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Be “CAUTIOUS” When Considering This Investment

Tuesday, July 23rd, 2024

Be “CAUTIOUS” When Considering This Investment

In previous “WIZ” DAILY JOURNALS, I’ve noted that many retirees who have plenty of money are reluctant to spend it due to “UNCERTAINITY” about their future expenses, investment returns and life expectancy.

Understandably, they are “AFRAID” of running out of money before they TRANSISTION (aka: die) and becoming a burden to someone.

Unfortunately, this “FEAR” keeps them from enjoying the “WEALTH” they spent a lifetime accumulating.

What might allow them to loosen the purse strings and live a fuller life???

An IMMEDIATE ANNUITY. It provides “GUARANTEED” income for life…

Please OVERSTAND/UNDERSTAND that I am NOT talking about a VARIABLE ANNUITY, one of the WORST investment choices you can make.


VARIABLE ANNUITY salesmen say,

“It’s like an IRA, offering tax-deferred compounding but with no investment limit. And you are guaranteed a lifetime of minimum withdrawals, no matter how long you live or how poorly the stock or bond market performs. No other investment product offers this combination of benefits.”

Sounds enticing… Who would argue against these great benefits???

Only those apprised of all the facts…

For starters, you really should not be plunking your hard-earned money into broker-sold investment “PRODUCTS”.


These are ideal for only one kind of person: the guy or gal who “SELLS” them.

VARIABLE ANNUITIES offer the HIGHEST SALES COMMISSIONS in the industry and – believe it or not – the SEC does NOT even require them to be disclosed in the prospectus.

Back when I was working on Wall Street, an ANNUITY salesman dropped by our morning meeting one day and hit us with this pitch…

“If your client puts $1 million into this annuity, we will pay you a $100,000 commission that day. Yet the annuity will still show up in his account as having a $1 million value. What’s more, your client can take the prospectus to a forensic accountant and he will never discover that you earned 10% on this sale. It’s not disclosed anywhere in the paperwork.”

Armed with this vital information, the brokers stampeded out of the meeting, got on the horn and began pitching this “INCREDIBLE” product.

While brokers generally do a bang-up job of summing up the “POSITIVES” of VARIABLE ANNUITIES (and each one is different), they either ignore or don’t fully OVERSTAND/UNDERSTAND all the NEGATIVES.

Let’s consider them here:



  1. 2.WITHDRAWALS prior to age 59 1/2 are generally subject to a 10% IRS PENALTY.


  1. 3.These are the most FEE-LADEN investment products in the financialAverage annual expenses are up to three (3) TIMES HIGHER than a typical MUTUAL FUND and up to 30 TIMES HIGHER than a typical VANGUARD INDEX FUND. This, of course, sharply REDUCES your future investment returns.


  1. 4.If you “CASH” in a VARIABLE ANNUITY, the IRS will tax your gains (if you have any) at your income tax rate rather than at the lower capital gains taxYour actual tax burden may be fairly low since the high annual fees will dramatically lower your long-term investment returns.


  1. 5.You can get most of the same tax-deferral benefits (at one-thirtieth of the cost) by simply buying and holding a VANGUARD EQUITY INDEX FUND or MUNICIPAL BONDOr you can “BUY” and “HOLD” individual stocks… So much for the BIG “TAX ADVANTAGE.”



  1. 6.If INFLATION stays HIGH, your FIXED ANNUITY PAYMENTS will LOSE their purchasing(Insurance agents will counter that some products allow policyholders to raise their annual payouts by 1% to 3% a year. BUT, that requires you to start with lower payments. There’s no free lunch!!!


  1. 7.Oh… and about that “PRINCIPAL GUARANTEE”. Your contract – contained in a prospectus up to 2 inches thick – will require you to hold the annuity for many years to realize thatIf you cash it in sooner for some reason, you will be hit with an additional fee – called a “SURRENDER PENALTY” – equal to up to 10% of your investment.


  1. 8.Even if you hang in there for years or decades, a “GUARANTEE” is only as “GOOD” as theOVERSTAND/UNDERSTAND that you are surrendering your principal to the insurance company immediately. And while your agent may boast about his company’s high rating from AM Best, it’s worth remembering that the world’s biggest insurance company, American International Group (AIG), imploded in the 2008 financial crisis and had to be bailed out by Uncle Sam.

How confident are you that your insurance company will be bailed out in the future???

Yes, there are state industry-backed GUARANTY ASSOCIATIONS, but they have LIMITS. In a major crisis, they may not cover your insurer’s insolvency.


So, yes, VARIABLE ANNUITIES offer certain “ADVANTAGES”. But, in virtually every case, they are swamped by all the “DRAWBACKS”!!!


Kenneth Reaves, Ph.D.

Investing in “COOLING” Technologies: Two (2) Top Stocks to Beat the Heat

Monday, July 22nd, 2024

Investing in “COOLING” Technologies: Two (2) Top Stocks to Beat the Heat



  • The “COOLING” technologies sector is experiencing sustained growth driven by rising global temperatures, urbanization, and increased demand for energy-efficient solutions.
  • YOU, ME, WE the ATWWI FAMILY members evaluating opportunities in this sector should consider a company's growth strategy, market position, financial metrics, and commitment to sustainability.
  • Strong first-quarter EARNINGS REPORTS (ERs) from major “COOLING” technologies companies suggest a robust market outlook and potential for continued growth.

As global temperatures RISE, so too does the demand for “COOLING” technologies. This demand creates a market for solutions that keep things “COOL”, encompassing everything from residential air conditioners to sophisticated commercial refrigeration systems. Beyond the seasonal demand spikes, the “COOLING” technologies sector, which is part of the INDUSTRIAL SECTOR, offers compelling long-term investment potential fueled by the relentless forces of climate change, increasing global energy consumption, and a growing emphasis on energy efficiency and sustainability.

Market Position and Share: LENNOX’ Dominance in North America

LENNOX INTERNATIONAL (LII) has a rich HIStory dating back to 1895 and is a global leader in energy-efficient climate control solutions. The company designs, manufactures, and markets a comprehensive range of residential and commercial heating, ventilation, air conditioning, and refrigeration (HVACR) equipment and related indoor air quality products. Lennox primarily serves the North American market and holds a strong market share.

CARRIER GLOBAL: A Global Leader with a Diversified Customer Base

CARRIER GLOBAL (CARR) is a globally recognized name in HVAC and refrigeration and is a leading provider of intelligent climate and energy solutions. The company boasts a comprehensive portfolio encompassing HVAC systems, refrigeration solutions, fire and security systems, and building automation systems, catering to worldwide residential, commercial, and industrial customers.

Carrier Global's stock price is around $68, representing a year-to-date performance of 12% and a one-year performance of 29%. The company holds a market capitalization of $57 billion, signifying its standing in the market. Carrier Global’s dividend yield is 1.20%, reflecting its commitment to return value to its shareholders.

Carrier Global’s EARNINGS REPORT (ER) for the first quarter of 2024 was positive, highlighting its diversified portfolio's strength and ability to navigate a challenging macroeconomic environment. The company achieved a 17% year-over-year increase in net sales, reaching $6.2 billion, driven by a combination of organic growth and strategic acquisitions. Carrier's adjusted operating margin expanded by 280 basis points, reaching 15%, primarily due to strong productivity gains. The company reaffirmed its full-year adjusted EPS guidance despite headwinds from planned business exits.

Evaluating the “COOLING” Technologies Market

The “COOLING” technologies sector is experiencing sustained growth due to several key factors.

Firstly, RISING global temperatures drive INCREASED demand for air conditioning and refrigeration systems, particularly in developing economies.

Secondly, rapid urbanization is significantly INCREASING demand for both commercial and residential cooling solutions.

Thirdly, growing awareness of climate change and the importance of energy efficiency is driving a shift toward adopting more efficient “COOLING” technologies. This trend is further amplified by government regulations and building codes mandating the use of such technologies.

Lastly, continuous innovation within the sector, including developing energy-efficient compressors, low-global-warming-potential refrigerants, and smart thermostats, propels growth and creates new investment opportunities.

ATWWI FAMILY MEMBERS seeking to capitalize on this growth should consider several key factors when evaluating potential investment opportunities.

GROWTH strategies should be assessed, including geographic expansion, product innovation, and acquisitions.

EVALUATING MARKETING POSITION, including market share, competitive positioning, and brand recognition, is crucial. A thorough analysis of key financial metrics, such as revenue growth, profitability margins, return on equity, and cash flow generation, is necessary.

COMPARING VALUATIONS using metrics such as price-to-earnings ratioprice-to-sales ratio, and dividend yield will help YOU, ME, WE the ATWWI FAMILY determine if a company's stock is overvalued or undervalued.

Finally, given the sector's connection to climate change, YOU, ME, WE the ATWWI FAMILY should carefully consider each company's environmental, social, and governance (ESG) practices and their commitment to sustainability.


Kenneth Reaves, Ph.D.

Signs of the 18.6-YEAR REAL ESTATE CYCLE Are Everywhere

Monday, July 15th, 2024

Signs of the 18.6-YEAR REAL ESTATE CYCLE Are Everywhere

The “MARKET” tells you everything to know…

BUT, you need to have the right “PERSPECTIVE”.

Reading ”TEA LEAVES” and listening to “MAINSTREAM MEDIA” is one way to invest… but it’s not the best way.

I have been there, I tried…

I got NOWHERE!!!

I began to analyze the “MARKET’s” HIStory and discovered that the “MARKET” has a very definitive “CYCLES” that it adheres to.

One such “CYCLE” is the 18.6 YEAR REAL ESTATE CYCLE that has been driving the economy and the markets for years.

It drove markets to their “PEAKS” and “VALLEYS” and now we are in the “ELEVENTH HOUR” stage of a 18.6. YEAR REAL ESTATE CYCLE.

Here’s what it means…

The “ELEVENTH HOUR” stage is about RECORDS.

Multi-decade and all-time highs across almost every market and asset class has occurred.

And now we are seeing this…

US EQUITIES are hitting “RECORD HIGHS” as TECH STOCKS continue to generate impressive “GAINS”.

At this stage of the 18.6-year REAL ESTATE CYCLE, markets “GROW”, but some companies “GROW” even FASTER.

They break their own records to become MULTI-TRILLION DOLLAR “BEHEMOTHS”!!!

Here’s the latest one:

Nvidia (NVDA) surpasses Apple (AAPL) to become the 2nd-most-valuable company in the world

  • NVDA is now the second-most-valuable company in the world.
  • The ongoing AI boom has helped catapult NVDA’s market valuation to $3.014 trillion.
  • Now bigger than AAPL, AI-chip maker is just behind Microsoft (MSFT) as the world’s biggest company.

Note that the companies that grow the fastest tend to be part of the latest “CRAZE”. In this case, it’s ARTIFICIAL INTELLIGENCE (AI).

YES, the technology that NVDA’s chips power is important. BUT, the “CRAZE” about AI drives companies like NVDA to “ALL_TIME HIGHS” with a force you don’t see often.

AND.. that is a sign that we are in the “ELEVENTH HOUR” stage.

What’s Next???

Well, it would be easy to say that everything goes up… BUT it does NOT!!!

This is where my knowledge of the 18.6-year real estate cycle meets my own investing experience.

Even though most assets go up during the “ELEVENTH HOUR”, not everything does…

This is why I NEVER tell ATWWI FAMILY MEMBERS to just “BUY” the “MARKET”.

You need to be “CAUTIOUS” and do your ATWWI “DRILL DOWN”…

Especially when nobody else is/does!!!

There is the right way to get “P.A.ID” during the “ELEVENTH HOUR”… but almost nobody knows about it.

They just pile into the latest “CRAZE” – be it CRYPTO, AI-related companies, or other things that they don’t OVERSTAND/UNDERSTAND but hear about from mainstream media and even their friends.


Otherwise, you will do what everybody else does…


BUT, by utilizing our ATWWI “DRILL DOWN”, I have been able to MONETIZE the market for years. It’s allowed me to INCREASE my WEALTH in an “INCREDIBLE” way.

NOW, my UNIVERSAL ASSIGMENT (aka: mission) is to help ATWWI FAMILY MEMBERS do the same.

Kenneth Reaves, Ph.D.

The American “PARADOX”: Cooling Inflation, Rising Markets, Unhappy Citizens

Thursday, July 11th, 2024

The American “PARADOX”: Cooling Inflation, Rising Markets, Unhappy Citizens

Bottom of Form

The U.S. boasts the strongest economy among developed countries, with an unemployment rate that hovers at 55-year lows. But as my “BELOVED” GRANDMOTHER used to say: “There iss no pleasing some people.”

The American public has shown an unyielding “GRUMPINESS” about the economy. On closer examination, a more “CHEERFUL” reality emerges.

NFLATION is “COOLING”, the FED is dusting off its INTEREST RATE SCISSORS and the U.S. economy is reaching a “NORMALIZED” stride.

This confluence of “POSITIVE” indicators should have YOU, ME, WE the ATWWI FAMILY questioning why everyone’s still “SULKING”. Spend a few minutes watching the relentless “NEGATIVITY” on cable news and you will get an inkling.

However, although opinion polls consistently reveal widespread “UNHAPPINESS” among the electorate, the economy is “STRONG” and the stock market is primed to extend its “BULL” RUN…

My “BELOVED” GRANDMOTHER raised during the “GREAT DEPRESSION”. During the height of the 1930s DEPRESSSION, the unemployment rate peaked at 25%!!!

During the 1981–1982 “RECESSION”, the unemployment rate peaked at 10.8%!!!

During the “GREAT RECESSION” of 2007-2008, the rate peaked at 9.5%!!!

During the “CORONAVIRUS EPIDEMIC” of 2020-2021, the rate peaked at 13%!!!

As of June 2024, the “SEASONALLY ADJUSTED” UNEMPLOYMENT RATE in the United States was 4.1%... AND yet, I still hear politicians and their partisan shills in the media say that the U.S. jobs market is in the “TOILET” and the economy is going to “HELL”.


But as rock poet JIM MORRISON said in 1969: “Whoever controls the media, controls the mind.”

In some quarters, reality is breaking through and the gloom is lifting. Let’s start with small business. It’s a truism that small companies form the heart of the country’s job creation. “MAIN STREET is starting to catch up to the “OPTIMISM” of “WALL STREET”.

The NFIB Small Business Index, released Tuesday, July 10th, 2024 climbed to 91.5 in June (2024, marking its highest point this year. We’re seeing a gradual recovery in small-business sentiment (see chart).

In parallel, FED CHAIR JEROME POWELL addressed the SENATE BANKING COMMITTEE on Tuesday, July 10th, 2024, striking an “ACCOMMODATIVE” tone but nonetheless reinforcing the need for continued POSITIVE INFLATION DATA BEFORE CONSIDERING RATE CUTS.

Then, POWELL testified before the HOUSE yesterday, Wednesday, July 11th, 2024, where he reiterated the need for the central bank to adhere to its “DUAL MANDATE”. There were no surprises in his remarks on Capitol Hill.

The FED’s “DUAL MANDATE”, which aims to achieve both STABLE PRICES and MAXIMUM EMPLOYMENT, requires a delicate balancing act. Powell’s testimony this week has underscored the FED’s “CAUTIOUS” approach.

Although INFLATION is showing “SIGNS” of easing, the central bank remains vigilant. With CONSUMER PRICE INDEX (CPI) INFLATION DATA for June (2024) expected to show a modest 0.1% monthly INCREASE and a 3.1% year-over-year RISE, the market anticipates a gradual DECLINE in INFLATION.

Core CPI, which excludes volatile FOOD and ENERGY prices, is forecasted to INCREASE by 0.2% for the month, holding steady at 3.4% annually. After experiencing higher-than-expected INFLATION early in the year (2024), recent data suggests a DOWNWARD trend.

The 3.4% year-over-year INCREASE in May’s (2024) core CPI was the LOWEST since April 2021, hinting at “EASING” INFLATIONARY PRESSURES. Consequently, market expectations are now tilting towards two (2) potential interest rate cuts by the FED in 2024, possibly starting in September (2024). However, as POWELL has made clear on Capitol Hill, the FED’s decision hinges on CONTINUED MODERATION IN INFLATION…

Meanwhile, the stock market is enjoying a boost driven by the fervor surrounding ARTIFICIAL INTELLIGENCE (AI).

Chip-maker Nvidia (NVDA), a leading player in the AI industry, has been a SIGNIFICANT catalyst for this surge.

The S&P 500, buoyed by AI optimism, has seen impressive GAINS, with the index RISING about 16% in the first half of the year (2024). This marks the third-best start to a year since 1999. HIStorical data suggests that when stocks gain over 15% in the first half of the year, they tend to perform well in the second half of the year.

While past performance doesn’t guarantee future results, this HIStorical pattern provides a POSITIVE outlook for YOU, ME, WE the ATWWI FAMILY as we navigate the rest of 2024.

My GRANDMOTHER was no “POLLYANNA”, but she knew the difference between real “SUFFERING” and “WHINING”. Under current conditions, YOU, ME, WE the ATWWI FAMILY have little to “WHINE” about.


Kenneth Reaves, Ph.D.


Wednesday, July 10th, 2024


I was recently reading an old copy of the 100th Anniversary Issue of FORBES.

It featured brief essays from “The 100 Greatest Business Minds,” including individuals like RUPERT MURDOCH, OPRAH WINFREY, PAUL McCARTNEY and ASIAN BILLIONAIRE LI KA-SHING.

These men and women went out of their way to emphasize that successful businesses thrive NOT because of GREED or SELFISHNESS but because they HELP millions achieve their DREAMS.

U2 singer BONO said, “It’s just foolishness not to recognize the creativity you can unlock in the corporate world.”

He added, “Some of the most selfish people I’ve met are artists – I’m one of them – and some of the most selfless people I’ve met are in business, people like WARREN BUFFETT. So, I’ve never had that clichéd view of commerce and culture being different.”

Microsoft (MSFT) founder BILL GATES pointed out that businesses underwrite many thousands of ideas that don’t work out – but the handful that do “REVOLUTIONIZE” our world.

Master “DEALMAKER” and SoftBank founder MASAYOSHI SON said the “INDUSTRIAL REVOLUTION” transformed people’s lives, but our current “INFORMATION REVOLUTION” is creating a sort of “WORLDWIDE SUPERINTELLIGENCE” that will make ENORMOUS contributions to humanity in ways that can’t even be imagined.

BILLIONAIRE JOHN PAUL DeJORIA said that one of the biggest business challenges is to retain talented employees. The best business managers “TREAT” and pay their staff EXACTLY the way that they would want to be “TREATED” themselves.

Taiwan Semiconductor (TSM) founder MORRIS CHANG wrote that business success is the result of building “TRUST” with customers by being willing to fulfill a “PROMISE”, even at high cost – and that this boils down to “INTEGRITY” and “COMMITMENT”.

JACQUELINE NOVOGRATZ, founder of Acumen, said that successful entrepreneurs don’t worry about “REPUTATION”. They focus on “CHARACTER”.

(“REPUTATION” is what people THINK you are… BUT, “CHARACTER” is what you REALLY are.)

Berkshire Hathaway chairman WARREN BUFFETT advised, “Don’t just satisfy your customers – delight them. They are gonna talk to other people. They’re going to come back. Anybody who has happy customers is likely to have a pretty good future.”

JEFF BEZOS, the founder of Amazon (perhaps the world’s most customer-centric company), further amplified this message by pointing out that the internet has created a new era of product “TRANSPARENCY”.

CONSUMERS now share their LIKES (and DISLIKES) so broadly and rapidly on social media that there is far GREATER opportunity for a GREAT product or service to achieve widespread adoption and far less opportunity for a “SHODDY” one to succeed.

These entrepreneurs and business “VISIONARIES” are all “PROVEYORS” of the FREE-MARKET system.

They OVERSTAND/UNDERSTAND that business drives innovation, creates jobs, provides billions in tax revenue, improves society’s quality of life and elevates society’s standard of living.

The STOCK MARKET is the “DEMOCRATIZATION” of CAPITAL, allowing ordinary men and women of “MODEST” means to own a FRACTIONAL INTEREST in a thriving company – or a whole portfolio full of them – or find the money necessary to bring a good idea to fruition.

YOU, ME, WE the ATWWI FAMILY should not forget these things. Or let others succeed in undermining the ENGINE OF PROGRESS AND PROSPERITY that get’s us “P.A.I.D.”

Progress that they either can’t SEE… or don’t OVERSTAND/UNDERSTAND.

Kenneth Reaves, Ph.D.

The Ask The Wiz Wealth Institute is not an investment advisor. We strive to be educational and informative community servants.

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