Alchanati Campbell & Associates
Gold, real estate, Prop 13, blockchain and don’t be a smart be a smart.
Gold, not a safe haven anymore? Gold is both a commodity and an alternative currency. There’s very little correlation between gold and 10-year inflation-linked Treasuries and gold has no inverse correlation to equities. Over the past 20 years, gold and the S&P 500 have experienced a daily correlation of negative 0.003 percent indicating almost no relationship. But there is a strong inverse relationship between gold and the USD, and that has been the cause of the decline in gold in the past months. Some say gold is no longer the historic safe haven as it once was…
Real estate. Buyers are getting squeezed by rising mortgage rates and by prices climbing about twice as fast as incomes. Sellers are getting ‘jumpy’. Purchases of new homes are at their slowest in 8 months and existing-home sales dropped in June for a 3rd straight month. Inventory has increased and there is less competition. 65% of Americans said it’s a good time to buy a home, the lowest since 2008.
Fun fact: Buying a home nationally is 26% cheaper than renting an equivalent home.
Proposition 13. Under prop 13, property tax increases on any property were limited to no more than 2% per year as long as the property was not sold. Prop 13 capped property tax rates at 1% of full cash value at the time of acquisition. This tax advantage was also extended to inherited property. The controversial issue is California is losing billions of dollars in revenue due to the inheritance tax break, and 63% of homes inherited under the system are being used as second residences or rental property.
Moment 4 Life. Sometimes, what you don’t have is just as important as what you do have. Change is only as good or bad as the response to it. Live what you preach and accept your reality as best as you can. They joy in life grows from being in the moment and really enjoying the little day to day things that make life worth living. We are not given a short life but we make it short, and we are not ill-supplied but wasteful of it. Life is long if you know how to use it.
Another Hike Incoming? As many of you may know by now, this was a record setting week for the U.S. Equities market. By closing time today, both the S&P 500 and the Nasdaq were settling in at their record highs to enjoy the weekend. Jerome Powell, Chairman of the Federal Reserve, gave a speech in Jackson Hole, Wyoming today, ensuring the country that all is pleasant. Let us dive in as college students across the country dive into their studies, or beer cans. Powell stated the unemployment, currently at 3.9%, is sitting pretty near the 20 year low. "Most people who want jobs can find them," Powell said, which is sure to sooth. Inflation is hovering at the FOMC (Federal Open Market Committee) target level of 2%, without any current indicator of future acceleration beyond that target. Powell emphasized the balancing act that he and his colleagues must engage in in terms of rate hiking. On one end of the spectrum, they can act too quickly and prematurely halt a booming economy. On the other end, they can act too slowly and risk allowing the economy to burn out, which wouldn’t end well for the global economy. He believes that the current, gradual rate hikes as the way to go here. Thus, come late September, we can expect to go on a hike.
Your first baby step to having a brighter future… knowing what Blockchain is. To simplify things, blockchain is a technology that records data in realtime. It is impossible to go back and manipulate what the data says, when it was sent, or any other detail pertaining to the data. The major question is, why is this so important to have? Well in a world where you have no choice but to have so much trust in these major institutions, its a breath of fresh air to have a system in place where data is stored in a completely public, online ledger, which can be audited at any time. Blockchain technology was created in 2008 by Satoshi Nakamoto, who has never been identified, as a alternative choice to using financial institutions. This technology was then implemented in 2009 into bitcoin. The first real transaction was in 2010, when 2 pizzas were bought for 10,000 btc. You can do the math to see the growth that BTC has seen since 2009, to today, where its being valued at a little over $6400.
Learners are made not born (proven by a growing body of research including Marcel Veenman’s study)… don’t give up on yourself. Here are three practical ways to build your learning skills:
In the world of sports. 40 years ago yesterday, the black mamba was born. August 24, 2016, the city of Los Angeles has declared "Kobe Bryant Day" to celebrate the historical tenure of the retired Lakers legend. Bryant has gifted the city where he played his entire career with five chips and an MVP (08’) to go along with 18 all star selections. He is one of only three players to have played for the same franchise for twenty straight seasons, others include (Dirk and Duncan). Turning our attention to golf, the 2018 FedEx Cup playoffs are underway with Tiger Woods in top 20 in the FEC standings. He’s not just in the playoffs, but likely to make it to the final event! He actually has a chance to win… Tiger’s last win came in 2013 at the WGC-Bridgestone Invitational. But 2013 was four back surgeries, a DUI, and treatment ago. Keep tuning in to see if Tiger can come out victorious at PGA Tour this season for a grand total of $67 million in prize money.
The Alchanati Campbell and Associates Team
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WHAT'S UP FRIDAY? is a weekly newsletter that will give you a summary of "What's up?" on Wall Street, in the US and around the World written by The Alchanati Campbell and Associates Team. What makes us unique is we focus on long-term knowledge; knowledge that will still be useful to you 10 years from now.