Despite all the algorithmic programs, high-powered computers, enormous capital and worldwide connections, what happens in the investment world sometimes comes down to a coin toss. The British vote next Thursday to stay or exit the European Community is shaping up to be one of those binary events.

Have you noticed that there are more and more of these kinds of events in the world?

Remember the U.S. government shutdown, the Greek Referendum, the TARP vote, the German bailout votes for Greece, the vote on Spanish austerity? These are just some of the either/or occasions that sent global markets up or down in double-digit moves.

If you listen to some of the big brokers, they are predicting as much as a 15 percent decline for the U.K. stock market (the FTSE 100) if a Brexit occurs. But if they stay, you could see as much as a 14 percent rise in the same index and an even larger rebound in the European markets. On the bright side of this contest, look at it this way: for once you have the same chance to be right (or wrong) on the outcome as the big guys.

By the way, remember my prediction that volatility was going to rise this summer? In less than two weeks the VIX, which is an index that measures volatility in the markets, has risen by 40 percent! Hang on to your seats, readers, because we still have until next Thursday before this soap opera plays out. However, while the world ignores everything else but the Brexit outcome,

I'm on to other things.

This week's FOMC meeting and Chairwoman Janet Yellen's press conference afterward really surprised me. Although the Fed always couches their words in financial speak, technical jargon and just plain poor English, in essence, the message I received was that further interest rate hikes are off the table at least for the foreseeable future.

Two weeks ago I predicted a June rate hike was a non-starter, but I still expected a hike sometime later, maybe July or September. While mumbling about global risks (Brexit) as a reason to delay any action, Yellen admitted that some of the economic forces that are holding back the economy and a rise in interest rates "may be long-lasting and secular."

Slower productivity growth, as well as the retiring Baby Boomers in this country and in other aging societies, who will spend less, and save more will drag down growth. Yellen said that these are "factors that are not going to be rapidly disappearing but will be part of the new normal."

These are arguments that former Treasury Secretary Larry Summers, who was in the running for Janet Yellen's job, have been arguing for some time. He believes industrial nations are caught in a swamp of secular stagnation where economic growth will be at best moderate.

If Summers, and now Yellen, are right in their assumptions (and both are a lot smarter than I), this change in outlook should have some predictable outcomes. For example, the U.S. dollar should trade in a range, or even fall at least until that time when a rise in U.S. interest rates is a real possibility. St. Louis Fed President Jim Bullard, a leading "hawk" on the Fed's board, said in a white paper today that low GDP growth (2 percent) and an even lower Fed funds rate will likely remain in place at least until to 2018.

It would seem to me, given past investor behavior, that this kind of environment will force more and more retiring Baby Boomers into the stock market in search of better yields and price appreciation. It augurs well for higher stock markets worldwide, since they will be the investment of last resort in an environment of secular stagnation.

However, the downside is that investors will need to temper their expectations of what they can expect from stocks. Single-digit returns will be the best we can get unless one wants to wander further afield to regions, countries and asset classes that may offer higher returns as well as risk. More on that later, but for now, if the UK does exit the EU, investors can expect a continuing high degree of turbulence within the markets.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

At this time next week the results of a United Kingdom referendum on whether or not to leave the European Union will be announced to the world.

The polls are too close to call and the odds are changing every day. For the past several days equity markets worldwide have been selling off in fear that the Brits will vote yes to a Brexit. Why so much angst over one country leaving the EU?

The obvious concern is that if one nation decides to leave, how many other nations will follow suit? And if they do, the chances that Europe's currency, the Euro, survives would be dicey at best. That's a big deal since it is the second-largest trading currency in the world after the U.S. dollar.

As the days grind on, the predictions of doom and gloom have escalated. As they do, investors have run for the hills. Even our Federal Reserve Bank has decided to postpone any interest rate hikes for the foreseeable future as a result of the uncertainty this event has generated.

The departure by Britain, the second-largest nation in the community after Germany, would deal an economic blow to one of the three largest regions on the globe. The EU can ill-afford that kind of downside since it has been struggling for years to climb back from the abyss created by the financial crisis of eight years ago. Despite herculean efforts by the European Central Bank to jump-start the region's economy, so far, the results have been mediocre at best.

Struggling countries such as Greece, Spain and Portugal, for example, have already expressed disappointment (and even outrage) at the treatment they have received by EU authorities. And more and more of Europe's citizens have grumbled about the viability of continuing in the EU.

The International Monetary Fund has warned that if the UK decides to exit, it could cause severe implications for their economy and that of the EU's other member countries. Other nations, including the U.S., have warned that an exit would create an entire basket of problems from defense to trade and immigration.

Clearly, there are pros and cons of exiting the EU for Britain. There is a perception among the English that the rewards for giving up some of their sovereignty to Brussels, the seat of EU power, have been found wanting. While the EU spews out mountains of new regulations, rules and guidelines per year, say the Exiters, the United Kingdom's representation on any vote is less than 10 percent of the total.

Most Brits have no idea how and what laws are concocted in Brussels, but they feel that more and more of this legislation favors the largest multinational organizations, while hamstringing their small and mid-size companies. The country's Chambers of Commerce state that the total cost of this EU regulation is about 7.6 billion pounds/year.

Immigration is also a big issue that concerns Britain. The massive exodus to Europe's shores over the last two years by refugees from the on-going strife in the Middle East has burdened the resources of almost all members of the EU. The UK and Germany, thanks to the strength of their economies, are prime targets for these new refugees looking to start a new life.

The results have been a huge increase in immigration with the UK now hosting 2.3 million workers from outside the EU.

Since the UK is an island nation where over 50 percent of goods and services produced and consumed are dependent on trade, leaving the tariff-free benefits of the EU could be a substantial negative. It could also create a substantial hit to jobs as well as investment in the country. Pro-EU campaigners warn that Britain could lose as many as 3 million jobs, which are linked to trade with the EU. Given that London is considered the financial center of the EU, there is also a great deal of concern that finance and investment will revert back to mainland Europe on any exit from the EU.

Like our own presidential elections, separating fact from fiction in the Brexit campaign is difficult at best. Clearly, there is a lot at stake for Europe and by implication, the rest of the world's financial markets. My own opinion is that the impact, at least on the UK, will be at best short-term in nature. If they decide to exit, however, Europe's future may be a different and on-going story.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Investors are scratching their heads in confusion. How can U.S. stocks, bonds, commodities and the dollar all go up at the same time? It flies in the face of historical relationships that have been around for years. Thank the central banks of the world for the present situation.

It all comes down to negative interest rates. This year, both European and Japanese central banks have instituted this tactic in an effort to jump-start their economies, weaken their currencies, and offer lending institutions a disincentive to hoarding cash, rather than lend it out.

So far, this strategy has had dismal results.

Foreign institutions have flocked to the American financial markets where in our bond market, for example, they can still get 1.6 percent on a 10-year U.S. Treasury Note, while in Germany or Japan, the same instrument is yielding below 0 percent. As a result, U.S. interest rates continue to drop and bond prices rise.

But that's not all. In the U.S. stock market the dividend yield on the S&P 500 Index is still 2.5 percent. To foreigners, that's a great deal and even bigger excuse to buy up American stocks.

At the same time, commodities, which are priced in U.S. dollars, are also attractive. Traders reason that if this whole negative interest rate thing ends up as a trigger for higher inflation, then what better place to be than in dollar-denominated commodities like gold, silver, etc. And so it goes.

The last two weeks in June is going to be important for global markets. Next Wednesday the Fed meets again to decide whether or not to hike interest rates. After last week's dismal employment gains, the betting is that the Fed will hold off until at least July or September (if then) before raising rates again.

A week later, on June 23 rd , the United Kingdom will decide to either remain within the European Union, or exit, going it alone. Those in favor of a "Brexit" point to Switzerland as an example of what could happen to the UK as an economically-independent country. The Swiss never became members of the EU. Their economy has been doing just fine and its currency, the Swiss Franc, is considered the safe-haven currency of Europe.

Readers should recall that the UK never accepted the Euro as their currency and has remained currency-independent for the last twenty years. Granted the tiny Swiss economy is not a fair comparison with the UK powerhouse, which is the second-largest member of the EU after Germany. As of the end of this week, the odds on a yes vote were 55 percent, while those who wanted to stay with the EU were only 45 percent of the populace. It is one reason the markets were down on Friday.

Sentiment among investors indicates that a "no exit" vote would be positive for markets, while the opposite would have a dire effect on both the UK and European markets. There could be a rush into gold, the dollar and even the U.S. stock market as a result.

In any case, I believe the U.S. markets have a chance of breaking through the old highs and making a minor new high this month. After that, we are probably due for a pullback because nothing goes straight up forever.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

There is quite a bit of worry over this year's presidential elections. Most of that angst centers on the possibility that Donald Trump might be elected to the office and that this could be a disaster for the stock market. If history is any guide, those concerns may be misplaced.

Granted, we haven't seen a candidate quite like the "Donald" in modern history. Some would like to point out that Ronald Reagan, a movie star best known for co-acting with a chimp, did not give many Americans a warm, fuzzy feeling either. Others say Reagan was a pillar of common sense compared to Trump. A President Hillary Clinton, on the other hand, would be a down right relief.

Supporters will argue that you can't take Trump at his word. His statements are merely negotiating positions that are not meant as policy, but simply bargaining chips with some of our foreign partners. That said, Trump, say his detractors, is unlike Reagan or anyone else who ran for office over the last 22 presidential election years. It does seem that he has the knack of piling one outrageous idea upon another.

Building a wall between Mexico and the United States, embargoing Muslims from entering the country, torturing terrorists' families, renegotiating NATO, our U.S. Treasury debt and our trade pacts, if implemented, could easily sink our stock market and those of pretty much every nation on Earth.

Now, I'm sure that if I look back through history, there have been plenty of outrageous statements articulated by candidates. Remember, during the Great Depression, for example, a whole raft of politicians were against any government interference in the economy at all.

Plenty more were dead-set against social security or public works, or any other attempt by American society to alleviate the plight of more than 25 percent of the population. Back then, "Let them eat cake" was not just a French attitude. Plenty of Americans had a similar attitude toward the poor and disenfranchised.

By the way, both parties' isolationist trade policy during the 1920s and 1930s make Trumps' view on trade down right dovish. We tend to forget (or hide) the fact that during WWII, this "just" nation incarcerated entire communities of citizens of Japanese descent behind barbed wire for years. In that context, some American politicians of the past would have had no problem building walls or excluding Muslims. We won't even go in to how our Heroes of the American West treated Native Americans.

Before you protest these examples, I know times have changed. Supposedly, we are living in an "enlightened" nation today. I just wonder how many of us are truly appalled by Trump's statements. From the polls, it appears that there are quite a few Americans who have yet to see the light. If so, then maybe this year won't be as bad as we fear.

If you look at the historical data, between the close of May and the close of October, the S&P 500 Index has rallied 19 of the last 22 election years. That's 86 percent of the time with an average gain of 6.2 percent. Those results, however, have been influenced greatly by just a few election years.

The financial crisis of 2008 (and an election year), saw the S&P Index fall by 31 percent. In 1932, the market gained 55.7 percent, only to give it all back when the Hoover presidency drove us deeper into the Depression. We also had two near 20 percent gains in 1936 and 1940 as well. If you accommodate for those outliers, we could lower the average gain per year to say 4 percent. In addition, volatility appears to be more pronounced during the months of July and August, which was almost 40  percent greater than across the 12-month span.

Although history rarely repeats, it does rhyme, and this election year should be no different. Regardless of who wins, there is a tendency by the electorate to become more hopeful once the elections are over. Wall Street and the markets usually catch that fever and will give the new president the benefit of the doubt until it doesn't. As such, the chances are that we should see a single-digit gain this year in stocks.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

The retirement world is changing. A long-sought-after regulation by the Department of Labor was released in April. It goes a long way toward protecting retirement savers from brokers and insurance agents. Here is what you need to know.

The new ruling insists that those who advise investors on appropriate investments for their IRAs, 401(k)s and other tax-deferred savings plans must put the client’s interest above their own and the company they work for. In short, they must act as a “fiduciary” rather than simply recommend “appropriate” investments.

You see, an “appropriate” investment for someone with little investment experience might be an annuity or a target retirement fund. The fact that these securities might also have a very high cost (called an expense fee) or perform poorly over time doesn’t matter. They are still an appropriate investment. Most investors do not realize that their broker buddy and his company take advantage of this. It is why he has a new car every year and a swimming pool while savers like you lose over $17 billion a year in unnecessary fees.  

Readers may recall that I have been on a crusade for the last nine years in my columns to change these abuses. Despite enormous protests from their friends in Congress, the DOL ruling is in effect now. Brokers and insurance agents have a year to become compliant with the new regulations.

So what does this mean for you as a saver? It should reduce the fees that you are charged in your retirement plan. Remember, that independent research has revealed that over a 25 year period of savings in these plans, fully a third of the assets is consumed by these fees and expenses.

In past columns, I have written that over a 25-year period of savings in these retirement plans, fully a third of a retiree’s assets are consumed by fees and expenses.The new ruling, plus a wave of successful lawsuits by disgruntled retirees against companies whose plans charge exorbitant fees, have plan sponsors rethinking their plan offerings. As company managements realize that they (and not the brokers who advise them) are on the hook in these large class action settlements, a new attitude is emerging. High-priced mutual funds are being replaced by exchange traded funds whose fees are a fraction of the costs and whose performance is better 85 percent of the time.

This is no secret. We have been investing our clients in these low-cost, better-performing ETFs for years. It is why we are fiduciaries and brokers are not. Now, retirement advisers and their firms are required to acknowledge their fiduciary status, enter into a contract with their clients, and explain investment fees and costs clearly. In addition, they must have policies and procedures in place to mitigate harmful effects brought about by conflicts of interest and keep certain data on their performance. It is what we have been doing for years and, in my opinion, it is the only fair and honest way to do business.

Now, realize that these brokers (turned fiduciaries) can still charge you commissions, revenue sharing and 12b-1 fees (a kick-back from mutual fund companies they are recommending). The difference is that now you need to sign a contract agreeing to all of the above.

If you can’t get a plain English explanation from that person sitting across from you in his silk tie and dark blue suit, say goodbye. You should expect and demand an explanation for every charge and fee that they are proposing and how it compares to the competition. There is absolutely no reason that you should agree to a revenue-sharing scheme or paying 12b-1 fees, in my opinion. If you have any questions on the topic, shoot me an e-mail or call at the numbers below. The onus is on you to make the right decisions.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.