Stagflation: Inflation at 3.8%; Core Inflation at 2.0%; GDP 1.0%

Stagflation is stagnant economic growth with inflation. With rates for safe investments in treasuries, CDs and GNMA near record lows, inflation is tough on savers as it erodes the value of their savings.  The Federal Reserve is trying to encourage savers to take more risk but they continue to pour money into safe investments.  As the returns at the bottom of the page show, TIPS (Treasury Inflation Protected Securities) have been the clear winner for safe, fixed income investments this year.

Thursday, September 15, 2011
Consumer Price Index for August 2011

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad- based, with continuing increases in the indexes for gasoline, food, shelter, and apparel. The gasoline index rose for the 12th time in the last 14 months and led to a 1.2 percent increase in the energy index, while the food index rose 0.5 percent, its largest increase since March.

All items less food and energy up 2.0% year-over-year.  You can read the full release at http://www.bls.gov/news.release/cpi.nr0.htm

Kirk's Explore Portfolio TIPS as of 09/14/11

CUSIP	Value	Paid	Buy Date	Interest	$ Gain	% Gain
912828PP9	$34,548	$30,846	3/24/2011	$173.86	$3,876	12.6%
912828MF4	$35,641	$29,847	1/11/2010	$631.65	$6,426	21.5%

Vanguard Funds YTD as of 09/14/11:
click the links for a current price quote and performance graphs

• GNMA Fund Investor shares, VFIIX, up 6.68% YTD
• Total Bond Mkt Index shares, VBMFX, up 6.33% YTD
• TIPS: Inflation-Protect Securities fund, VIPSX, up 11.20% YTD

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Bob Brinker Moneytalk Summary for September 11, 2011

For a summary of this show, see:

• Moneytalk Summaries - September 11, 2011 MarketUpdate 

Key Topics include a Market Update, 9/11 Memorial, Gold, GNMA, Iraqi Dinar as an investment, Social Security and the Moneytalk Guest

Bob Brinker's Rules on Investing

Happy Labor Day Weekend!

We have TWO special treats for you this weekend:

1. Bob Brinker's Rules on Investing - Become Your Own Money Manger
   This is an article David Korn and I just finished that summarizes what we believe is the best of Brinker's advice on how to become your own personal finance manager.
   
   
2. FREE August 2011 Retirement Advisor Newsletter.
   
   • Visit our website and you can download the full issue FOR FREE.
   • No Strings.
   • No email addresses required.
   • Kirk's Two Investment Letters

Bob Brinker's Retirement Portfolio #3 vs Our The Retirement Advisor" Alternatives

David Korn and I started "The Retirement Advisor" in January 2007 partially because we believed people like Bob Brinker were recommending too much equity risk to their retired audience. Lets see how we've done.

Our "Balanced Model Portfolio #1" should be compared to Bob Brinker's "Balanced Model Portfolio #3" since both typically have 50% in equities.

Brinker's "balanced" Portfolio #3 on 1/1/07 was $197,794.

Brinker's "balanced" Portfolio #3 on 8/31/11 was $221,835, up 12.2%.

"The Retirement Advisor "balanced" Portfolio since 1/1/07 is up 19.1%, 57% higher than Brinker's balanced portfolio!

Even better, we thought there were "safer" ways to guard a portfolio against inflation (mostly using TIPS in place of equities) so we had two other "retirement portfolios" with less than 50% in equities.

Our two "safer portfolios are up 23.5% and 29.9% since 1/1/07! See Retirement Advisor Performance where we, unlike Brinker, are not afraid to show our returns by year.

The KEY for us is we believe people who have retired should look to maintain buying power over taking added risk to increase their standard of living. Brinker seems to target higher risk and volatility to advertise higher long term returns. We think OUR APPROACH IS BETTER but we know not all agree.

Make sure you read "Kirk's Two Investment Letters"