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Blue Ocean Blog

The Blue Ocean Portfolios blog covers various financial and investing topics such as retirement, investing, indexing, financial advising, and more.
James A. Winkelmann, Registered Fiduciary™PrincipalJim@BlueOceanPortfolios.com
Jim co-founded Blue Ocean Portfolios, LLC in 2009. Prior to this he owned and managed regional full services brokerage firms and a registered investment advisory firm. He has served as Chairman of the Missouri Securities Industry Association from 1994 to 1996 and served as a FINRA arbitration panelist. Additionally, Jim was recognized by the St. Louis Business Journal as one of "40 Under 40″ in January of 1997, and was an Ernst & Young Entrepreneur of the Year finalist in 1999.
Jim is a graduate of The Harvard Business School OPM Program and The University of Missouri. Jim understands the importance of regulatory accounting, ethical selling practices, and the ongoing compliance that is required of individuals in the wealth management industry. Additionally, Jim servers as an expert consultant for investors of all types on securities related disputes involving sales practices, disclosures and suitability.
Jim has had economic and business commentary published by the Harvard Business Review, the St. Louis Post Dispatch, and the Show-Me Institute on such topics as Managerial Capitalism, Incentive Bonuses for State Employees and Free Speech.
Jim has held FINRA Series 4, 7, 24, 63 & 65 licenses.

A Black Rolls Royce and a Martini: Is the Stock Market Too High?

It seems like the world stock markets have been in high gear since the general election this past November. The S&P 500 has appreciated over 15% in just three months! We all know that the markets can move down just as easily as they move up. Over the years, there has been a remarkable amount of resources used in an attempt to predict the movements and direction of the markets. The problem with most of these predictive attempts is that they are mostly based on logic and mathematics.

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There Are No Angels Walking Around Down Here

No Angels When it Comes to the Fiduciary Standard

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You Only Live Once (YOLO)

Yolo the Wolf

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Trump & the Markets

TrumpFor better or worse, most of us felt the world change on the early morning of November 9th. Against all odds, Trump pulled off the biggest political upset in our life time.The world stock markets immediately dropped; in Europe the US Dow Jones Industrial Index lost over 900 points in two hours. This was a prime example of how the markets can behave and react to new information; not on anticipated information but on unanticipated and truly new information.

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Another Big Short?

The Big Short Book CoverLast night while browsing through our family’s Netflix account, I stumbled across a movie called “The Big Short,” the movie rendition of Michael Lewis’s bestselling book of the same name. As typical with our modern society, the film is laced with needless vulgarity but no nudity or violence. This movie is based on true events leading up to the collapse of the housing market, Bear Sterns and Lehman Brothers back in 2008, and how only a few investment managers had the foresight, guts and intelligence to figure out how to short (or to bet against) the housing market. For two years leading up to the 2008 financial crisis, these fund managers were wrong, dead wrong. Many of their clients and investors were bailing out on them because of their bet against the US housing market. This movie depicted how difficult it is for any fund manager to maintain their conviction when the market keeps moving to the contrary. It can be maddening!

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TD Ameritrade to Acquire Scottrade

October 24, 2016

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The Smartest Investment Managers in The World?

Ivy League SchoolsMany people believe that the smartest people in the world attend, teach and run the Ivy League Schools. The professionals running the mega endowments at Harvard, Princeton, Yale, etc. are some of the smartest and best investment managers. Unfortunately, for the fiscal year ending September 30th, the investment results are anything but remarkable.

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Inherited IRAs 101

Inherited IRAs 101

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The Wells Fargo Wagon Is a Comin’ Down The Street – Oh Please Let It Be for Me!


Wells Fargo Phantom Accounts FraudYesterday, John Stumpf, Chairman and CEO of Wells Fargo, was in the hot seat in front of the Senate Banking Committee. Stumpf had been championing “cross selling” at Wells Fargo with a goal to have every Wells Fargo client and customer to each have 8 accounts. This includes: credit cards, home equity loans, overdraft protection, identify theft programs, etc. Enormous pressure was put on junior employees to open up additional accounts to meet Mr. Stumpf’s objectives. The result? Millions of additional phantom accounts were fraudulently opened. Huge bonuses inured to top level executives; one lady who headed their “Community Banking” made over $100 million! That’s right $100 million! Wells Fargo gets fined, and Mr. Stumpf blames the practice on the 5,300 junior employees and fires them. No senior managers get fired, fined or punished. What’s even more bizarre is that John Stumpf won Fortune’s Magazine Best CEO Award just this past January. One Senator said that this is the first time that the Banking Committee has been in agreement on any issue. It is not often that I agree with Liz Warren, however watch her take Mr. Stumpf to the much deserved proverbial woodshed!

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Will the 2016 Elections Impact Your Portfolio?

Trump vs. Clinton Portfolio Implications

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Asset Class Performance YTD 2016

So far, the world capital markets have been completely different than they were last year. The table below shows the YTD outcomes of the different asset classes and a historical perspective. The big news recently was the Brexit vote that initially sent the world stock markets plunging and the gold and US bond markets surging. The whole world reacted wrongly and the equity markets reversed and rallied. The world was incorrect about wrongly anticipating that the “remain” vote would prevail. As always, the world markets lurch around unpredictably as unanticipated news comes pouring in from all over.

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Brexit - The Aftermath

Brexit - The AftermathLate Thursday there was a buying frenzy and the stock market surged on the polling data that was showing the Brexit vote was leaning in favor of the UK staying a member of the European Union. That sentiment quickly changed Thursday evening as the actual voting outcomes were showing that the UK was indeed exiting the EU. Then early today, with the Brexit certain, the global equity markets tumbled. But for precious metals and US Treasury bond most other asset class dropped as the Brexit results have triggered short term economic uncertainty. Of course, for the financial press, this news ignited all types of gloom and doom comments. Capital markets lurch up or down as a result of unpredictable news. Yesterday, the world market participants were predicting a NO vote on the Brexit and today we all found out that this prediction was wrong. In the days to come, there will be more unpredictable news causing more swings both up and down in the global capital markets. The one thing we know for sure is that markets tend to over react, and looking back, these types of negative news events have long term buying opportunities.

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Brexit For Dummies

Brexit for DummiesAs part of a campaign promise, Prime Minister David Cameron is compelled to have an up or down vote. This Thursday, June 23rd, the citizens of Great Britain (aka United Kingdom or “UK”) will vote on whether or not to stay a part of the European Union (EU). The press has termed this vote Brexit (short for British Exit). The idea for the EU began shortly after World War II to incentivize trade and discourage future wars between European nations. Now this EU is a formal partnership involving 28 European countries. The EU has its own parliament in Brussels and sets the rules and laws on broad ranging topics such as: the environment, transportation, immigration, consumer rights and even little things like regulating cell phone charges. The EU has its own currency, but only 19 of the 28 members use the European Dollar or Euro; the UK still issues Pound Sterling as their currency.

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Index Weightings and Methodologies

(a boring yet informative blog on investing)

Index Weightings and MethodologiesThe first stock index was published in 1896 when Charles Dow published the Dow Jones Industrial Average (DJIA). Mr. Dow was co-founder of Dow Jones and which began publishing the Wall Street Journal. The primary purpose of the DJIA was to sell more newspapers. Now with the newspaper industry in steep decline, the index industry has never been better. There are but a few nationally published newspapers while there are at least 476 various index funds available to the investing public. Index funds are like cookie recipes - they all have the same basic ingredients the difference being the varying ratios. You can have a cookie recipe with one cup of sugar or a half cup of sugar; the only thing for sure is the cookies will taste different, not necessarily better.

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Indy 500 v S&P 500: Similarities and Differences

indy 500This weekend is the 100th running of the Indianapolis 500. This is one sporting event that you need to attend at least once in your life. The engines are started every year at 11:00 AM on the Sunday before Memorial Day.

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SPAM or iPhone?

SPAM

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Place Your Bets for the 2016 Kentucky Derby

Bets for the 2016 Kentucky Derby

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Déjà Vu All Over Again?

Yogi Berra

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Should You Be Seeing Double?

Woman Seeing Double Stay DiversifiedBeing diversified does not mean owning different mutual funds. It means owning different securities inside the funds that you own. Besides the obvious and much lower cost, index funds are a better choice over mutual funds because it is easier to avoid overlapping holdings. Mutual funds may have different names but that does not mean they have different stocks or bonds.

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What’s in An Index Fund?

Index Funds

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