buy backs, converting high yield debt into lower and R&D. The Wall Street Journal put out an article on how investors are scooping up these bonds. Here are some telling charts put out by Doubleline’s Jeffrey Gundlach in his March presentation on challenges facing the bond markets – specifically in 2018-2019:   The U.S. Federal government is faced with budget deficits that they’re funding with new treasury issues. High yield debt faced with a potential for defaults. Investors are faced with low yielding “safe” debt to add to their portfolio. As a result, they have shown an appetite for moving up the risk spectrum – chasing yield. Investors are working through this or so it appears. I’m the first to say that I’m not sure what the typical investor should do with their fixed income exposure…I have my own projections and I’m sure you have yours!  Whatever you decide with your fixed income exposure, make sure to continue to stay diversified based on your risk profile. Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions for a full...

Don’t Get Crucified – Get Diversified

Diversification Diversification. You’ve heard the terms a lot through your life of investing. There is a reason for that. It’s not that the vast majority of financial advisors are looking to take advantage of clients… Well maybe one – Mr. Bernie Madoff. I will be candidly honest with you; I’m too pretty for prison. The only pin stripes I want to wear are in my suit. A reduction in volatility is a primary goal of diversification. The goal is to reduce the fluctuations that your investments will have. Over a specific duration with an equal rate of return your investments grow. There are countless ways and reasons your investment will have volatility and I don’t want to bore you with those variables. Let’s simply take a look at some basic math and data to illustrate the point. Let’s assume that we take a portfolio valued at $10,000 over 4 years time with a 10% average return with the investments. The portfolio with a reduced volatility will have more net dollars at the end of the period than one with greater volatility. See the chart below: Volatility Drives Down Compounded Interest $10,000 $10,000 Year 1 10% $11,000 Year 1 10% $11,000 Year 2 25% $13,750 Year 2 10% $12,100 Year 3 -30% $9,625 Year 3 10% $13,310 Year 4 35% $12,994 Year 4 10% $14,641 Average Return 10% $14,293   Average Return 10% $16,105 Well there you have it – reduction in volatility has a net higher dollar amount. I hope by now you’re starting to realize there is some method and strategy here. It’s important to take into account...
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