WSJ: Mandela Obituary

By SIMON CONSTABLE

Nelson Mandela

South Africa The Good News / www.sagoodnews.co.za, 

CC BY 2.0, via Wikimedia Commons

WSJ: Year-End Distributions Hold Dangers for Fund Investors

By SIMON CONSTABLE

Congratulations, you've made it through another year! Well, almost. For mutual-fund investors, there is at least one more thing that could trip you up: ignoring the so-called date of record for the capital-gains distributions that many funds pay near year-end. Failure to pay attention may mean you get taxed for profits you didn't actually participate in.

With stocks, you decide when to take your capital gain or loss when you sell. But funds must distribute substantially all of the net realized gains in their portfolios to investors each year, explains Brian Peer, co-portfolio manager at Novato, Calif.-based Hennessy Funds. See original story here.

WSJ: Why Flexible-Rate Mortgages Make Sense

By SIMON CONSTABLE

If you're buying a home anytime soon, here's some contrarian advice: Don't take out a fixed-rate mortgage. If you do, you're likely to pay more than you need to.

Instead, it often makes more sense to choose a floating-rate note, also known as an adjustable-rate mortgage. Even on a small mortgage, over time you'll save thousands of dollars. If you use the extra cash to pay down the loan, you'll save even more. See original story here.

Photo by Dillon Kydd on Unsplash

WSJ: 'Presidential Stock Cycle' Sees Weak 2014

By SIMON CONSTABLE

Tomorrow, as you cast a vote, you might also gird yourself for rocky markets ahead, especially during the first nine months of 2014.

How so? The second year of a presidential term is traditionally a period of subpar stock performance.

Specifically, since 1945, the second year of a president's term saw the S&P 500 gain 5.3% in price on average, versus 16.1% in the third, according to an analysis by S&P Capital IQ. No distinction is made between a president's first or second term. The clock simply starts over.The "presidential stock market cycle" says that stocks perform better or worse depending on the year of the president's term. The second year is the worst, and the third is the best, on average. See original story here.

Barrons: Zinc Prices Could Jump 20+%

By SIMON CONSTABLE

Now might be a great time to galvanize your portfolio with zinc futures.

Why? Booming construction in China, combined with mine closures, could propel prices about 20% higher over the next couple of years, as demand for the metal outpaces output. The likely result: a supply shortfall in 2015.

Zinc has moved roughly sideways since March. But benchmark prices of the metal—used in construction, automobile production, and the manufacture of brass—could hit $2,400 a metric ton by 2015, about 23% above its recent quote of $1,955 on the London Metal Exchange, analysts say. A recent report from brokerage firm Natixis cites "the imminent demise of a number of significant [zinc] mines around the world," as a cause. Mineral deposits get depleted as ore is extracted. At some point, it isn't profitable to continue digging. See original story here.

WSJ Live: Shiller Big Interview

By SIMON CONSTABLE

Blast from the past-- my 2010 interview with Robert Shiller, who was today awarded the Nobel Prize in economics...

Robert Shiller

MeJudice, CC BY 3.0, via Wikimedia Common

WSJ: 'Mean Reversion' Suggests Big Stock Gains Won't Continue

By SIMON CONSTABLE

Investors tend to be either overly optimistic or overly pessimistic based on recent experience. They often think recent good or bad performance will continue indefinitely.

In simple terms, years of subpar stock returns will be followed by better returns to bring overall performance back to the long-term norm. It works vice versa, also.But investment returns over time are more likely to exhibit what economists call "mean reversion." That's the idea that over long periods the annual returns of various assets will swing back toward their long-term average—or back to the mean. See original story here.