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Long-Term Municipal Bonds – A Bargain Deal

Posted July 15, 2013 at 10:16 am

Many of our members are looking for long-term ways to steadily grow their investment portfolio – especially when the financial instrument of choice (in this case, municipal bonds) is found at a bargain.

Some wit and wisdom on municipal bonds (munis)
by Paul Novell

The recent “taper-tantrum” over the Fed’s potential coming removal of quantitative easing has caused quite some unrest in the bond market. This has caused interest rates, in particular longer term rates (10yrs +) to move substantially higher across the board.

Long-term munis were no exception and the sell off has left some compelling value in long term munis for long term investors.

The chart below takes a long term look (from 1954) at the 20 year muni bond buyer index vs. the 20 year US Treasury. Data points are monthly and can be found at the Federal Reserve site. I also charted the spread between the two and US inflation measured by the CPI-All items (I use a 3 month moving average of the annualized monthly figures.

munis 20yr vs 20yr UST june 2013.

Two important things to note in the chart. In general, long rates follow inflation. Rates rose from the early fifties all the way through the late 70s, early 80s, and have been in a downtrend since, largely due to inflation. Starting around 2000, things change a bit.

Inflation is pretty much flat but rates trend down anyway, most likely due to lower real economic growth. The point is that inflation is a major part of nominal interest rates.

The second thing to note in the chart is that the spread between 20yr munis and the 20yr UST went negative (meaning munis yield more than UST) during the financial crisis and have not been positive since.

For example, currently 20 yr munis yield about 4.37% vs 20 yr UST at 3.11%. And that’s not taking into account the tax benefit from munis. In other words, since the financial crisis investors think the credit risk associated with munis far outweighs any tax benefit. This has never been the case in the past. There are several confusing factors here that are worth simplifying.

There is a saying the “you eat real returns”. Basically, after inflation, real, returns are what matter to your quality of life. I’d go one further and add taxes to that so what’s important to look at are after tax real returns.

I took the long term data from the chart above and subtracted out inflation and taxes (assuming a mild 25% nominal rate). The table below shows the results before and after adjustment… (continue reading)



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Binary Options Q&A / Example of our Research

Posted July 9, 2013 at 9:09 am

Our Member Mailbag is a bonus section within The Vault.

We recently received this question to our Support Center about Binary Options trading and brokerage firms :

{ Some information has been blanked out to protect Member-Only content }

From Fuzz K.

Hello guys…

I’m a new subscriber to your service and decided to perform some additional due diligence in researching further into binary options trading.

Following your suggestions, I’ve followed up on the reputations for _______ and ______ {Binary Options brokers revealed within Wealth Vault Member Area}. I’ve got bad reviews from both of them by a seasoned 10-year veteran of binary options, and he explained in full details how binary options brokers make money, and how they profit off of their members making a losing bet.

Explained also was that the majority of these brokers are horrible at paying out, in fact delaying where they can, changing spreads, pushing bonuses just to keep you locked in, and a whole slew of other tactics.

The foreign, unregulated brokers are bad, and the only suggested brokers are ___________ for Americans, and ____________ for non-Americans. The reasons these two are seemingly legit is because they are on a commission structure, and regulated by CFTC.

Can you please research these two brokers and beta-test with them and give us your take, on behalf of your subscribers?


Here is Brad’s in-depth response:

Welcome aboard Fuzz. My hat’s off to you for digging deeper into the highly-speculative and sometimes shady world of binary options trading.

What’s important to understand though, is that most of what you’ll find on blogs, forums and YouTube are people’s subjective opinions, not objective facts… which is why I take a lot of what I read and hear on the internet with a grain of salt.

There are several nuances to binary option trading that many newbies aren’t aware of. So let me share some of the most relevant ones with you which will hopefully give you a broader and more balanced perspective.

To begin with, “offshore” European style binary options brokers (such as _____________, _____________, etc.) are by definition, like a casino. I use the casino analogy because they all pretty much work the same way.

If you go to Caesar’s Palace in Vegas and you play and win, you’re winning the house’s money. If you lose, you’re losing money to the house. The same is true with non-regulated binary options brokers.

However, even though you’re essentially playing in a ‘sandbox’ with them (since they’re not trading on a central exchange), the fact of the matter is, _____________ and its international counterpart, __________________, are not the only way to go for EVERYONE just because some self-professed 10-year veteran trader says so.

By the way, ________________ and ______________ are regulated trading exchanges and clearing houses, NOT brokers.

Professional gamblers have proven that the house can be beaten and that you can make money from them IF you know what you’re doing. That percentage is similar to winning in Forex, binary options, or any other market where an average of 95% of the people lose their money and only 5% make money.

But we both know they didn’t build Caesar’s Palace or the MGM Grand because people consistently make money in casinos. Most people lose money in casinos AND trading… yet they still continue to gamble and play the markets.

The small percentage that make money are either a) just lucky or b) understand gaming and mathematics really well.

If you can count cards, you can still make money at blackjack no matter what… well, as long as you don’t get caught by the casinos. ‘Cause they won’t let you play if you consistently beat ‘em over any length of time.

Let me tie this stuff into how it relates to non-regulated binary brokers…

Have you ever met anyone who would go into a casino, play a few hands of blackjack and win, and then go home right after?

Me neither…

Because what’s better than winning?…

Winning MORE!

In general, when people win, they play more. When they lose, they play more. The more they play, the more chances there are to lose… and most lose in the long run because they overtrade.

Binary brokers make their money on volume, which is why they don’t mind paying winners.

Plus, when the winners share their profitable experience with others, it attracts others to get open up brokerage accounts so they can get in the game too.

As you’ve already learned, Fuzz, just like casinos, binary brokers don’t give anything away for free. Nobody gives anything away for free ? there’s an ulterior motive.

In our Binary Options vendor review inside The Wealth Vault, I cover how brokers’ terms and conditions work and the type of trading volume that’s required in order to qualify for the bonuses. We want members to go into it with eyes wide open, so they know what to expect if they choose to accept them.

Personally, I don’t like having any restrictions on withdrawing my money, so I avoid accepting any bonuses and free trade offers altogether.

And speaking of withdrawals, the main issue I’ve seen happen over and over is that people naively sign up for the bonuses, then try to pull out their original investment and realize they can’t due to the terms and conditions they agreed to when they accepted the bonus.

That’s when people start slamming the brokers on forums. The truth is, the majority of binary options brokers operate professionally (including _____________ and ___________________, which we haven’t received member complaints about), but there’s been nothing stopping unscrupulous companies from swindling unsuspecting investors and traders.

This is about to change, though, as CySec, the financial regulatory agency of Cyprus, recently announced its intention to begin regulating binary options brokers who set up shop there.

Last year, CySec acknowledged that binary options trading should fall under the umbrella of the Markets in Financial Instruments Directive (MiFID). As a result of this ruling, CySec will be in charge of regulating binary options activities from now on.

The other important topic I want to address has to do with the whole appeal of trading European binary options in the first place: SIMPLICITY.

You only have TWO choices: it’s either up or down. When you go to a casino, you don’t have to think real hard about betting black or red on a roulette wheel.

If you had someone sitting on your shoulder (the Binary Options signals theoretically serve this purpose) telling you two out of three times whether it’s going to be red or black, that would be fine. But the problem is it’s not a simple UP/DOWN or PUT/CALL with _______ .

It’s an entirely different ball game with a MUCH steeper learning curve, requiring you to have to learn how to trade.

As a result, the complexity of the _____________ platform becomes a major obstacle for not only newbies, but for everyone else who’s looking for a quick, hassle-free money-making vehicle.

The point is, the average person isn’t going to be able to successfully trade binary options on ___________ without having some significant training under their belt first.

The other big difference with ____________ is that it doesn’t offer all the expiry times, nor does it offer all the assets you’ll find with non-regulated brokers. You can’t trade individual stocks on _____________, only indexes, commodities and currencies.

Here’s another thing: few people know it, but ___________’s datafeed isn’t their own. That’s right, they’re the exchange, yet they don’t even have control of the price feed they provide to traders.

I spoke to ______________ the other day {the founder of Binary Options vendor we reviewed} and he said that his signals (as they currently exist) could potentially be adapted to trade on the _____________ platform.

He’s actually been trying to build a step-by-step system and signal service to make _________ simple for the average investor / trader for months. However, the challenge he’s running into is that he can’t tell you whether you should be buying an asset or selling it.

That’s because the strike price must be selected from contracts at strike levels determined by the exchange, not by you the trader. 

For example, if you receive a Binary Options signal that says buy the EURUSD pair at 1.30004, if you look at the _____________ platform, it’s going to have a strike price of 1.30000 and another strike price of 1.30010.

So you’ve got a signal that’s between the strike prices. Do you buy the one below it, or do you sell the one above it, or vice versa?

Once you get a signal, what are you supposed to do with it? That’s the part that’s missing; hence, it can get very confusing for the average person who isn’t an experienced trader.

So while _________ offers a safer, regulated trading environment, it has a complicated platform that requires a serious learning curve to profit from.

The binary options industry is still in its infancy and it’s just a matter of time before things become more and more internationally regulated. It happened with forex and it will happen with binary options as well.

Although I haven’t been able to confirm it, I heard a rumor that the well-known forex broker, ___________ is going to take binary options worldwide.

The now defunct futures broker, ___________ was in the process of doing it and actually made a deal with ____________ before they went down, but the bottom line is, nothing can stop a money-growing idea whose time has come… and binary options are hot right now.

Binary options certainly isn’t for everyone, especially those who are risk adverse… but I wanted to make sure you were given a more balanced view of the pros and cons that I think need to be taken into consideration. I hope I’ve accomplished that.

My best,


NOTE: The above is a selection from the Mailbag Q&A section of The Wealth Vault. The Mailbag Q&As are a continually-growing bonus area within The Vault that allows members to receive answers to some of their burning questions about all things investing and money-growth. To get access to the complete question and more, either login, or become a member


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When Cutting Edge Technology Meets Your Retirement Portfolio

Posted July 8, 2013 at 1:23 pm

Take a look inside Citadel Group’s Chicago Headquarters – a firm that trades more stocks than the New York Stock Exchange (NYSE) every day:



If you’re interested in essentially copying what the big boys of Wall Street are doing for a mere fraction of the cost, get your complimentary copy of our Robotic Revolution Report:



NOTE: Citadel Group is not endorsed within The Wealth Vault




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How to obtain unsecured 0% interest money!

Posted July 8, 2013 at 1:12 pm

NOTE: This post was originally shared on December 7, 2012

by Brad Wajnman

For decades, savvy investors have used O.P.M. (other people’s money) as a powerful leveraging tool to build wealth. And even though banks are still cautious about lending to consumers, there’s a literal goldmine of tax-free money out there waiting for you… that is, IF you know how to properly take advantage of it.

Make no mistake about it, the banks ARE lending (even with today’s unstable economy), you just need to know how to qualify for your share of the Billions in stimulus cash the Fed has recently pumped into the system.

And that’s where our paid-up Wealth Vault members benefit, because one of the companies listed in our member-only ‘rolodex’ specializes in helping ordinary people, astute investors, and entrepreneurs get $50,000 to $250,000 in unsecured 0% interest credit cards.

But get this; not only do they NOT charge any back-end commissions based on the cash credit lines they get you (unlike other companies), their flat fee is very fair, and they offer a 60-day money back guarantee for their services. Plus, these credit cards don’t show up on your personal credit report.

Many of our members have already received tens of thousands of dollars in interest-free cash from their service. But the best part is, you don’t need to own a business to qualify and the funds can be used for just about anything you wish.

Imagine the possibilities of what you can do with an extra $50,000 to $250,000 in cash credit.

Some clients use their newly acquired unsecured cash to replace high-interest loans, expand their business, or invest in real estate and other “set it and forget it” passive investment opportunities our members get access to on an ongoing basis.

You could start receiving your first round of interest-free cash in as little as a couple weeks from now, but time is of the essence.

We can’t predict how long the banks will be offering these kinds of amazing 0% interest terms, so in order to make sure you don’t miss out on getting some of the liquid cash that’s available to you right now, become a Wealth Vault member today…

For more information…. [ login or become a member ]

Member Login | Join Here


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Investing in contemporary art

Posted January 10, 2013 at 1:48 pm

Investing in contemporary art can be fun and very profitable…

by Harry Newton

This painting sold for $120 million in May 2012, Contemporary art is enjoying a major boom.

It ebbed after 2008, but didn’t bust. Now it continues on its parabolic way up, defying all expectations. It is more attractive to look than paperless stock “certificates.”

So that’s a benefit.

This Edward Munch’s #120 million The Scream. This is the closest I could get to it over Christmas at New York’s Museum of Modern Art.

You can see it and other more interesting (and cheaper) paintings, like these:

Figure on spending at least four hours. MOMA has grown dramatically in recent years. In addition to their permanent exhibits they have fun ones, like this shadow thingee. You perform  in front of this “projector” which transforms your silhouette into wonderful shapes.


[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Thinking More About 2013" ]

Are you interested in collecting or investing in art, but don’t know how or where to begin?

See our inexpensive kindle book:
Picture-Perfect Profits: The Definitive Guide to Buying and Investing in Art


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Return-on-Equity (ROE) is the golden number to know

Posted September 6, 2012 at 4:42 pm

by Eddy Elfenbein

Here’s a post for new investors or a helpful reminder for more experienced investors.

When you’re looking at a company, the single-most important number is return-on-equity. Forget head-and-shoulders, forget bear traps and double bottoms, forget volume, forget stochastics. Return-on-equity tells you more than anything else about how well a company is performing. It’s the best measure of efficiency, bar none.

In short, ROE tells us how much we get for how much we got.

ROE can be deconstucted down into three parts (warning, math ahead). Profits margins, asset turnover and leverage.

Think of it this way:

Profit margin is profits divided by sales.

Asset turnover is sales divided by assets.

Leverage is assets (stuff you have) divided by equity (stuff you own).

The beauty of ROE is that it works for every company. You can compare General Electric to a lemonade stand. A company like Wal-Mart may have a teeny profit margin (around 3.5% last year), but incredible asset turnover. Wal-Mart is really just one big inventory control machine. A financial company like JPMorgan has 12 times more assets than equity, but it generates less than a penny of revenue for each dollar of assets.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Why Return-On-Equity Is So Important"]


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10 tips on speculation and life

Posted August 29, 2012 at 12:17 pm

via Casey Research

In this interview, Doug Casey outlines the difference between savings, investing, and speculation.

He justifies why he would rather risk 10% of his portfolio on speculating for big gains than 100% hoping for just 10% gains.

He also explains why, as safe as you might think it is, the money in your bank account may never be given back to you.

IFRAME Embed for Youtube


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What the rich are doing with their money

Posted August 10, 2012 at 9:19 am

via Fidelity Viewpoints

Looking for a bit of optimism in the face of today’s daily drumbeat of negative news? Look no further than Fidelity’s latest survey on the mindset and recent investing moves of some 1,000 millionaire households.1

While they too see the myriad short-term risks out there for the economy and investors, they are more upbeat on the market outlook a year from now than at any time in the survey’s five-year history.

So what are the rich doing with their money? The number one investment added to portfolios in the last year was U.S. equities. And that was regardless of respondents’ outlook on the economy, financial goals, or whether they were born into wealth (14%) or made it themselves (86%).

Of course, these successful investors understand the power of building and maintaining an asset allocation mix in line with their personal style, time horizon, and investing goals.

Self-made millionaires report they also added individual domestic bonds and domestic equity mutual fund investments among their top additions, while those who were born wealthy contributed more to real estate investments and bond ETFs.

Growth-oriented millionaires were more interested in adding individual U.S. stocks, international and emerging market stocks, equity ETFs, as well as individual bonds.

On the other hand, wealth preservers were relatively more focused on CDs and other money market equivalents, as well as annuities, though they too cited individual domestic stocks and bonds, equity ETFs, and real estate as top investments in the last year.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Inside The Millionaire Mindset"]


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Profit from a real estate rebound

Posted August 9, 2012 at 6:44 pm

by Joe Light

There is reason for optimism. Not only are single-family home prices steadily climbing, but the Joint Center for Housing Studies at Harvard University in a June report said inventories of new, single-family homes in March were at the lowest level in 49 years.

The upshot: It would take fewer than six months to sell the current inventory, the traditional boundary between a strong and weak market, says Eric Belsky, managing director of the center.

To be sure, some promising signals during the recession turned out to be false alarms. In mid-2009, the 20-city S&P/Case-Shiller Home Price Index began a yearlong rise, only to fall again. Yale professor Robert Shiller, who called both the early 2000s stock-market crash and the recent real-estate bust, says he isn’t certain prices have bottomed.

But even if the absolute nadir hasn’t been reached, most economists say the odds are good that real estate will be stronger over the next few years than it has been in the past few.

The easiest way to make a broad bet on home builders is through an ETF, such as SPDR S&P Homebuilders (XHB: 22.43, 0.26, 1.17%) or iShares Dow Jones US Home Construction (ITB: 17.34, 0.31, 1.82%) . Given the market’s run-up, however, it might be smarter to stick with specific home-related stocks that have the most room for growth, says Bob Wetenhall, a senior analyst at RBC Capital Markets.

KB Homes (KBH: 10.74, 0.64, 6.34%), for example, has shown improving new-home orders that set it above other home builders, Mr. Wetenhall says. What’s more, after accounting for tax benefits that it accrued during the housing downturn, the company’s price/book ratio is 1, about 30% below that of other home builders, he says.

Lennar (LEN: 31.49, 0.78, 2.54%), which has a price/book ratio of 1.5 after adjusting for tax benefits, looks expensive next to its peers. But since it gets revenues not only from single-family homes but also multifamily housing and other kinds of real estate, it will be buttressed, Mr. Wetenhall says.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "How to Invest in a Real-Estate Rebound"]


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The Facebook Index is up 21% YTD

Posted July 22, 2012 at 7:22 pm

by Rebecca Lipman

The Facebook Index

The most significant role Facebook users play in providing value to businesses is word-of-mouth recommendations to friends. If you “like” a page, you are more likely to purchase that company’s products and twice as likely to recommend that page’s products to a friend.

That being said, it appears there is not much companies can do to attract “likes” to their page, but are better served encouraging those who already visit the page by maintaining an active online presence and rewarding loyal followers.

It is also uncertain if there is causation between liking a page and making purchases, or making purchases and then liking the page.

Business Section: Investment Ideas

Data is still being mined on the success of Facebook fan pages and advertising dollars, but preliminary studies are encouraging.

If, as an investor, you believe a larger presence on Facebook can truly translate into better business performance, then it would be prudent to keep an eye on user engagement.

With this in mind we list here the top nine companies with the most “likes” on Facebook. Who knows…

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Facebook Index : The Most Liked Firms on Facebook..."]


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