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The Best of What They Said and I Read Week Ending 5/26/2019

Short excerpts from articles I found interesting.  I may not agree with the author and the following material is not intended as investment advice

U.S. Global Investors - Investor Alert – May 24, 2019 – Frank Holmes 

  • “…The major market indices finished down this week. The Dow Jones Industrial Average lost 0.69 percent. The S&P 500 Stock Index fell 1.17 percent, while the Nasdaq Composite fell 2.29 percent. The Russell 2000 small capitalization index lost 1.41 percent this week…The 10-year Treasury bond yield fell 7 basis points to 2.32 percent.”

AAII Journal Update – May 23, 2019 – Are Any of the Nifty 50 Stocks Still Nifty? – Charles Rotblut 

  • “Back in the early 1970s, there was a group of stocks that institutional investors…flocked to. Known as the “Nifty 50,” they were stocks viewed as being the preeminent stocks to own. University of Pennsylvania professor Jeremy Siegel described them as often being called “one-decision stocks: buy and never sell.”These stocks had several traits in common during the early 1970s. They were growing both earnings and dividends. Their market capitalizations were large. Their prospects were assumed to be bright. As such, investors ignored their valuations and happily paid significant premiums to own them. As those of you familiar with market history already know, the excitement about these stocks ended when their share prices plummeted during the 1973–1974 bear market.” 

  • “Siegel wrote about the Nifty 50 stocks in the October 1998 AAII Journal. Of the 50 companies listed by Siegel, 29 are still publicly traded while 21 are not…Most of the former Nifty 50 companies that are no longer publicly traded have been acquired, including Anheuser-Busch, Black & Decker Corp., Gillette and Lubrizol Corp. Emery Worldwide and Polaroid are no longer in business (though Polaroid’s name lives on). S. S. Kresge Corp. (aka Kmart Corp.) is part of beleaguered Sears Holding Corp. and the combined company remains on thin ice.”

  • “…Among the Nifty 50 members to still be publicly traded, 10 are current Dow Jones industrial average components. They are 3M, American Express, IBM, Johnson & Johnson, McDonald’s, Merck, Pfizer, Procter & Gamble, Coca-Cola and Walt Disney. In total, 22 of the 29 surviving Nifty 50 companies are members of the S&P 500”

The Wall Street Journal – May 23, 2019 – House Passes Bill Making Big Changes to U.S. Retirement System – Anne Tergesen and Richard Rubin

  • “Americans could see the most significant changes in more than a decade to their retirement plans under legislation the House of Representatives passed Thursday, with measures designed to make it easier for employers to offer 401(k)-type accounts and for participants to convert their balances into a steady lifetime income.”

  • “…The House bill, passed by an overwhelming House majority and expected to be taken up by the Senate before it heads to President Trump’s desk, would encourage 401(k)-type plans to offer annuities, a type of insurance contract that guarantees a monthly income stream as long as a retiree lives. It also would repeal the age cap for contributing to traditional individual retirement accounts, currently 70½, and would increase the age at which savers must start taking withdrawals from 401(k)s and IRAs to 72 from 70½. Additional features benefit part-time workers, parents, home-care workers and employees at small businesses.”

  • “…The House bill…passed with a vote of 417-3. Senators have signaled they are keen to quickly take up the legislation, and Mr. Trump isn’t expected to oppose it…If passed, the changes would be the most significant to retirement plans since 2006, when Congress made it easier for employers to enroll workers automatically in 401(k)-type plans and invest their money in funds that shift from stocks to bonds as people age.”

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