Broker Check

The RFG Weekly Wealth Report

June 20, 2016
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The world's stock markets took it on the chin last week.

A one-two punch was delivered with the Federal Open Market Committee (FOMC) meeting leading and concerns Britain will leave the European Union following.

On Wednesday, the Federal Reserve confirmed what many had suspected. There would be no June rate hike. There was unexpected news, too. The Fed lowered its projections for U.S. growth to 2 percent through 2018. In the past, dovish Fed actions have pushed U.S. stock markets higher; however, stocks were lower by the end of the day on Wednesday, according to MarketWatch.

Investor reticence may owe much to concerns about the possibility of a British exit. Experts cited by Barron's suggested an EU exit may already be priced into markets since European bank stocks "have been crushed... with some down 40 percent and others at lows not seen in years."

Treasuries and high-quality government bonds rallied through the end of the week as investors opted for 'safe haven' investments.

ARE YOU WORTH YOUR WEIGHT IN PLATINUM? Gold is not the only substance that commands a hefty price per pound. The Telegraph recently reported on the most valuable materials in the world by weight and some were quite surprising!

  • Saffron is the most valuable spice in the world. Most of the world's saffron comes from Iran and it can cost as much as $65 a gram, according to The Guardian. There are almost 454 grams in a pound, putting the value of saffron at $29,510 a pound.
  • Beluga caviar is mighty expensive. Guinness World Records puts the price at about $34,500 a kilogram. A kilogram is a little more than two pounds.
  • Platinum is expected to cost about $1,005 an ounce during 2016, according to Kitco. There are 16 ounces in a pound, putting its per pound value at $16,080.
  • Gold may run about $1,250 an ounce, or $20,000 a pound, by the end of 2016, according to CNN Money.
  • White truffles are "the fanciest tubers in the fungi kingdom," according to Vox.com. A four-plus pounder sold for $60,000 at auction in 2014, but more common varieties sell for about $300 a pound.
  • Venom is pretty tough to harvest, and it commands a premium price. Snake venom runs about $370 per gram, scorpion venom about $596 per gram, and spider venom comes in at about $1,342 per gram. Multiply these amounts by 454 and you get (per pound for each) $167,980 for snake venom, $270,584 for scorpion venom, and $609,268 for spider venom!

Gram for gram, there are some things in the world more valuable than gold!

Quote of the Week

"My father gave me the greatest gift anyone could give another person, he believed in me."

--Jim Valvano, College basketball player, coach, and broadcaster

Golf Tip of the Week

Don't Pick Up Your Head Too Soon

A common reason for missing putts - even the easy ones - is picking your head up too early to watch the ball drop into the cup. It's normal to be anxious about where the ball is going, but shifting your head just after the stroke can cause you to open or close the blade of your putter, unintentionally sending the ball off course. Ideally, you want to keep your finish position until you hear the ball rattle in the hole.

If you find yourself moving your head too soon, try forcing yourself to remain in position and listening for the rattle.

Financial Question of the Week

Should I shoulder all of the risk in my retirement portfolio?

Investing, markets, and potential returns are all about risk. How you define and handle risk makes portfolio decisions unique to your specific situation. Some have no problem with risk, and others are continuously worrying about the next market correction.

This is where the transfer-of-risk argument starts, and where the topic of annuities rears its often misunderstood head.

Annuities are contractually guaranteed transfer-of-risk products, and these unique solutions are certainly not for everyone. The decision of whether you need an annuity or not really comes down to a basic question, do you want to shoulder all of the risk, or do you want to transfer some of the risk?

Some of us are "all in" when it comes to how much risk they are willing to shoulder, but most people want to transfer the risk with at least a portion of their portfolio. As most of us get older, the more risk we are willing to transfer and the less we are willing to shoulder.

Annuities contractually solve for four goals:

  • Principal protection
  • Income for life
  • Legacy
  • Long-term care

If you do not need to solve for and transfer risk for more than one of these four items, you do not need an annuity.