Consider these 15 threats to your retirement portfolio

The S&P 500 is currently at all-time highs.  As we are in the seventh year of a bull market, it is not difficult to hear the bullish story among the main stream press.  Just watch a little CNBC, Bloomberg or the evening news and the market pundits will make you question why you have any market fears at all.  Since we are frequently provided the bull case for the stock market, I always maintain a mental checklist of concerns I have about the overall economy and market.  Lately, I have noticed my checklist getting a little longer……. Economic slowdown in many emerging markets – China & Brazil Economic slowdown in Europe Price to earnings multiples on the S&P 500 at 10-year highs (3 full points above the 10-year average) Potential Greek Exit (“Grexit”) from the Eurozone ISIS Ukraine/Russia conflict Deflationary signals from around the globe Downward trending oil and copper prices Record low levels on the Baltic Dry Shipping Index Downward revenue and earnings per share revisions for the S&P 500 Index for 2015 consensus expectations More misses than exceeds on key economic statistics relative to consensus expectations Slower reported revenue and earnings growth Escalated currency volatility – currency wars? Negative Interest Rates in some parts of the world Positive stock reaction to clearly negative economic news Although I could continue, I will stop there.  All these concerns and yet the stock market is at a record high and the P/E valuation multiple is at a 10-year high as well.  It appears to me risk in the stock market is higher than commonly believed or communicated.  Thus, when you listen to the wall-to-wall positive spin on television, just think about some of these potential concerns.  Lately, it feels investors are forgetting about the risk element in the risk-reward investment equation.  While it is impossible to call an exact market top, it is prudent to be aware of valuations and potential… | Read More »

NFL contracts require new paradigm in investing

Former Indianapolis Colt Hall of Fame quarterback Johnny Unitas set a standard for NFL excellence during his record-setting 19-year career. Sadly, he also ranks among the NFL elite for staggering financial collapse after he borrowed from the City of Baltimore and the state of Maryland to fund a circuit board manufacturing company that quickly failed. Unitas filed for bankruptcy, and launched a financial battle that lasted more than 10 years after his death. Prior to his collapse, Unitas had invested in a string of a risky investments including a chain of bowling establishments, a prime-rib restaurant, an air-freight company and Florida real estate. Unitas’ story of NFL success swiftly followed by financial collapse remains compelling both for its pathos and its prevalence. In 2009 Sports Illustrated published its landmark survey noting that 78 percent of former NFL players end up bankrupt or facing severe financial stress within two years of retirement from football, and in the six years since, things have not improved. The roll call continues to astound: Terrell Owens, Warren Sapp, Adam “Pacman” Jones, Andre Rison, Bernie Kosar, Bart Scott, Tiki Barber, JaMarcus Russell, Mark Brunnell, Lawrence Taylor, Chris McAlister, Deuce McAllister, Vince Young, Sean Salisbury all filed for bankruptcy after lucrative careers. So ubiquitous are the bankruptcy filings, that the NFL revamped its Rookie Symposium program in 2007 to focus on post-career success. The NFL tries, but, according to former NFL player and Packer Hall of Fame member Kabeer Gbaja Biamila, that education only goes so far. “The NFL does its best, but the rookie symposium is only for people who are drafted. It doesn’t include players who sign as free agents,” he said. “And then, the players who do attend aren’t always paying attention. They give them information but these guys are thinking, ‘This will never happen to me. My situation is different.’” NFL players may understand the risk of getting hit on a cross-route, but… | Read More »