Young's World Money Forecast

Back in February, I wrote to you about how I started in the institutional research and trading investment business at Model Roland & Co. on Federal St. in Boston in August 1971. Just up the street from Model were Fidelity Investments, and Wellington Management, both of whom I called on from my very first hours on the job. Over five decades ago, Ned Johnson, aka “Mister Johnson,” ran the show at Fidelity. At Wellington, Jack Bogle, “Mr. Mutual Fund,” had not yet left Wellington to start Vanguard.    My focus in the initial going was international research and trading, and remains so today all these decades later.  I still consider Fidelity and Wellington the industry leaders. Both … [Read More...]

Lumber prices are breaking records. First position Spruce-Pine-Fir futures are trading at over $1500/metric ton. Perhaps the most frightening aspect of the spike in lumber prices is that builders have been able to pass them on to customers. The Fed should be very worried about the rapid rise in prices going directly to consumers. The central bank's policy of low interest rates for longer could buckle under the pressure if inflation heats up faster than expected. Ryan Dezember reports in The Wall Street Journal: The Fed last week recommitted to near-zero interest rates, which have fueled the red-hot housing market. Rising home prices and low rates have also helped existing homeowners … [Read More...]

First-quarter GDP estimates came in at a robust 6.4%, with growth likely to accelerate to more than 8% next quarter. Over the coming weeks, economic activity in the U.S. will surpass its pre-pandemic high. With the Fed pumping over a trillion dollars of liquidity into financial markets annually and the Six Trillion Dollar Man (Joe Biden) proposing new schemes to run up the deficit, GDP is poised to increase at its fastest rate in decades this year. Josh Mitchell reports: A burst of growth put the U.S. economy just a shave below its pre-pandemic size in the first quarter, extending what is shaping up to be a rapid, consumer-driven recovery this year. Gross domestic product, the broadest … [Read More...]

The pandemic created a perfect storm for Amazon. With more people shopping, and more people working from home using cloud services, Amazon's profits have soared. Sebastian Herrera reports for The Wall Street Journal (abridged): Amazon. AMZN 0.37% com Inc. reported record quarterly profit as demand remained robust for its deliveries, cloud-computing and advertising businesses, capping a blockbuster earnings season for the world’s largest technology companies. The Seattle company’s profits in the year since the pandemic started exceeded $26 billion, more than the previous three years combined. Net income from January to March more than tripled to $8.1 billion, and revenue of $108 billion … [Read More...]

According to a report by Edge by Ascential, which claims to deliver "one of the industry's most accurate and actionable sales-driving data, insights and advisory solution sets," by 2025, Amazon.com will outpace Walmart in retail sales. Bloomberg's Spencer Soper reports: Amazon.com Inc. will supplant Walmart Inc. as the biggest U.S. retailer by 2025, according to a new report, suggesting the e-commerce giant has too much momentum for Walmart to stop despite big investments in its own e-commerce offerings. By 2025, U.S. shoppers will buy US$632 billion worth of products at Amazon and retail afflilites including Whole Foods Market, surpassing Walmart’s US$523 billion, according to the … [Read More...]

Vanguard Wellesley is a fund we have long admired at Young Research. It was once a go-to fund for clients, readers, close friends, and even dear family members. What gave Vanguard Wellesley Income so much appeal? Wellesley is the more conservative and younger cousin of the Vanguard Wellington Fund—the nation’s oldest balanced mutual fund. Over its almost 51-year history, Wellesley has invested an average of 65% in bonds and 35% in stocks. The bonds are primarily intermediate-term investment-grade corporates; the stocks are dividend-paying blue-chip names. Wellesley’s Baptism by Fire Wellesley was started in July of 1970. Not great timing for a fund with a bond-heavy … [Read More...]

I developed the Dynamic Maximizers® strategy to serve as an alternative to fixed-income portfolios in an era of historically low and manipulated interest rates. The Dynamic Maximizers® is a maximum safety portfolio, ideal for IRAs, ultra-conservative retired investors, and education savings programs. So far this century, stocks have cratered over 50% twice, with a third crash virtually baked into the cake because of total incompetence in Washington. My Dynamic Maximzers® strategy was a port in the storm during both the dotcom bust and the financial crisis. And while past performance is never a guarantee of future results, I expect similar relative stability from the Maxis during the next … [Read More...]