Young's World Money Forecast

Since 1978 With a 32 Year Vacation

Richard C. Young Explains: How to Invest Like Einstein

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Originally posted October 23, 2018.

When asked to name the greatest invention in history, Albert Einstein responded, compound interest.

Over three decades ago I started our family investment counsel firm focusing on the miracle of compound interest to help retired and soon to be retired investors just like you.

My short and quick goal was, as it remains today, safety of principal and a consistent flow of income through investors’ long and peaceful retirements.

In J.R.R. Tolkien’s The Hobbit, when the wizard Gandalf asked Bilbo Baggins to take part in an adventure, the Hobbit told Gandalf that he viewed adventures as “… nasty, disturbing, uncomfortable things! Make you late for dinner.”

To meet our mission for family-centric clients, we wrap the Hobbit’s security blanket around Einstein’s concept of compound interest. This duo forms the foundation of our prudent investor platform. And no, we do not advise investing adventures for our clients.

Consistent Cash Flow and Security of Principal

To a one, when clients join us, they know that we, on their behalf, are focused on a consistent flow of cash, security of principal, and the miracle of compound interest. We neither speculate nor market time. We base our sound investments on the Prudent Man Rule, first initiated by Justice Samuel Putnam back in 1830.

The discretely managed portfolios at our investment counsel firm are crafted selecting individual securities for clients one at a time, like rare postage stamps.  As you know from reading my reports, we have moved away from the mutual fund model, especially as regards index funds, products whose time has past.

We craft portfolios by combining dividend-paying blue-chip stocks, each with a long record of increasing dividends annually. Our portfolios also include a substantial mix of blue-chip fixed income, whether corporate or government securities. The majority of portfolios are weighted 60/40 (stocks/bonds) or the inverse.

Our most defensive portfolios are aimed at investors looking to draw 4% (our base target) annually from retirement portfolios with (1) minimum volatility and (2) a high degree of comfort.

If you prefer a personalized approach, give my family-focused investment counsel firm a call (888-456-5444) to discuss today how we might make your investment life a little bit easier, and more productive for you.

At Richard C. Young & Co., Ltd. we all look forward to sharing our retirement (current or future) strategies with you.

Warm regards,

Dick Young

The Singularity Is Nearer: Ray Kurzweil

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Originally posted May 28, 2025.

Ray Kurzweil has been a leading developer of artificial intelligence for 61 years, longer than any other living human. I am reading his most recent book, The Singularity is Nearer: When We Merge with AI. The implications of artificial intelligence are immense, and Kurzweil is viewing the technology from the forefront in his position as Principal Researcher and AI Visionary at Google. The book’s website explains:

The world’s most renowned oracle of technological change shows how human minds will merge with AI within the next two decades and what this momentous transformation will mean for us all.

One of the greatest inventors of our time, futurist Ray Kurzweil published his landmark book The Singularity Is Near in 2005 and dozens of his predictions about technological advancements have come true—with concepts like AI, intelligent machines, and biotechnology now widely familiar to the public.

In this visionary and fundamentally optimistic new book, Kurzweil brings a fresh perspective to advances toward the Singularity. Kurzweil predicts that by the end of this decade, AI will exceed human levels of intelligence and by 2045, we’ll be able to enhance our intelligence a millionfold, expanding our consciousness in ways we can barely imagine by connecting our brains directly to the cloud. Human life will be changed forever once we live free from the limits of biology—and this eventuality is drawing ever nearer.

Topics touched on by Kurzweil in the book are:

  • Rebuilding the world, atom by atom with devices like nanobots
  • Radical life extension beyond the current age limit of 120
  • Reinventing intelligence by connecting our brains to the cloud
  • How exponential technologies are propelling innovation and improving all aspects of our well-being
  • The growth of renewable energy and 3D printing, which can be applied to everything from clothes to building materials to growing human organs
  • Addressing potential perils of biotechnology, nanotechnology, and artificial intelligence
  • AI’s impact employment and human safety
  • “After Life” technology to reanimate those who have passed away through a combination of data and DNA
  • How this next stage of humanity’s evolution can and will transform life on earth profoundly for the better

Kurzweil discusses his vision of AI in the video below:

Concentrate on Dividend Record and Compounding

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Originally posted March 11, 2020.  There are few histories as crucial to the course of my life as my awakening to the power of compound interest and the importance of dividends. Since my decision to climb on the dividend bandwagon, I have been an evangelist to hundreds of thousands of paid subscribers, and many more investors beyond. My message has been consistent and clear, and I don’t regret focusing on dividends a bit. Here’s how it all started.

Back to Monterey and Woodstock I’ve been developing investment strategies for investors like you before The Association kicked off the 1967 Monterey International Pop Festival with “Along Comes Mary” or Richie Havens opened Woodstock in August 1969. I started soon after John F. Kennedy was shot in Dallas in November 1963, and even before Dr. Martin Luther King, Jr. was shot at the Lorraine Motel in Memphis in April 1968. That’s a long time ago. The ‘60s was of course a seminal decade in American history. Key events, including the difficult investment environment of the ‘60s, seem like yesterday. My 1964 Beginning I’ve put together a display that tracks the Dow Jones Industrial Average through the decades. When I entered the securities business in the summer of 1964 (with Ed Rosenberg, Clayton Securities), I had no way of knowing that during my complete career in the Boston investment community, which ended in 1981, the Dow would end lower than when I began. How would you have liked to have retired in 1964 and faced a 16-year Dow downer? Talk about retirement financial hell. As my display indicates, the decade of the ‘60s provided a sad annual average return (ex-dividends) of only 1.65%. Moreover, the 1970s were set to be even worse. When the curtain came down on this miserable decade, investors had scored an average return of only 0.5% (before dividends). Thankfully for conservative investors today, as has been the case well before the ‘60s and ‘70s, dividends remain the name of the game. Ben Graham’s Powerful Investment Advice After my first reading of Security Analysis by Ben Graham in 1963, it’s still my most powerful investment influence. Ben was Mr. Dividends. I became attached to the concept before I landed at Clayton Securities at 147 Milk St. in Boston’s financial district. As early as 1964, I knew I would concentrate on dividends throughout my investment career.

My Top 10 Fund Investments

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Dick Young

My top fund investments include three fixed income-centric funds, two gold funds, two dividend-centric equity funds, two inflation hedge energy funds, and one dividend-centric consumer equity fund for a total of ten major positions in all.

My fund volatility in the normal year approaches zero. 100% of my investing is based on the Prudent Man Rule and Ben Graham’s Margin of Safety. I do not speculate with the money I have worked a lifetime to earn, and I never have. I have never taken what most investors refer to as a significant loss. In fact, I can rightfully be referred to as a pretty boring investor.

The Establishment of the Prudent Man Rule

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Justice Samuel Putnam wrote the decision in Harvard College vs. Amory. Samuel Putnam. Image from page 56 of “History of Essex County, Massachusetts: with biographical sketches of many of its pioneers and prominent men” (1888)

The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. The Prudent Man Rule directs trustees “to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital invested.”

Since I started our family investment management firm in 1989, I have operated under the assumption that the Prudent Man Rule to this day carries as much weight as it did in 1830. Common sense and prudence just don’t go out of style—ever.

Bessent: The Fed Must Change Course, but No Mention of Gold

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Secretary of the Treasury Scott Bessent looks on as President Donald Trump and President Ferdinand Marcos Jr. of the Philippines participate in a bilateral meeting, Tuesday, July 22, 2025, in the Oval Office. (Official White House Photo by Daniel Torok)

On Friday, Treasury Secretary Scott Bessent explained in an op-ed in The Wall Street Journal the dangers of the expanding responsibilities and power of the Federal Reserve. He noted the Fed’s expanded powers granted in the Dodd-Frank Act, and that fifteen years afterward, the results of granting the central bank those extra powers have been disappointing. He wrote:

Regulatory overreach compounds the problem. The Dodd-Frank Act dramatically enlarged the Fed’s supervisory footprint, transforming it into the dominant regulator of U.S. finance. Fifteen years on, the results are disappointing. The 2023 failure of Silicon Valley Bank illustrates the dangers of combining supervision and monetary policy. The Fed now regulates, lends to and sets the profitability calculus for the banks it oversees, an unavoidable conflict that blurs accountability and jeopardizes independence. A more coherent framework would restore specialization: empowering the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency to lead bank supervision, while leaving the Fed to macro surveillance, lender-of-last-resort liquidity and monetary policy.

At the heart of independence lies credibility and political legitimacy. Both have been jeopardized by the Fed’s expansion beyond its mandate. Heavy intervention has produced severe distributional outcomes, undermined credibility and threatened independence. Looking ahead, the Fed must scale back the distortions it causes in the economy. Unconventional policies such as quantitative easing should be used only in true emergencies, in coordination with the rest of the federal government. There must also be an honest, independent, nonpartisan review of the entire institution, including monetary policy, regulation, communications, staffing and research.

The U.S. faces short- and medium-term economic challenges, along with the long-term consequences of a central bank that has placed its own independence in jeopardy. The Fed’s independence comes from public trust. The central bank must recommit to maintaining the confidence of the American people. To safeguard its future and the stability of the U.S. economy, the Fed must re-establish its credibility as an independent institution focused solely on its statutory mandate of maximum employment, stable prices and moderate long-term interest rates.

Responding to Bessent’s op-ed in The New York Sun, former economic advisor to President Trump, Larry Kudlow, celebrates the coming “takeover” of the Fed by President Trump’s appointed governors. He writes:

As I have suggested, the economy, both present and future, is stronger than folks may think.

Unsurprisingly, President Trump responded with a brief post on Truth Social, saying, “Jerome ‘Too Late’ Powell should have lowered rates long ago.” Mr. Trump exclaimed: “As usual, he’s ‘Too Late.’”

Hopefully Mr. “Too Late” Powell will get the Fed’s fund target rate down to 3 percent from its current 4.5 percent by the end of this year.

Yet the bigger story is perhaps best summarized in a Wall Street Journal headline, “Trump Is Making Strides In His Takeover of the Fed,” as the Council of Economic Advisers chairman, Stephen Miran, is taking a leave of absence in order to temporarily fill a Fed seat on the central bank’s board of governors.

The New York Sun’s editors further riffed on Kudlow’s response with another editorial on September 7, wondering why Bessent hadn’t mentioned gold, and wondering why the administration hadn’t made more of the issue.

The first thing we did when we saw Mr. Bessent’s column was to scan it for the word “gold.” The monetary metal was unmentioned. That strikes us as odd. On that very day, after all, the value in terms of gold at which greenbacks were trading was about to set a new low of less than a 3,558th of an ounce of the monetary metal. When graphed it’s at the bottom of a decades-long slide. It’s the lowest value in terms of gold ever recorded for the greenback.

We understand that, in the age of fiat money, the legislated value of the dollar is not supposed to matter. In 1971, Nixon closed the gold window at which foreign governments could redeem dollars they held at a 35th of an ounce of gold. In 1973, Congress set the value of the dollar at a 42.22nd of an ounce of gold. Yet Uncle Sam hasn’t enforced that. It is amazing just how loath is our leadership at the Treasury and the Federal Reserve to open up this issue.

What’s so startling about the official silence on the collapse of the dollar is that Mr. Bessent and, above him, President Trump would be — or so it seems to us — a promising pair to take on the issue of fiat money. In the 2016 Republican primaries, moreover, Mr. Trump was widely quoted as saying, per NPR, “Bringing back the gold standard would be very hard to do, but, boy, would it be wonderful. We’d have a standard on which to base our money.”

It doesn’t appear likely that Trump or Bessent will lead a push for a return to the gold standard. The immediate effects of such a move would be counter to the greater priorities Trump has signalled in increasing American manufacturing. If a gold standard were introduced, the value of a dollar would likely soar in comparison to international fiat currencies, and imports could become cheaper relative to American manufactured goods, driving up imports and driving down American manufacturing jobs. Those looking for America to return to the gold standard will likely be waiting for another president.

Richard Young Reports: 50+ Years with Fidelity and Wellington

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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 firms feature great cultures, industry-leading technology, well-rounded investment programs for individuals, families, and small businesses–the type of folk I hoped to be associated with throughout my investment career.     

Not a business day goes by that one of my associated companies is not involved with one or more of Fidelity or Wellington’s services.

I never would have expected, as I started out in August 1971, that I would be working with Fidelity and Wellington for over 50 years.

In Wellington’s case it, to this day, manages hundreds of billions of dollars in blue-chip, “prudent man rule” quality investment mutual funds. 

In the early ’90s, Wellington’s chief investor relations officer informed me that I directed more mutual fund assets Wellington’s way in a given year than did the rest of the combined American investment newsletter industry.

And now in 2025, with our little family investment management company requiring a cutting-edge custodian for our $1.8 billion-dollar conservative Boston-style management company we, not surprisingly, rely on Fidelity. 

Your Survival Guy, hard to believe, joined my family business over two decades ago. But before that, he was at Fidelity which he too recalls as being run like a family business. He writes:

When I joined the family business [Fidelity], I was Fidelity employee number twenty-something-thousand. I helped customers/participants of Fortune 500 companies manage their money in this fairly new savings vehicle known by its IRS code: 401(k). It turned out to be a thing. I’ll always remember how CEO Ned Johnson III ran the firm like the family business that it was.

In memos to employees, Mr. Johnson wrote to you as if you were seated around him at the dinner table. Business first, then, after some red wine and dessert (and maybe a piece of dark chocolate for digestion; because he was into taking care of one’s health) he’d leave you with something to think about—like his favored Japanese philosophy Kaizen, meaning constant improvement. Reading his memo in my little cubicle, not at his dinner table, I truly believed that through small steps—like compound interest—I could become the best version of myself. Then it was back to stuffing checks into envelopes.

We need to be reminded of this in times like these. Because when a video game company you typically see at the Mall can stop the market in its tracks, you need to figure out if you’re doing everything you can to protect your money. Are you with an investment company that treats you like a family member? Take a look at the brokerage firms selling their clients’ (I hope not yours) trading patterns to their other customers—these are household names that may (or may not) surprise you. Pay attention.

Action Line: Get your money with a firm that treats you like family. Too many investment firms are profiting from you, for example, with your information without you even knowing it. And don’t get me started on how they use your cash to lend out to others and pocket the profit.

P.S. Read more about how I got my start at Model Roland & Co. back in 1971, and gold’s 50-year price explosion.

Originally posted February 23, 2021.

Would the Pat Buchanan Plan Work Today?

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By Ksu_Sha @ Adobe Stock

In July 2014, I outlined for readers a plan by Pat Buchanan to end the corporate income tax. Pat’s plan, or one like it, could revolutionize the American economy. I wrote:

Pat Buchanan suggests abolishing the corporate income tax and replacing it with a revenue-neutral 10% tariff on imports. Pat maintains that imports kill U.S. jobs and subtract from GDP. What, laments Pat, has our political class done to our once self-sufficient American Republic? Pat’s idea would give a huge boost to our economy. A flat 10% tax on corporate profits, personal income, and retail sales might face less severe headwinds in passing muster in Congress. Either concept would prove a valued tonic that all Americans could warmly embrace.

The tariff plan released by President Trump, with a 10% tariff on most countries and higher tariffs on countries with the largest trade deficits, is substantially similar to Pat’s plan from all those years ago.

President Trump has said a number of times that he’d like to replace the income tax with tariffs, but according to the Tax Foundation, that probably isn’t possible. Erica York and Huaqun Li write:

Even eliminating income taxes for a subset of taxpayers, such as those earning $200,000 or less, would require significantly higher replacement revenues than tariffs could generate. We simulated zeroing out positive tax liability for taxpayers earning under $200,000 without making any changes to tax credits (so, taxpayers could still qualify for refundable portions of tax credits but many would not benefit from non-refundable tax credits as they have zero tax liability to offset). We estimate it would reduce federal tax revenue by $737.5 billion in 2025 on a conventional basis. Over the 10-year budget window, it would reduce federal tax revenue by nearly $8.5 trillion on a conventional basis.

The tariffs Trump has imposed and scheduled as of April 2025 would generate nearly $167 billion in new tax revenue for the federal government in 2025 on a conventional basis, or less than 25 percent of the cost of eliminating income taxes for people earning below $200,000.

The Tax Foundation’s prediction of $167 billion in new revenue from tariffs suggests about $14 billion per month, on top of what was about $7 billion per month of tariff duties collected regularly. In May, the United States collected a total of $22 billion in customs duties (tariffs). Pulling out the $7 billion that was normal before Trump’s tariffs, that’s an additional $15 billion per month, or $180 billion per year. That’s already more than the Tax Foundation’s projection, and Trump hasn’t even instituted full tariffs on most countries. But this week, he announced that more tariffs are coming fast for countries that refuse to make trade deals. On August 1, tariffs on a number of countries will be raised from 10% to 25% or higher. Those countries include:

  • Japan 25%
  • South Korea 25%
  • Malaysia 25%
  • Kazakhstan 25%
  • Tunisia 25%
  • South Africa 30%
  • Bosnia and Herzegovina 30%
  • Indonesia 32%
  • Bangladesh 35%
  • Serbia 35%
  • Cambodia 36%
  • Thailand 36%
  • Laos 45%

It remains to be seen just how high American tariffs on imports will be, and if trade deals are signed between Trump’s administration and foreign nations, perhaps there won’t be many tariffs at all. But it appears that revenues could be significantly higher than the original Tax Foundation prediction. And while probably not high enough to eliminate the individual income tax, perhaps, as Pat suggested, the corporate tax could be reduced drastically or even eliminated altogether.

In 2024, the United States collected just under $490 billion in corporate tax receipts. The annualized 12-month moving average of imports to America in May was $4.16 trillion.  

So, how much would Trump have to charge on all those imports to generate enough to cover the corporate tax? First, I’ll back out $7 billion a month, so it’s only “new” customs duties being used. Once that’s factored in, replacing corporate taxes with tariff revenues would demand a 13.8% effective rate on all imports.

These are static numbers in a dynamic world, but as a thought experiment, it’s compelling. The idea of bringing the corporate tax rate to zero creates a host of new possibilities for job creation and innovation in the United States. Imagine how competitive American corporations could be when paying no taxes on their profits. The rate is slightly higher than Pat Buchanan was hoping for, but if he reads this, I don’t think he’ll grumble too much.

Pat wrote in one of his most read columns, in May 2019, titled Tariffs: The Taxes That Made America Great, “Of the nations that have risen to economic preeminence in recent centuries — the British before 1850, the United States between 1789 and 1914, post-war Japan, China in recent decades — how many did so through free trade? None. All practiced economic nationalism.”

Perhaps the elimination of the corporate tax rate could make American business great again.

 

 

What Is Gold Telling Investors? And the Dow 30?

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By saritwat @ Adobe Stock

Take a good look at my chart below of the Dow Jones Industrial Average (Dow 30) and the price of gold. You can see gold hitting new highs at $3,342/troy ounce, while the DJIA Index has fallen to 39,669 points, or a drop of about 11.9% since peaking on December 4, 2024. 

Gold is in a secular bull market, and it will remain in a secular bull market until the world’s central banks stop printing excessive amounts of money and governments stop issuing excessive amounts of debt. One indicator of prospective returns in gold is the ratio of the Dow Jones Industrial Average to the price of gold. When the ratio is falling, gold is outperforming the Dow. Over the last 124 years, as portrayed in the chart below, there have been three completed secular bull markets in gold versus the Dow. The current bull market is the fourth.

 

In each of the previous bull markets, the ratio of the Dow to gold dropped below six. Today, the Dow is trading at 12X gold. How much further it will fall is anyone’s guess. Don’t put yourself in the prediction business. Understand, though, that as the ratio falls, the relative affordability of the Dow is rising. 

Can you own too much gold? For most investors, 10% is probably the max. You buy gold as an insurance policy. Gold offers protection against inflation, currency debasement, and political and geopolitical turmoil. I buy gold and hope it goes down, because when gold is falling, it is often true that everything else in your portfolio is rising. 

The Dow 30 today consists of these companies:

Symbol Company Yield %

AMZN

 Amazon.com Inc 0

AXP

 American Express Co 1.30

AMGN

 Amgen Inc 3.37

AAPL

 Apple Inc 0.51

BA

 Boeing Co 0.00

CAT

 Caterpillar Inc 1.94

CSCO

 Cisco Systems Inc 2.94

CVX

 Chevron Corp 5.05

GS

 Goldman Sachs Group Inc 2.40

HD

 Home Depot Inc 2.66

HON

 Honeywell International Inc 2.34

IBM

 International Business Machines Corp 2.80

JNJ

 Johnson & Johnson 3.38

KO

 Coca-Cola Co 2.85

JPM

 JPMorgan Chase & Co 2.44

MCD

 McDonald’s Corp 2.29

MMM

 3M Co 2.24

MRK

 Merck & Co Inc 4.24

MSFT

 Microsoft Corp 0.89

NKE

 Nike Inc 2.99

PG

 Procter & Gamble Co 2.54

SHW

 Sherwin-Williams Co 0.95

TRV

 Travelers Companies Inc 1.74

UNH

 UnitedHealth Group Inc 1.44

CRM

 Salesforce Inc 0.67

NVDA

 NVIDIA Corp 0.04

VZ

 Verizon Communications Inc 6.21

V

 Visa Inc 0.71

WMT

 Walmart Inc 1.03

DIS

 Walt Disney Co 1.21

If you follow the Dogs of the Dow strategy, you’ll quickly notice a few yields over 4%, with a few more in the 3% range. Historically, though, the yield on the Dow Jones Industrial Average is still low at 1.84% today.

What are gold and the Dow telling investors today? Diversity can benefit a portfolio. I have always recommended diversification and patience built on a foundation of value and compound interest.

Click here to find your port in a storm. 

The Power of Gold

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By monsitj @ Adobe Stock

As the purchasing power of the American dollar has declined steadily since gold convertibility ended in 1971, the purchasing power of an ounce of gold is strong. The spot price of gold closed at an all-time high of $2,989 yesterday and crossed over $3,000 an ounce in trading today. 

The purchasing power of gold is also near record highs, though it hasn’t quite exceeded its peak during the hyperinflation of the 1980s. 

Since 1913, the year the Federal Reserve was created, the purchasing power of the U.S. dollar has fallen by 96%. The purchasing power of a single ounce of gold over that same time period has more than doubled. That is no coincidence. Gold is a store of value—a wealth preservation vehicle. Gold won’t make you rich, but it also won’t make you poor. Gold is a currency. It can’t go bankrupt or lose its value because of poor management, accounting fraud, world war, or hyperinflation. Investors who truly understand gold recognize that gold should be counted in ounces, not in dollars. Because while the dollar value of gold may fluctuate from year to year, it will be worth many times its current value during the next generation and in those that follow.

Markets are stormy. Find your port in the storm by clicking here to subscribe to the Young’s World Money Forecast email alert. 

Richard C. Young & Co., Ltd.

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Disclaimer:

The information contained here is for informational and educational purposes only. It is not intended nor should it be considered investment advice or a recommendation of securities. Past performance is not a guarantee of future results. It is possible to lose money by investing. You should carefully consider your investment objectives and risk tolerance before investing.