QnA Friday: Checking on Markets, Bonds, Robert Kiyosaki, Open Opportunity IRAs…

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Happy Friday! Today is an especially happy Friday for me because it is the beginning of my birthday weekend…tomorrow is Birthday Eve, and then Sunday is my birthday…yay!

Even though I should probably change my AKA from Kung Fu “Girl” to Kung Fu “Matron” or Kung Fu “Ancient One”, I am always happy when my birthday comes around because as my favorite friend of my Grandpa’s used to say, “It sure beats the alternative!”.

So I’m looking forward to the weekend, and I hope you have a great one!

I did set up an account on Wall Street Survivor (my name is “kungfugirl”) so if you are interested in joining you can hop over there and create an account; it’s free. I haven’t set up a contest or done much more with it yet however because A) I am really busy and B) I’m not that impressed so far. They do have an Investing 101 class but it’s $79…and I checked it out and you can find all of that info out for free (and in fact probably already know it…they start with what is a bank, what is a CD, etc.). I will look into it further though and keep you posted!

In the meantime, onto this week’s questions…

Willis asks,

That was great KFG! I’m curious to one day find out the details on how you go about checking markets as judging by your schedule you only seem to spend about 15-30mins each time. Is it like a quick glance?

Hi Willis! Great question, and yes, it’s a fairly quick glance, but it varies from day to day and with what I have going on in my life and investments at the time.

(The great thing about not being a day-trader is that I don’t have to check the markets very often at all, which would drive me crazy!)

Let me walk you through the ways in which I check the markets and then more importantly, what I care about and look for when I’m checking.

How:
For really quick checks I have a Zero Hedge twitter feed that I read on my phone whenever I have a few minutes (waiting for my girls or an appointment, etc.) and also the CNBC app that has real-time market access and “breaking news”, so that’s one way I stay up-to-date (my iPhone).

(Warning, though…this can easily turn into a huge time-suck if you let it, and I have a strict rule that I never check it when I am with someone, especially my kids, only when I am truly “waiting” for something like an appointment, etc.).

I also subscribe to the Financial Times and read several other financial news publications online (Bloomberg, WSJ, Economist, etc.).

I am also a self-proclaimed newsletter junkie, which is worthy of its own post (“Confessions of a Newsletter Junkie”, perhaps… ). But I do subscribe to probably 10+ industry newsletters, and if you break it down to individual products that number is exponentially higher (for example I’m an “Alliance” member of Stansberry’s stuff, so that includes all of their pubs, and I think at last count there were at least 12, maybe more!).

I love the multiple perspectives that I receive from reading all of the individual newsletters, so this is another way in which I get my daily dose of financial “market” info.

In fact, over the years I have relied more and more on this independent research than on the standard free “news” channels (with the exception of Zero Hedge, which is free, but ZH can be a little difficult to decipher if you are not already pretty financially savvy).

However, I didn’t start out that way (these are all very expensive reports…usually several hundred dollars per year each, if not thousands). In the beginning, I just read whatever I could for free relating to what I was interested in (Ed Steer’s Gold & Silver Daily, for example), and then as my investments grew I invested more in my education, purchasing newsletters, attending conferences, etc.

What do I check for?

I keep abreast of the spot prices of gold, silver, oil, and a few other commodities on a daily basis (but I don’t freak out over it, just sort of keep my finger on the pulse of what’s going on), the bond markets, and the major world stock markets.

It’s fascinating to me, but most people just check the DOW and maybe the S&P 500 because that is what’s “reported” on the nightly news and CNBC. (CNBC has just started reporting on European bonds in their top-ticker).

However, that is an incredibly skewed view of “what’s happening in the world”…there are only 30 US stocks in the DOW (and yes, I realize they are 30 of the biggest companies in the world, but still, the world economy is made up of much more than that!).

I list the bond markets in my sentence above before the stock markets because right now they are telling an important story—the story of what’s happening in Europe (and the U.S.) and how (and when…) that will affect the U.S. and world stock markets. It is almost cause and effect, and yet so many people spend all of their time focused on the “effect” (the stock markets) but it is much more profitable to focus on the “cause” (the bond markets).

That’s an oversimplification, but honestly, not by much. True savvy “smart money” investors are constantly watching the bond markets, not the stock markets (they watch those, too of course, but only after having analyzed the bond markets and understanding what they are saying about the stock markets.)

So, I check on the prices of physical spot gold and silver, because

• I own quite a bit of those and so of course have a vested interest, and
• It tells me from a macro-trend perspective what is happening with world currencies and what the “groupthink” is at any given point in time (e.g. is the Fed continuing to print money and devalue our currency?)

And ditto with oil and other energies (I own various stocks here, too), and a few important commodities (this is the stuff we use and eat every day…the old-fashioned items we bartered for like wheat, rice, soy, cattle, etc.!). This is global trade, and essential to understanding what the various politicians might do.

I look at the bond markets, because the numbers tell me in a glance what the CNBC anchor will spend thirty minutes dancing around….for example, “What is happening in Greece?”. You can turn on CNBC for an hour and hear all kinds of rumors (“news”) on the latest talks, discussions, meetings, possible agreements, “possible” solutions, etc….. OR, you can look at this chart:

This is a year-long chart of the 10-year Greek bond, and what it is telling me at a glance is that “the problems have not been solved yet in Greece, and in fact are getting worse by the day, although it has leveled off somewhat in the past few weeks”.

(The “danger” zone for 10-year sovereign bonds is around the 7% mark…if they go over 7% that spells bad news for the borrowing country issuing those bonds. Greece is toast…it’s been well over 10% for a year and is now over 34%.)

I linked the chart above to the actual Bloomberg page so you can click through and look at other countries to your heart’s content…it really is interesting to see it visually (at least for me!).

Finally, I also check the stock markets but not too often. If I am using options I definitely check on options expiration week(!), and at the overall market I look at the various indexes (DOW, S&P 500, NASDAQ, etc.) and particularly at the volatility and sentiment.  As I’m active in the precious metals market I check the HUI, GDX, GDX-J, and the Toronto market, and I check on my individual stocks.

This is such a long-winded answer to your straightforward question, so I apologize! But yes, basically, other than reading my favorite newsletters (and I don’t do that daily…most come out once/month or twice/month and they are somewhat staggered), I really do only “glance” at the markets a few times per day, and sometimes only once.

I hope this makes sense…let me know if you have more questions, and I can write a further post on this!

Daniel asks,

Hello,
This is off the subject a little. I see that you have read the Rich Dad, Poor Dad books. Have you ever gone to any of his seminars? I went to a basic stock seminar and all it was, was a slick sells pitch for an advanced seminar that costs. If I go to that one will it be another high pressure sales pitch for even more costly so called advanced training? I’m getting a bad feeling about this company. Thanks.
Daniel

Hi Daniel! Yes, I have read many, many books by Robert Kiyosaki, own his CashFlow game, and consider him a mentor, although I’ve never spoken with him personally. He’s recently received some flack on his public speaking (apparently people don’t love his colorful language…my own isn’t terribly great, though, so I really can’t judge!).

Setting Robert Kiyosaki himself aside for the moment, as far as general “basic” stock seminars go, most of those (free or low-cost) are what they call “sales funnel entry points”. This is true in all industries, including investing. That doesn’t necessarily mean they are all bad—the good ones should still teach you and you should feel like you definitely learned something valuable. Then, if you feel like it was time well-spent or if you got your money’s worth (if there was a small fee), and you are interested in learning more, then they should offer you some sort of more in-depth product / training / session.

But this is where your trusty gut comes into play. Some of these seminars are nothing but sleaze-sleaze-sleaze. They are all hype and promise and zero education and their whole goal is to separate you from your money as quickly as possible. Obviously these you should stay away from with a ten-foot-pole!

And if Robert Kiyosaki’s stock seminar gave you that creepy feeling, then as much as it pains me to say this, it might be best to keep looking (and I actually bet Robert would agree with me– he doesn’t teach them himself and I’m sure amidst all of the seminars he’s got going, a few bad apples probably slip into the pot).

There are a plethora of stock market courses out there to choose from, and Robert Kiyosaki himself will be the first to tell you that he is not a “stock guy”—he is a real estate guy. You will not be learning from him personally…that’s not necessarily bad, though, but is something to keep in mind if it’s important to you.

He also has created a coaching program, which I have heard mixed reviews on, but I don’t have personal experience with it so I hesitate to comment– all I’ve heard are rumors (some great, some not so much, but it’s hard to verify the authenticity on the Internet and unfortunately I can’t speak from personal experience.) I do know that the programs are quite expensive (but they also provide personal, direct, one-on-one coaching).

I can’t give you much personal insight on the specific seminar you are referring to, unfortunately, because I never attended one of Robert’s live events other than a Learning Annex presentation some ten years ago. While it was great– I always love seeing Robert speak live–if you had read his books it wasn’t “new” information, so if you were expecting something new you would have been disappointed. (I wasn’t…I’ve learned in life you typically get what you pay for, and I think the Learning Annex talk was either free or less than $40, and to me it was worth it just to see him speak live). I cannot remember if there was an upsell to another event, but I wouldn’t be surprised…that is how most marketing, education, and coaching services work.

Again that’s not necessarily bad…it really depends on the individual and/or company, their integrity, and whether you are getting the value out of their programs. From my experience Robert Kiyosaki has always acted with integrity, but then again his organization is now HUGE and it is probably impossible for him to keep his finger directly on the pulse of each little corner of it. I do like Robert’s online “insider’s” club and often buy the $9.95 recordings of his live events (his “Board Room”, etc.).

At the end of the day, trust your gut with *any* seminar or service…it will serve you well! If you get that creepy feeling, or feel like you are not learning enough for the money you are forking over, RUN, don’t walk for the nearest exit, whether with Robert Kiyosaki or anyone!

Oh and this from Bruce Lee which is just sound advice whenever you are learning:

“Adapt what is useful, reject what is useless, and add what is specifically your own.”
― Bruce Lee

Next, Mike asks,

Wow, I truly didn’t realize how much 401k’s are robbing us blind of the simple fees do over time!
So, did you pay the full “fee” to open an opportunity IRA (Jeff Scheider I believe I spoke with) or were you able to do it yourself? I’m not opposed to paying $3g’s or so….just need to have a plan (and learn quite a bit) to make sure it’s worth at least that much! (a little different when results are 100% up to yourself)
Getting “free” company matching of 100% (up to 6%) seemed tough to beat….hmm, now i’m not so sure.
have a great week!

Hi Mike! Thanks for your great question! No, I didn’t pay a fee to open up an “Open Opportunity IRA”, but a very good friend of mine and fellow La Estancia de Cafayate owner has done so and I can maybe talk him into writing a guest post for me on that if there is interest! He opened up an Open Opportunity LLC, though not with the person you mention, and it works great for him—he loves it. Let me talk with him and see if he would be willing to share that process with us here on Kung Fu Finance (he’s a reader, too!).

We went the self-directed route before knowing about the open opportunity option many years ago. Kung Fu Guy opened up a self-directed IRA for no fee, but there are drawbacks, too…our money is not nearly as liquid there as it would be through an Open Opportunity IRA where you can just write a check, so we’re considering going the open opportunity route, too.

Great question, and good luck with your decision!

Thanks so much for your great questions everyone! I know there were more but will save them for future posts as this is already 2000 words. Have a great weekend…

To your financial success,

—Kung Fu Girl

 

Tagged as: Bruce Lee, gold, greek bonds, open opportunity ira, Robert Kiyosaki, silver