Financial Sense Newshour

Jim is pleased to welcome Jeffrey Saut, Managing Director of Research at Raymond James Financial. Jeff mentions that many investment managers and other professionals are feeling “performance pressures” from having missed the recent rally, as well as others that have underperformed by emphasizing international equities over US-focused equities. Jeff does not think the dividend play of recent years is extended, as payout ratios average only 32% of earnings on the S&P index, compared with historical norms of 50% payout ratios.

Jim welcomes Ronald Stoeferle, publisher of the respected annual report, “In Gold We Trust”, and a gold fund manager in Vienna, Austria. Ronald tells Jim that we were close to a run on the bullion banks during the recent chaotic drop in gold. He also sees a growing movement to remove gold from the financial system, as paper gold is creating too much counterparty risk, as witnessed by the Dutch bank ABN Amro’s recent gold default. Ronald sees the divergence between paper gold plunging in price and record demand for physical gold as a loss of confidence in the banking system by the public. The next issue of “In Gold We Trust” will be published in June.

This week on the Lifetime Income Series, Jim and Cathlyn discuss the very important topic of compound interest, once famously called “the eighth wonder of the world” by Albert Einstein. Jim and Cathlyn offer examples to explain the concept and why it is so important to start early, invest wisely and stay disciplined. The special guest this week is Veronica Dagher, a columnist at Dow Jones Company and The Wall Street Journal. Veronica discusses the mistakes people make with their 401-k’s and how to avoid them.

In the first Big Picture topic this week, Jim looks at the next stock market rotation. He believes it will focus on the energy, technology and materials sectors, all of which are currently unloved, unappreciated and undervalued. The next topic will be the monthly conversation, On The Record, where John asks Jim questions of timely and topical importance. Some of the topics covered include why Jim is optimistic on stocks, why you don’t want to store your bullion at a Wall Street bank, what distinguishes Jim’s practice from others in the industry, and why QE will end badly.