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paragonwealth
Paragon Wealth Management is a registered investment firm in Utah.
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Dear Friends, Every year Paragon Wealth Management sponsors the “Live Your Dream” scholarships for struggling, single moms and fundraises with generous sponsors for this worthy cause. This year we are hosting an exciting new fundraiser race, it’s called The Pioneer Day Raft and Run. For more information and/or to register go to www.raftandrun.com. To our knowledge, this is the first-ever raft and run race (if not nationwide for sure in Utah)! We would like you, your family and friends to come join us in this exciting event. Each participant will get a Custom Designed Race Medal, 5 Mile Rafting trip down Scenic Provo Canyon, 5K Run from Vivian Park to Canyon Glen Park, Premium Dry Fit Race T-Shirt, Bus Transportation from Canyon Glen to Race Start and the race will be electronically timed by RFID. Continue reading
Posted 7 days ago at Money Managers Live
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The first warning shot across the bow of the markets from the Fed came on Wednesday. Fed Chair Bernanke appeared before Congress on Wednesday and finally signaled that, depending on the data of course, the Fed could start slowing the rate of QE. The markets immediately reversed and on Thursday the Japanese market, which has been on an absolute tear, fell 7%. Whether or not this will lead to the long-awaited correction remains to be seen. The markets have been on a tear due in a large part to the fear investors have of missing out. That hasn’t gone away yet, but at the same time the pace of the advance was becoming unsustainable (Japan has been an extreme example) and a pause would do some good. Fundamentally the factors that have been pushing the market up remain in place and so any pullback could remain shallow. Economic data continues to show modest growth with hopes of increasing slowly as the year progresses. The economy is getting to the end of the deleveraging process and with the Fed’s tip of the hat, we have now officially entered the mode that if the economic figures get stronger the Fed will conversely reign in QE. Overall, that is a good thing and long overdue. As I have said for some time it is unfortunate that just as the economy starts to hit “escape velocity” the Fed will have to actually or potentially pull back on QE. That keeps economic growth in the slow growth mode. That’s the price of QE at the least and it’s a shame in my opinion. We would be better off if years ago we took more of the pain upfront rather than shackling ourselves with the pains of unraveling QE now. Continue reading
Posted May 24, 2013 at Money Managers Live
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On May 11, 2013, Paragon Wealth Management was awarded for the 2013 Best of State Award for Investment Advisory Services. The following pictures are from the Best of State Gala. Continue reading
Posted May 20, 2013 at Money Managers Live
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Simply amazing. Junk bond indexes and funds should now drop the “High Yield” description that they use in their names. With these bonds now yielding around 5% we have sold out of most of our positions in this area. At this level the returns are just not worth the risk. That doesn’t mean junk bonds will blow up any time soon but we would rather sell high and take what the market is giving us at this time. Junk yields at 5% are a direct consequence of the Fed’s Zero Interest Rate Policy as investors fight for anything with yield. It wasn’t too long ago when you could get 5% on a money market! To view the entire article please visit: barrons.com Here is an exerpt from the article: The 5% yield barrier has proved no match for this Federal Reserve-fueled junk-bond market, which last night reached yet another all-time record-low average yield-to-worst of 4.97%, according to the Barclays US High Yield Index. It marked a new level of market capitulation to central-bank forces as it’s the first time the index has dipped below 5% in its 30-year history (before January the market had never even fallen below 6%). The average price of 107.31 cents on the dollar also marks a record high. The other widely followed market index, the Bank of America Merrill Lynch High Yield Master II Index, closed last night within a whisker of 5%, at 5.005%, with the average dollar price closing above the 107-cent mark for the first time ever at 107.20. Continue reading
Posted May 10, 2013 at Money Managers Live
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Paragon Wealth Management, a national leader in the investment and wealth management field is proud to have been awarded the 2013 Best of State Award for investment advisory services. This is the fourth year that Paragon has been awarded this prestigious award, that recognizes their commitment to financial excellence and the community they provide for in Utah. Paragon also received the award in 2008, 2011, 2012, and now 2013. “We are excited to once again win Best of State,” says David Young of Paragon Wealth Management. “We never get too comfortable being the best, we are just always working hard to provide the best service for our clients.” Continue reading
Posted May 2, 2013 at Money Managers Live
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With the market hitting new highs, this is another question that is regularly asked. When you look at the market over the long term it provides a different perspective. Currently, the broad stock market is back to where it was almost 13 years ago. In August of 2000 the S&P 500 hit a level of 1517. Then after seven years of ups and downs, in October 2007, the S&P 500 finally hit 1549. Then five and a half years after that, the S&P 500 hit 1514 again. The bottom line is that it has taken almost 13 years for the S&P 500 to get back to the level it was at in August 2000! Stock prices are driven by their earnings. Earnings have increased over 300% since 2000 while stock prices haven't moved much. In my opinion, it appears that stocks are still a good value even though we are hitting new highs. Continue reading
Posted Apr 17, 2013 at Money Managers Live
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There was an interesting report yesterday published by NDR (Ned Davis Research) highlighting the current financial position of households through 2012. The data shows how households have continued to recover from the financial crisis and in many cases are now in the best position in over a decade. Households have been paying off debt aided by low interest rates, rebounding asset prices and slowly improving incomes. The data tracked by NDR covers various household debt service and financial obligations ratios. For example, one ratio compares household credit market debt as a percentage of total household financial assets. This ratio is currently at 23.6% and is the lowest since the first quarter of 2002. By comparison, at the heart of the financial crisis in early 2009 the ratio was 32.6%. A financial obligations ratio that includes vehicle leases, rent, insurance and property taxes is the lowest since 1981. The debt service ratio which calculates minimum debt service payments on mortgage debt and consumer credit as a percentage of disposable income was at a record low (data goes back to 1980). This last statistic is no doubt influenced by today’s extremely low interest rates and would not look as favorable if interest rates were higher. So the private sector has been doing the “right” thing by deleveraging which in the short term reduces demand but in the long-term increases demand. This deleveraging process by the private sector is one of the reasons why the economic recovery has been less than robust. Continue reading
Posted Mar 28, 2013 at Money Managers Live
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Last week I received a call from a very concerned client. He was talking to a friend who told him that the stock market was about to crash. He had heard it from an expert on television and wanted to know if I had heard that the crash was coming! Also, he wondered, "What he should do with his account?" I explained that no one knows with absolute certainty where the market is going next. The stock market is essentially a giant auction. Everyone has an opinion on whether or not the values are fair. Some think they are too low, some too high and some just right. Just because the market is hitting all time highs that doesn't mean that it has to go down. Regardless of where it is at in the cycle, it will do one of three things. It might go up more, may move sideways or could go down. The only thing that is guaranteed is that one of those three options will occur. Continue reading
Posted Mar 22, 2013 at Money Managers Live
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Could gold, the traditional and popular hedge against inflation, actually perform poorly during an inflationary period thereby frustrating its use as a hedge? For years now many have been worried that due to unprecedented central bank easing and huge government deficits we should be experiencing high inflation. Instead, with the CPI at 1.6% inflation is benign at best. We can “thank” the financial crisis for that. The price of gold seemed to confirm inflation worries by having a stellar decade long run from $300/ounce in 2001 to over $1,800 by August of 2011. Since then, the price of gold has stalled. Perhaps gold moved up less because of inflation worries and more because it was a recipient of the money issuing forth from the central bankers? Now in anticipation that the easy money policies could start to end within a year or two could this be the reason that gold prices are stalling out? Continue reading
Posted Mar 14, 2013 at Money Managers Live
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I recently returned from a trip to the Dominican Republic. The trip was for a group of 30 entrepreneurs and their wives who were graduates of BYU. The trip was great. It was a chance to get out of the cold. It was good to network with an upbeat, successful group of people. The days were nice, sitting on the beach, listening to the waves and enjoying the sun. In retrospect, it reminds me of the stock market the past few months. There has been very mild back and forth movement within a general uptrend. All in all, it has been a good time to be invested. Continue reading
Posted Mar 7, 2013 at Money Managers Live
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This is an interesting article for anyone interested in buying or selling a home in the current environment. Many regions in the country are now experiencing a lack of supply which has given the sellers the upper hand. It’s certainly a different market than the last few years to say the least. To view the article, please visit bloomberg.com Here is an excerpt of the article: It all seems so quaint now: the casual walk-throughs, the drives to check out the neighborhood, the luxury of sleeping on the largest financial decision you'll likely ever make. Trying to buy a home now feels more like being thrust into the trading pit at the Chicago Mercantile Exchange -- the frenzied bidding, the need for lightning-fast decisions, the packs of sharp-elbowed competitors. In one fraught situation, a home near Union Station in Washington, D.C., drew 168 offers in December and sold for almost twice the asking price. In the tonier neighborhoods of Los Angeles, 20 bids per house is not uncommon, according to real estate agent David Kean. And the speed of deals can be intense. "In the middle of a snowstorm we have seen houses sell in one day," says Sam Schneiderman, owner/broker at the Greater Boston Home Team agency. "At open houses on million-dollar homes you are literally bumping into people, it's that crowded." Continue reading
Posted Mar 1, 2013 at Money Managers Live
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Bloomberg reported today that the biggest U.S. banks are lending the smallest portion of their deposits in five years. The banks have been flooded with cash since the financial crisis of 2008 as people have sought to conserve cash and not borrow. Due to tighter lending standards, less credit worthy borrowers, increased regulation and capital requirements loans have not been exactly flying out the door. This doesn’t mean banks haven’t been lending but more that they are a lot more cautious and that demand isn’t what it once was. The economy, while growing, hasn’t felt strong enough for robust lending to reignite…yet. Could this change? The economic numbers, while not great, have been getting better and banks have significantly cleaned up their balance sheets and raised capital. The potential is there. While lending will probably not return to the levels of the past (at least for a while), it wouldn’t take much releasing of the spigots to keep the economy moving along and get better. It’s like a virtuous cycle where once confidence and conditions improve it creates a sort of self-reinforcing momentum. Dare I say we could be entering a sort of boom or “normal” period? I know that sounds like heresy to so many and contrary to the gloom scenarios that having ruled the day since 2008 but I agree with James Paulsen of Wells Capital Management who says that the economy is now “gearing”. Continue reading
Posted Feb 20, 2013 at Money Managers Live
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Written by Dave Young, President & Founder of Paragon Wealth Management For some reason, it has always been easier to lose money than it is to make it and keep it. Managing your own investments can be done successfully, but it is not easy. First, it requires a time commitment to research and track your investments. Second, it requires discipline to stick with your strategy through challenging times. Third, and most difficult, it requires you to remove emotion from your investment process. Studies have shown that most investors would be better off with the help of a financial adviser. Unfortunately, finding the “right” adviser is difficult. Most investors hire someone they “trust”. However, “trust” is very intangible and difficult to quantify. Also, the size of the firm or familiarity of the brand name does not indicate the quality of the advice provided. To make sure you don’t get stuck with a salesperson when you are really looking for an adviser, make sure you ask these four questions: Continue reading
Posted Feb 14, 2013 at Money Managers Live
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Overall, we currently see a positive year in 2013 for equity markets. The negative effects of higher taxes and somewhat lower government spending will be offset by improved corporate spending and economic growth as the year goes on. Companies and consumers have been cautious now for years and that could finally reverse in 2013 resulting in better economic growth. This could help the market’s current low to medium valuation multiple to expand thereby benefitting stocks overall for the year. The Fed should stay in continued easing mode as they try to boost inflation. Government policy wants you to spend not save. We remain cautious on bonds and are still avoiding Treasuries and long-dated maturities. The risk for reward is still very unattractive in this area. There will be the usual ups and downs throughout the year and the now seemingly ever present uncertainty caused by government action and policy will continue to be over the market’s shoulder. Starting to Look Abroad It’s has been awhile since we have had a significant position in foreign markets. We have been waiting patiently since the financial crisis for the emerging markets to reassert themselves and it looks like the time has finally arrived – or at least started to. The reason this excites us is because the inherent growth story associated with emerging market countries is now coupled with attractive valuations. The past few years have seen the U.S. market outperform on a relative basis. In fact, the S&P 500 has returned about 18 percent for the last two years while the MSCI Emerging Markets Index was down over 3 percent. Continue reading
Posted Jan 24, 2013 at Money Managers Live
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2012 continued the volatility that’s characterized markets since the global financial crisis, which will be marking its fifth anniversary in September. This year's market moves were driven by three primary issues, Europe, the Middle East, and U.S. Politics. We had a back and forth flow of good and bad news all year out of Europe. Positive indications for Europe’s economy in the first quarter led to the strongest start for markets in recent memory. These gains were promptly given back as concerns rose in the second quarter. Markets then rallied in the second half of the year when the European Central Bank announced that it would provide liquidity to governments and financial institutions – to the point that for 2012 as a whole, Europe’s stock market actually outperformed the U.S. Middle East problems added to the mix this year. This time it was Syria, Libya, Egypt, Israel and Iran that kept things stirred up. Problems there always add an element of fear to investors in the U.S. Continue reading
Posted Jan 17, 2013 at Money Managers Live
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Growth at a reasonable price, or GARP as it’s known in the investment world, is practically the holy grail of investing. Whether you’re a value or growth disciple (or any other type of investor for that matter) in the end everyone wants the same thing – their investment to go up. Short sellers excluded of course. GARP is theoretically the best of both the value and growth worlds. Who wouldn’t want a stock that is cheap and has good growth? The risk with value investing is that the stock is cheap not because it is undervalued but because its fundamentals are deteriorating and offer little prospect of reversing. It’s the classic value trap that many fall for. The risk on the growth side is that stocks with higher growth rates tend to be expensive and priced for perfection. Any disappointment can bring the stock down in a hurry. Continue reading
Posted Jan 11, 2013 at Money Managers Live
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The financial world was about to go over the fiscal cliff. Our world was ending as we know it. But then, our trusty politicians came back to save us. At the very last minute, they came to an agreement. President Obama even came back from his vacation in Hawaii to be there. Everyone cheered. The stock market jumped 300 points the next day. We followed our models and our portfolios performed well through all of the stress and uncertainty. So what really happened? Not much. Payroll taxes were put back to what they were before the payroll tax holiday - which will cost average wage earners somewhere between $500 and $2000 per year, depending on your income. Continue reading
Posted Jan 4, 2013 at Money Managers Live
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Written by Nathan White, Chief Investment Officer of Paragon Wealth Management I read in the Wall street Journal today that the Tax Foundation notes that almost 70% of Americans take out more from the tax system than they put into it. Seventy percent! No wonder the debate about the fiscal cliff is primarily focused on taxes. It’s a great strategy to distract people’s attention away from the real problem – spending. Is it inevitable that as democracies age their citizens become accustomed to the resulting prosperity and take it ever more for granted by voting themselves ever more entitlements? Entitlements are always so very well intentioned and therefore difficult to argue against in a moral sense. After all, who wants to deny assistance to Sandy/Katrina victims, single parents, the homeless, those who can’t afford college (isn’t that everyone now?), retirees, “working families”, farmers, the unemployed – the list is unfortunately now endless. The problem is that eventually the entitlements and spending become unsustainable. So how do we break this vicious cycle? The problem is offering entitlements in the first place. No one ever wants their entitlements cut or taxes raised per se (despite what Warren Buffett says). We usually want someone else’s benefit to be cut or taxes raised. The mega rich often support higher taxes on themselves because it won’t materially change their lifestyle but it does create barriers to entry to more people becoming like them. It entrenches their place at the top. But I digress, once begun entitlements are hard to end. Think about it on a personal level, if you get a deduction for a mortgage or tax credit for children do you want those ended or reduced? No, because it means your refund will go down or tax payment will go up – either way you’re out of more money. In fact, if offered an entitlement it behooves you to take it because if not than you will be worse off economically on both a relative and absolute level. You don’t have the option for either a mortgage deduction or a lower rate. Continue reading
Posted Dec 20, 2012 at Money Managers Live
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Written by Dave Young, President of Paragon Wealth Management So here we are again. Another saga of politicians making promises, trading accusations and accomplishing nothing of substance. It's been said that the definition of insanity is doing the same thing over and over and expecting a different result. So what does that say about our "leaders" in Washington? It's obvious we have a 16 Trillion and growing problem. One side believes that the solution is to keep increasing taxes...as long as we only do it to the "rich". The other side believes that the only solution is to cut government spending. This impasse brings us to what the media loves to call the "Fiscal Cliff". What makes the Fiscal Cliff such a great title is that it sounds really scary. Fear increases attention. Increased attention translates into more viewership. More viewership translates into more revenue for the media outlets. As a result, the media loves scary things, real or imagined. In reality, if our politicians cannot agree on a solution then that will create a problem. That problem will be more of a fiscal slide over time rather than the fiscal cliff that has been portrayed. If the slide occurs it will likely take months to play out before it has any direct effect on our economy. Continue reading
Posted Dec 14, 2012 at Money Managers Live
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Written by Nathan White, Chief Investment Officer of Paragon Wealth Management This is an absolutely great piece in the op-ed section of the Wall Street Journal last Friday about the hypocrisy of those who support higher taxes and claim that tax rates don’t affect business decisions! I urge all to read! To view the entire article please visit: wsj.com Here is an excerpt from the article: When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte. So what a surprise this week to see that Mr. Sinegal and the rest of the Costco board voted to give themselves a special dividend to avoid Mr. Obama's looming tax increase. Is this what the President means by "tax fairness"? Continue reading
Posted Dec 7, 2012 at Money Managers Live
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Written By Nate White, Chief Investment Officer of Paragon Wealth Management With all the talk of the fiscal cliff and the possible negative ramifications dominating the headlines I thought it might be nice to hear something different. The following is a pretty good article outlining some optimistic data regarding the economy. The author is a self-described “pessimist” and so I believe it is a balanced look at current trends in the economy that we have been monitoring. These trends show that much of the damage done by the ’08-’09 recession have been repaired and are starting to reverse. To view the entire article please visit: seekingalpha.com Here is an excerpt from the article: Let me start by making a confession: I tend to be a negative person. I don't know why, but I expect and prepare for the worst. Few people know this. To the outside world I'm an average optimist, but to those I allow into the inner workings of my brain I'm a pessimist and a cynic. It's not that I want to be a negative person. I've just seen enough to understand that eternal optimists are often disappointed. I'd rather prepare for the worst and be pleasantly surprised when things turn out better. But often they don't. Continue reading
Posted Nov 29, 2012 at Money Managers Live
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After a seemingly endless campaign, we now know who will be in charge for the next four years. I believe that keeping the money you earn and investing it successfully will be more difficult than ever. In the 26 years that I have managed money I have never seen government affect the free market in the negative way that it does now. Unfortunately, every investment decision we make is affected by politics, government policies and regulations. Going forward, what does this mean for investors? The first problem is the uncontrolled spending in Washington that shows no signs of slowing. Obama ran up the national debt from 9.6 Trillion to over 16 Trillion dollars, a 66% increase, in just four years. His rate of spending is incomprehensible and dangerous. Continue reading
Posted Nov 15, 2012 at Money Managers Live
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As a father of five this “famous” phrase from Buzz Lightyear of Toy Story fame is well known around our house. I’m afraid this phrase is hanging from banners at Ben Bernanke’s office and other areas of the Federal Reserve in regards to the infamous program now known as Quantitative Easing or QE. After seeing the market tank both times after ending QE1 and QE2 the Fed wised up this time and decided to leave the newest QE round as “open-ended”. The Fed balance sheet stands at nearly $3 trillion and growing. The problem with these programs, as I have stated regularly, is that the benefits are not worth the costs in the long-run. Much has been said and written about the potential inflationary ramifications of the Fed’s actions but there are other effects to consider as well. First, attempting to artificially keep assets prices high does not fix an economy and can actually cause harm by distorting the all-important price signals needed to aid in the allocation of resources. I agree with Jim Grant, editor of Grants’ Interest Rate Observer, who remarked that today’s capital markets now resemble of house of mirrors. For example, the market is currently trading at about 14.8 times earnings which historically is on the cheap side and relative to interest rates even cheaper still. However, interest rates are a significant factor in determining the level of valuations and so the question becomes where would valuations actually be if interest rates were not being kept at these “artificial” low levels? This makes it difficult to confidently make forecasts and economic decisions resulting in uncertainty which tempers investment and the economy. The low rate environment is confusing for investors and damaging to savers. It effectively forces people into investments that they might not otherwise own and that possess greater risk than is appropriate. Continue reading
Posted Nov 8, 2012 at Money Managers Live
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The number one question I am frequently asked is, "How do I think the presidential election will affect the market?" In prior elections, I have always had a preference who won, but my preference did not affect our investment strategy. This election is different. I believe the outcome of the election will affect our management strategies, possibly significantly. I will apologize in advance to those who do not share my political views. I do not mean to offend you. However, my opinions are based on my experience managing portfolios for the past 26 years rather than pure political ideology. I look at this election from an investment perspective and the potential impact it will have on your portfolio. Historically, in an election year, the market is usually weak and trending down during August and September. Then, during October it turns up. November and December are usually choppy but have an upward bias. If a Republican or the incumbent wins, the market is usually stronger going into the election. Historically, over the course of the year, the market ends the year about eight percent higher if a Republican wins rather than a Democrat. From an investment standpoint it would be nice to know how this election is going to play out. That is the trillion dollar question. Most polls show the race very close with Obama having the edge in some swing states. On the other hand, political pundits make the case that the polls aren't accurate, just like they weren't accurate when they showed Carter six points ahead of Reagan just days before Reagan won that election. This election is very close. It is unlikely to be clear until after the election. It is a tossup on who will control the Senate. We do know that Republicans will continue to control the House of Representatives. Continue reading
Posted Nov 5, 2012 at Money Managers Live
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How will the markets react to the election? Do you buy if Romney wins and sell if Obama is re-elected or do the opposite? Most people’s answer to that questions depends upon their particular political persuasion. However, if you take off the political glasses what does the choice look like? There have been a lot of statistics thrown around lately regarding the impact on the markets of who wins the white house. In today’s WSJ Ahead of the Tape column by Spencer Jakab, a study by Barclays starting in 1929 shows that the market has risen 10.8% annually under Democrats and 2.7% under Republicans. According to that data we should all want the President to win. However, “there are lies, damned lies, and statistics” as Mark Twain said. Economic policies enacted by governments can take years to implement and the consequences (both good and bad) can be felt years down the road. The growing debt burden as the prime example. Sometimes Presidents preside during booms and their followers reap the aftermath. Some Presidents take office during bear markets and the markets have nowhere to go but up and some encounter the exact opposite. Politicians of course will always take the credit for the good and assign blame for the bad. Trying to separate and assign the real cause and effect is a battle that constantly being waged. Continue reading
Posted Nov 1, 2012 at Money Managers Live