Starting Today, November 30, $1 Trillion Starts Moving to China

Starting Today, November 30, $1 Trillion Starts Moving to China By Dr. Steve Sjuggerud Monday, November 30, 2015

Nobody is talking about it… but two incredibly important things are happening TODAY that have to do with China's financial markets… These two things are just the beginning… The two things happening today represent the beginning of up to $1 trillion moving into Chinese financial assets. (That $1 trillion is not my number. It is from two giants of finance – Standard Chartered and AXA Insurance.) I'll share both of these big changes with you today and tomorrow. First, let's look at what's happening in China's currency… China will finally join the global superpower club.  Today, China's currency, the yuan, will likely be allowed to join the big four currencies – the U.S. dollar, the euro, the Japanese yen, and the British pound – as the fifth member of the International Monetary Fund's currency (the Special Drawing Rights, or "SDR").  Specifically, earlier this month, the head of the International Monetary Fund ("IMF"), Christine Lagarde, said:  "The IMF staff assesses that [China's currency] meets the requirements to be… [included] in the SDR basket as a fifth currency, along with the British pound, euro, Japanese yen, and the U.S. dollar."  Here's the timeline for all of this…  The IMF will OFFICIALLY announce if the yuan gets to join its SDR reverse currency basket today. If the yuan gets approved, China will "join the club" on October 1, 2016.  The thing is, it's already a foregone conclusion…  There's no need to wait to hear the answer. You see, any country protesting the inclusion of the yuan would look like an idiot at this point. So what does this mean? In short, it's a vote of confidence in China's drastic reforms by the world's major powers.  This move is largely symbolic (as none of us actually use the IMF's currency). What it means is far more important in the long run… It means that China's currency "passes the test." China's currency is finally considered to be as legit as the other four, in the eyes of the world's superpowers.  Most folks are blowing off the significance of this. I think that's a mistake…  After today, hundreds of billions of dollars will likely flow into China's currency in the coming years, and from a variety of sources… As a reserve currency for central banks… as a way for investors to diversify outside of the U.S. dollar… as a speculation… as a medium of exchange in global trade… etc., etc.  The era of China's yuan as a legitimate currency starts today. (You can check www.IMF.org to be sure it happened.)  My humble suggestion is, get your money there first…  Tomorrow, I'll show you what's going on in China's stock market… And why it gives us an incredible investment opportunity right now.  Good investing,  Steve Source: Daily Wealth Follow us on Twitter: @blacklioncm

Investment Advice TO a World Champ

Investment Advice TO a World Champ By Dr. Steve Sjuggerud Tuesday, January 13, 2015

I met a legend over the weekend… He's a now-retired international sports hero. I don't want to share his name today, because he told me quietly that he could use some financial help, and he probably wouldn't want that word out in public. I didn't really answer him when we were together. But as I thought about it later, the right advice for him is the same advice that I would give to you… This is serious stuff. I urge you to take it seriously, and commit these ideas to memory. Let's get started:  1. Nobody will care more about your finances than you.  This is critical for you to embrace, immediately. Nobody is going to care more about your finances than you. You simply can't just find somebody smart and hand your money responsibilities off to them.  You can't just hand off your life and hope it goes okay – this is your life we're talking about! How many rock stars and sports stars have you read about that are broke today because they handed off this responsibility? Don't do it.  The quicker you take control and ultimate responsibility with your money, the quicker you will start building your legitimate fortune. And you can't ever give up that responsibility.  Let me be clear… It is alright – even smart – to work with smart people, and to delegate some of your money responsibilities to carefully chosen people. The important part is, you just can't "check out." You have to be the team captain here… the captain of your money ship.  2. There is no magic bullet, or shortcut.  You didn't become a sports legend by taking shortcuts. You had to work harder than the next guy, learn more than him, and focus with more intensity than the next guy to achieve your goals.  If you want to invest successfully, you have to do the same thing. You can't get by on one hot tip after another. The shortcuts don't work. This leads us to the third idea…  3. If you don't understand it, don't buy it.  It's easy to get dazzled by promises of big profits… It's even easier to get sucked in when the promises are accompanied by slick brochures and fast talk with a lot of words that you don't understand.  You'll save yourself a lot of loss (and time) if you remember this: If you don't understand it, don't buy it. Don't ever cheat on this one. It will cost you.  4. Buy investments that are 1) cheap, 2) hated, AND 3) in an uptrend.  I've built my wealth and reputation on this philosophy. In short, you can't buy what's already incredibly popular – because if you do, chances are you've already missed it. Instead, you have to buy what people are skeptical of.  Separately, waiting for an uptrend is a crucial part of this strategy as well… It helps take the risk out of the idea, and it helps "confirm" that your investment thesis is "right."  If you want my opinion today, property is probably your best bet. Here's why:  It's surprisingly affordable (when you factor in today's record-low interest rates). I say "surprisingly" because most people look at house prices versus incomes, and they wrongly assume that house prices are expensive. The correct way to look at it is relative to monthly payments (interest rates). And based on that, house prices are plenty affordable after all.  Also, investors are skeptical about property now, wrongly thinking that it is overpriced. (So it is hated – or at least not loved). AND property is in an uptrend. PERFECT.  Best of all, you can understand it. You hold the keys, you paint the walls… with YOUR property, you control your destiny.  My money is where my mouth is with this one… Back in 2010, I owned no property outside of my home. Today, property makes up the biggest percentage of my own financial assets – by far.  Property is what I'm doing with my own money.  You will always hear about ways to make higher returns, or faster ways to make a buck, than property. But chances are today you'd be risking much more than you can imagine, relative to the potential reward. It's simply not worth it.  Again, right now, property is affordable, unloved, in an uptrend, and understandable. You control your destiny, to a better degree than with other investments. Particularly if you are not an expert in investing, and don't intend to be, then property makes sense for you.  I could go on and on about "do's" and "don'ts" when it comes to your money… But I won't.  Instead, let's leave it at these simple-but-absolutely-critical points…  1. Nobody will care more about your situation than you, so don't hand off your finances. 2. There is no magic bullet or shortcut. (The "hot tip" doesn't exist.) 3. If you don't understand it, don't buy it. (If it sounds too good to be true, it probably is.) 4. Buy investments that are cheap, hated, and that have started their uptrend. That's it. Commit these points to memory.  Again, property, right now, ticks a lot of these boxes. That's where I'd suggest you start…  Good investing,  Steve Source: Daily Wealth Follow us on Twitter: @blacklioncm

How to Start Out in Stocks – Here at Record Highs

How to Start Out in Stocks – Here at Record Highs By Dr. Steve Sjuggerud Tuesday, December 31, 2013

I just received a fantastic letter from "Pastor Mark" – a new subscriber… Pastor Mark's fear is the "right" fear to have right now… He is worried about buying in at this point, after the U.S. stock market has run up so much and is sitting at record highs. Boiling it down, he says, "I don't really want to buy into some of the positions that have already run up so much." He asked me to share "some practical insight, guidance, or suggestions on the best way to enter the positions and what positions might want to be avoided if entering in at this stage of the game." Pastor Mark says he's new to investing. Fortunately, he's been "doing a lot of research and reading," which is clear from his letter. And he says he's "ready to jump in, albeit with fear and trepidation." Pastor Mark, you are not alone in your worries… I am certain thousands of other folks are thinking the same things you are right now. Let me focus my answers on how to start out buying now, especially with stocks at new highs… 1) You can ALWAYS find reasons NOT to invest… the hard part is overcoming those reasons.  This is one of the most important concepts you can possibly learn…  In December of 2010 in DailyWealth, I wrote: There's ALWAYS a reason NOT to invest. It's incredibly easy NOT to invest. It's much more difficult to puff your chest out, hold your head high, set your fears aside, and put your money to work. You can always come up with an excuse to NOT put your money to work. In that essay, I said, "Nobody will fault you for not investing. Meanwhile, you won't make any money."  I highly recommend you go back and read that DailyWealth…  You will never be a massively successful investor unless you understand this concept and learn to overcome it.  Having said that… when stocks are at new highs:  2) You must play good defense, first and foremost.  Before putting new money to work, the first question you must answer is, how much money are you willing to lose? I am serious…  Most people are thinking about how much money they could potentially make, or how much they've missed out on. But you can't control either of those. But you do have some control over how much you are willing to lose…  For example, you could use "trailing stops" and/or stop losses. If you have $50,000 in savings, and you are not willing to lose more than $5,000 of that, then you must use 10% "stop losses" across the board. This is even more crucial after a huge run-up in stock prices. (You can read more about trailing stops and other stop losses right here.)  3) Don't worry about how much stocks have gone up… worry about what you are getting for your money.  There's no denying that U.S. stocks have gone up – a lot. But with bonds paying you next-to-nothing, and your savings account paying you even less, U.S. stocks are still a good value compared with all other financial investments. If you are worried about buying them here, read No. 1 on this list again.  4) Be willing to look beyond U.S. stocks.  I believe European stocks and emerging markets are better values than the U.S. stocks today.  You may wonder why I keep buying U.S. stocks when I think these other countries are better deals.  I think being fully diversified across all of these sectors is the way to go. We have made money sticking with the trend in U.S. stocks, and we haven't made as much in Europe and emerging markets, but we know the value is there. Our eggs are spread out over a few baskets.  One crucial fact here… Typically, when the U.S. sneezes, the rest of the world catches a cold. What that means is foreign stocks will likely fall if U.S. stocks fall. Don't think that because you're buying cheaper stocks outside the U.S. that you are safer.  In my opinion, foreign stocks have more upside potential from here, so I want to own them. But they are certainly not immune from downside risk.  So, to invest at new highs, at minimum, you must:  1) Learn to overcome your objections.  2) Play good defense.  3) Don't worry about how much something is up… worry about what you're getting for your money.  4) Be willing to look beyond U.S. stocks.  All of these are difficult to do… You can understand these concepts rationally. But emotionally, something happens inside that makes them difficult to implement.  In addition to these few thoughts for how to buy when stocks are at new highs, I highly recommend you go back and read my 10 rules for successful investors.  Pastor Mark, I can't give you all of the answers neatly in one little DailyWealth. Hopefully today's essay gives you some of the insights – and the confidence – to do what's right for you…  Good investing,  Steve Source:  Daily Wealth Follow us on Twitter: @blacklioncm