Showing posts tagged interest rates

Analysts Skeptical About Operation Twist Aimed At Boosting Economy

The Federal Reserve (Fed) unveiling a new plan this week to jump start the struggling US economy - called Operation Twist. It’s actually already an extension of a program already in place since September of last year. Basically, the plan calls for selling short term debt and then buying longer term treasuries. Ben Bernanke explains that the plan would buy up securities in the market and bring them on to the Fed’s balance sheet which in turn cause investors to buy into substitute securities. So with interest rates almost near zero will Operation Twist actually encourage businesses and consumers who are not borrowing now to get off the fence. Ed Butowsky, wealth manager, financial advisor, and managing partner of Chapwood Investment Management, joins Fox News to discuss the comments made by the Federal Reserve chairman Ben Bernanke about Operation Twist and how does it impact my pocket book.


Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.

College Grads Demand Sallie Mae Forgive Student Loan Debt

College grads and students protesting outside of Sallie Mae’s shareholders meeting. They are demanding the lending giant that they forgive their student loan debt. Ed Butowsky, wealth manager, financial advisor, and managing partner of Chapwood Investment Management, joins Fox News Bulls & Bears to examine why students or their parents sign student loan agreements and then expect to not have to pay on them.


Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.

Original Article

Rising Mortgage Rates May Be Good For Economy

Goodbye record low home mortgage interest rates. The average 30 year fixed rate mortgage rate moved back above 4% for the first time in nearly 5 months. Conventional thinking says that this is bad for the economy and the housing market as a whole, but there are other economists that argue this is a good thing for the economy. Ed Butowsky, wealth manager, financial advisor, and managing partner of Chapwood Investment Management, joins Fox News Bulls & Bears to discuss the facts and the economics behind this small jump up in home interest rates - is this a sign the economy is doing well?


Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.

Original Article

Watch Interest, Earnings

Many investors are wondering why stocks continue to move higher even as the economic picture looks weak.

To understand this, investors need to understand the thinking of professional money managers, who account for 93 percent of the volume of the stock market.

They control the ups and downs of the market that we observe every day. Currently, the consensus among money managers is that stocks are 2.5 times more attractive than bonds.

This position is based on the assumption that, by their calculation, stocks are 15 percent undervalued based on expected earnings over the next year. Bonds, on the other hand, are 20 percent overvalued.

However, if interest rates start to rise and earnings growth slows , the undervaluation of stocks could quickly reverse, and we could see a major sell-off in the stock market.

So be happy that stocks are going higher today, but keep a close eye on earnings and interest rates. They’re your friend today, but tomorrow they might be your enemy.

Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry for over 22 years. Check out Ed’s discussion topics for a quick tip or two for your own financial well-being in his Media Center or follow Ed Butowsky on Facebook.

Here’s Why the Market Scares You - Fox Business Article

[caption id=”” align=”alignleft” width=”660” caption=”Ed Butowsky - Fox Business - Reuters”]Ed Butowsky Article on Fox Business[/caption]

In a recent article by Ed Butowsky on FoxBusiness.com published January 17th, 2012, Ed takes an inside look at investors and why they get scared when they look at the US stock market. In Addition Ed takes a look at what risks are associated with the stock market and its performance relative to expected earnings for companies nationwide and internationally. Here are some of these risks:

  • Europe represents 20% of the world’s gross domestic product. What concerns does Europe provoke?
  • Will interest rates rise in the US?
  • How do commodities fit into the the US economy crystal ball
  • Could Iran’s actions be a threat to the world economy?

Click here to read the full article, Here’s Why the Market Scares You.

Who is the man Ed Butowsky? Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.

Here’s Why the Market Scares You

Ed Butowsky Article on Fox BusinessIn a recent article by Ed Butowsky on FoxBusiness.com Ed examines why investors get scared when they look at the market in the current economy. Furthermore, Ed breaks down the risks to stocks and their expected earnings we enter the first half of 2012. These risks are:

  • Europe represents 20% of the world’s gross domestic product. The concern for Europe has many facets…
  • I believe that we will see interest rates on the long end of the yield curve in the United States rise…
  • Commodity prices are on the rise…
  • Iran could be a wildcard. We read non-stop about the threat from Iran…

Click here to read the full article, Here’s Why the Market Scares You.

Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.
 

Buy Stocks, Exit Bonds

I have what I believe are some investment recommendations for the New Year.

These recommendations are for anybody with an investment horizon of two years or longer. Based on the current economic environment and historically low interest rates, investors should strongly favor stocks over bonds.

Stocks are currently 21 percent undervalued based on expected earnings next year. I recommend investing 30 percent of a portfolio in a large-cap stocks that pay dividends, 10 percent in large-cap growth stocks, 15 percent in utilities, 10 percent in emerging markets, 10 percent in small-cap value, 10 percent in gold and silver, and the rest in a other alternatives.

I would recommend selling any bond mutual funds that may be sensitive to rising interest rates. Investors holding fixed-income investments ma truing in five years or longer are risking their principal.

Remember that when interest rates rise, longer-maturity bonds are hurt more than shorter-maturity bonds. It is only a matter of time before interest rates spike higher.

I think 2012 will be a good year for domestic stocks but a bad one for bonds. Those afraid of market volatility should remain in money market funds.

Preparing For Inflation

We focus quite a bit in this country on the amount of money the government is printing to artificially stimulate and support our economy.

This is a potentially devastating practice, and one that will soon trigger rising inflation. Undoubtedly, Europe will also have to engage in the same kind of artificial money creation to prop up its sluggish economy.

Investors should be forewarned that rising inflation will affect their cost of living and erode the value of their portfolios. With so much excess money sloshing around, I believe we will see dramatic inflationary and cost-of-living spikes in 2012.

To counter this, savvy investors should own stocks, not bonds. Bonds will be particularly vulnerable in a rising interest rate environment. I would suggest that investors focus on commodity and energy-related stocks. Two of my favorites in these categories are Market Vectors Agribusiness and iShares Dow Jones U.S. Energy.

Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry for over 22 years. Check out Ed’s discussion topics for a quick tip or two for your own financial well-being in his Media Center or follow Ed Butowsky on Facebook.