You Don't Need Great Timing to Build Great Wealth

By Sean Michael Cummings

Ronald Read led a humble life. He didn't bother with nice clothes. In fact, his appearance was so shabby that a pitying stranger once bought him a sandwich.

But by the time he died, he was worth almost $8 million.

His secret was long-term investing.

After serving in WWII, Read came back to the U.S. to work blue-collar jobs as a gas-station attendant and a janitor at JCPenney. And along the way, he put money into the stock market.

By buying great companies and holding them for the long term, Read amassed a seven-figure fortune. And he's a local legend in his hometown of Brattleboro, Vermont. The Brattleboro Memorial Hospital built a $23 million extension in his honor.

Sometimes, growing your wealth is as simple as owning great businesses over time. But Ronald Read's story isn't our only evidence...

As I'll explain today, we have more than half a century of market history to prove it.

10-Year Yield Hits 4.40% as Bond Market Begins to Adjust to Higher Forever: Higher Rates and Higher Inflation

Suddenly lots of talk the 10-year yield will revisit 5%, which is funny just a few months after Rate-Cut Mania.

By Wolf Richter for WOLF STREET.

The 10-year Treasury yield rose to 4.40% on Friday, the highest since November 27. During rate-cut mania in December, the yield had dropped below 3.80%.

Those moves in recent days and weeks added up, and they point to a gradual recognition in the bond market that inflation rates will be higher than what they’d been before the pandemic, that 2% inflation isn’t going to happen, and that the super-low interest-rate environment over the past 15 years – culminating in August 2020 when the 10-year yield was down to 0.5% – is over.

What comes next is unknown, but it’ll likely entail higher inflation of the type seen in the 1990s and before because the Fed isn’t willing to crash the economy and the labor market just to get to 2% inflation.

JPMorgan’s Federally-Insured Bank Is Fined $348 Million for Losing Track of “Billions” of Trades

By Pam Martens and Russ Martens: March 18, 2024

On Thursday of last week, two of JPMorgan Chase Bank’s federal regulators fined the riskiest bank in the United States $348 million dollars for engaging in “unsafe and unsound banking practices” for failing to supervise “billions” of trades on at least 30 global trading venues.

The Office of the Comptroller of the Currency (OCC) fined JPMorgan Chase Bank $250 million while the Federal Reserve fined the bank $98.2 million. The OCC said the misconduct occurred since at least 2019. The Fed said the bank had engaged in the misconduct over the span of nine years, from 2014 to 2023.

The key outrage embedded in these charges – that mainstream media failed to point out in its coverage last week – is that this “trading” activity did not occur at the registered brokerage firm of JPMorgan, which has properly licensed traders and trading supervisors. It occurred at the federally-insured bank, which is not allowed to have licensed traders – because casino banking brings on bank runs, bank panics and giant scandals that undermine Americans’ confidence in federally-insured banks.

A Six-Step Checklist to Protect Your Portfolio Against Volatility

At PBRG, we’ve developed an investing plan to keep us grounded even in the most volatile markets. If you stick to it, you’ll be able to outperform the average investor and limit your losses.

So run your portfolio through the six-step checklist below, and you’ll be ready for anything the market throws at you…

Is your portfolio diversified? Numerous studies show that asset allocation accounts for more than 90% of your investment returns. Greater diversification also results in lower risk. So a good start is owning a mix of domestic and foreign stocks, bonds, commodities, real estate, and gold.

Do you own true alternatives? Be comfortable with being uncomfortable. In other words, think outside the box. Get some exposure to “true” alternatives like collectibles, cryptos, private placements, and annuities. They’ll generate long-term outperformance while shielding your portfolio in the meantime.

Do you have a rainy-day fund? Cash is often a forgotten asset class, but it gives you optionality. You never know what opportunities life might throw at you. Whatever they are, cash typically meets the need better than anything else, so it’s crucial to hold some. We recommend allocating up to 10% to cash.