Money Matters Radio Show #825
November 12, 2006
Mike began with a word about
energy trusts which have been among the best investments for my clients
in the past several years. Energy trusts are stocks that give you
ownership of some of the mineral rights for whatever comes out of the
ground in a specific location. For example, the BP Prudhoe Bay Trust
which I have mentioned on this show many times, gives a shareholder
interest in minerals in the Prudhoe Bay oil field located on the North
Slope in
Alaska. The royalty
interests entitle the trust to a royalty on just over 16% of the first
90,000 barrels of the average actual daily net production of oil and
natural gas condensate per quarter.
You don’t own
the land, the drilling equipment nor do you have any ownership of the
company BP. Currently you are receiving a dividend from this trust of
just over 9%.
What has now
caused concern in this area is not only the dropping price of oil, but a
threat by Canada to issue a tax on the popular energy trusts located in
that country. My firm has issued a statement to clients about this
development and you can read it by clicking here.
http://www.yourwealth.com/docs/Energy_Trust_News.pdf
Reminders of
important events coming up:
Santa
Breakfast at
Stone Mountain
Park December 16th.
Get your tickets now for this fabulous event. Sales of tickets benefits FODAC – Friends of Disabled Adults and Children.
A unique
Christmas music collection from Bob Haworth – formerly with the Kingston
Trio – being offered exclusively on line through my web site
www.moneybulletin.com
Looking for a
great Christmas gift that will help someone financially?
Click here to look for my
list of the best financial books at including my link for you to get Clark Howard’s books autographed by
Clark himself. Order early – don’t wait until it’s too late. Look on my
favorite books also for books written specifically for young children.
Also – how is
this for a unique financial gift? Buy one share – a real share of
stock – framed and ready for Christmas giving.
Click here for
the line to the One Share Store.
On other
issues Mike talked about the following:
I-series
Savings Bonds – new yield is 4.52%. In Mike’s view these are like
having a tax-deferred money market account – although obviously not as
liquid. For an ultra conservative safe and tax sheltered savings
account, Mike continues to like these. His after-tax analysis gives the
current edge to one year CD’s by 0.7% - hardly a reason to sell your old
savings bonds and hardly a reason not to have a little money in these
either. In contrast, Clark Howard says
forget savings bonds and get higher yield CD's. On this issue, Mike
says Clark and he have agreed to disagree. However, if you are seeking
yields as high as 6.1% on CD's, Mike has found some deals through links
he provides under the investing section at www.moneybulletin.com
401-k/403-b –
Should you increase your contributions for next year?
Mike says not if you are eligible for a Roth IRA. Contribute to the
matching on your plan, but after that, put money into a Roth so you can
have tax-free income when you retire.
Did you buy
the hot fund for this year? Mike pointed out the utter futility of
trying to pick a fund that beats the index by looking at the top names
for this year so far. The usual winner – Legg Mason Value Trust is 10%
below the 500 index at this point. The winner in large cap stocks is
something called Manning and Napier Tax Managed A fund. Did anyone pick
this fund at the start of the year? If so, Mike hasn’t heard a peep.
And face it – you didn’t call it either and if you own it – you are – be
honest now – just lucky.
Indexes this
year – up 12% for the 500, total market and total international market
indexes. Mike is more than amused at the bears from earlier this
year. Take for example just one – we will not embarrass this poor soul
by mentioning his name here, who issued the following “bulletin” to
investors in August of this year. He said “I
still believe
U.S.
stock prices are headed much lower into the autumn and ...
our forecast of a secondary secular bear market low target of Dow
8500.” Wow – was he ever wrong!!!!!!!!
