How Can Conservative Investors Survive in this Low Interest Environment?

Posted March 29, 2012 by admin. tags:Tags: , ,
Piggy Bank

Paragon Wealth Management advised conservative investors to think twice when investing in CDs or money market funds.

“Investors who save money in CDs and money market funds don’t have a lot of options right now,” said Dave Young, president and founder of Paragon Wealth Management. “With inflation rates at 3 to 4 percent and interest rates between 0.5 and 1.9 percent, savers are actually losing money in their “conservative” accounts.”

Ben Bernanke, chairman of the Federal Reserve, said they’ll keep interest rates this low until sometime in 2014.

“Savers can either stay ultra conservative, and watch their savings go down each year or take a little more risk in order to get higher returns,” said Young. “On a one to ten risk scale, with ten being the most risky, I believe that many investors would benefit by slightly moving up the risk scale.  If they move from a level of one to a three or a level of three to five they could potentially, significantly increase their earnings.

Young said, “On the other hand, investors shouldn’t jump from very low to very high risk.  That is usually when you see problems. Sometimes investors get tired of earning one percent, so they quit and move over into something extremely aggressive that promises a 20 percent return. He cautioned investors not to get extremely aggressive and invest in things they don’t understand, because that is often when they lose everything.”

“It is important for investors to determine their asset allocation based on their individual risk tolerance,” said Young. “This will help them stay invested over the long-term and optimize their investment choices.”

Making sure your portfolio is structured properly is more important than ever with interest  rates this low.

_____________________________________________________________________________

Watch this video to learn more about how to invest when interest rates are low.

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Debt Limit – A Guide To American Federal Debt Made Easy

Posted March 22, 2012 by admin. tags:Tags: ,


Our national debt is a very serious matter but because it is such a large number it takes it out of the realm of reality and makes it difficult to understand. This short video helps put it into perspective.

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results. 

The First Break?

Posted March 15, 2012 by admin. tags:Tags: , ,
Chess Game

Written by Nathan White, Chief Investment Officer, Paragon Wealth Management

Is this the first move in the long awaited end to the bond bull market or just a short-term blip? Treasury yields shot up yesterday after comments by the Federal Reserve seemed to indicate that since the economy is picking up there would not be a need for another round of bond purchases.  Interest rates have been pushed to historic lows due to slow economic growth, central bank purchases, flight to safety moves (i.e., European credit fears), and general investor aversion to equities. Due to these factors the U.S. government has had an easy time financing its large budget deficits which has pushed debt levels up drastically. Eventually these government actions could lead to significant inflation and/or a fiscal crises such as Europe is experiencing which would be significant negatives for bonds.

Massive amounts of investor money has been flowing into bonds and they posted stellar performance last year. Many (including us) have been calling for the end of the 30 year bull market in bonds because with rates at near zero they simply can’t get any lower. The difficult part is trying to call when rates will start moving back up. Over the past 3 years many have placed unprofitable trades trying to time the end of the bond bull market.  The idea is right but the timing (as always) is difficult to pull-off.  Just because rates are low doesn’t mean that they will jump back up drastically.  Many factors (i.e., baby boomers retiring, continued central bank action, credible deficit reduction actions, etc.) could keep a lid on rates for a while to come.  Perhaps it will just be a slow inexorable climb. So has the tide started to shift?….stay tuned.

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results. 

 

PARAGON’S TOP FLIGHT PORTFOLIO INCREASED 410.7% OVER 14 YEARS

Posted March 9, 2012 by admin. tags:Tags: , ,
Park and pond



Paragon Wealth Management’s growth portfolio, Top Flight, increased 410.7 percent from January 1998 through February 2012.

“We are happy to see these numbers over a 14-year time span in our growth portfolio,” said Dave Young, president and founder of Paragon Wealth Management.

Young designed Top Flight in January 1998 to be a dynamic, overall solution for the growth portion of a portfolio. It is specifically for the growth-oriented investor.

“Top Flight’s objective is to generate superior absolute returns while attempting to protect against downside volatility,” said Young. “While we cannot guarantee Top Flight will meet this objective, we manage the portfolio with this goal in mind.”

Top Flight invests primarily in exchange-traded funds (ETFs) that cover a wide range of asset classes, which provides investors’ portfolios with focus and flexibility.

The portfolio is managed using two unique groups of quantitative models. The first group of models is proactive in nature and determines which areas to invest in. The second group is protective in nature and determines how much of the portfolio will be invested and how much will be in cash at any point in time.

Disclaimer
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results. 

Gold Falls 5% In A Day!

Posted March 1, 2012 by admin. tags:Tags: ,
Gold egg

Written by Nathan White, Chief Investment Officer, Paragon Wealth Management

The price of gold fell over $90 today to close just below $1700/ounce.  That would be the same as the Dow falling 650 points! Moves like this highlight my view of the risk inherent in owning gold at these prices.  The fall was due to comments by Fed Chairman Bernanke before Congress today where he indicated that QE3 will probably not be needed.  Initially many thought that the downward move was just a kneejerk reaction but then it continued down.  What I find interesting is that many gold bugs (i.e., people who love gold)  tend to despise the Federal Reserve and its actions or existence and buy gold to protect themselves.  However, after they have bought gold they then have a vested interest in the Fed continuing the actions that they fundamentally disagree with!  Talk about irony.  So when the Fed hints that they won’t be pumping in as much money through QE actions – whoosh, down goes the price of gold.

I for one am glad to see the Fed not continue another program like QE that just serves to distort market prices in my opinion.  I don’t want any more QE’s as I think the economy can stand on its own. Although I’m very worried about future inflation I don’t think gold would be the best hedge as it has already priced in significant inflation.  I’m worried about how the Fed will eventually unwind its massive balance sheet and the consequences that would follow.  This unwinding would be a tightening of monetary policy and bad for gold.  Gold has been a major beneficiary of the historic easy-money actions of the Fed but at this point the Fed is mostly out of ammo and its actions are producing fewer and fewer marginal gains which are not worth the cost.  It’s like the junkie who needs to keep taking more and more to get a high and you know how that story ends.  Let’s hope the economy gets stable enough that it will be able to withstand the potential ramifications of this unwinding….

Disclaimer

 

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.  

Blog Role

Meta