Blog | JourneyTree Financial Planning & Investments

I-Bonds

February 28, 2022

Given the current low interest rates and record setting inflation, many investors are looking for different ways to earn interest on their more liquid assets. Enter the I bond. A relatively unheard-of Treasury Department offering, the I-Bond is unique in that it’s rate is based on a combination of “Fixed Rate” and “Inflation Rate” to come up with it’s “Composite Rate”. The current “Composite Rate” the bond is paying is a whopping 7.12% annualized. With any deal potentially this good,…

New Era for the Stock Market

February 28, 2022

Market Update

“No living investor has experienced a global pandemic or the extraordinary monetary and fiscal policies that have been deployed to keep economies afloat. Without a playbook in hand, investors should beware of assuming that trends in recent years will repeat in the future.” – Chris Hogbin, Alliance Bernstein The stock market rose to historic levels in 2021. By some counts, as many as 70 record highs were recorded during the year. Buoyed by rock bottom interest rates (making it cheap…

Money with an line chart and arrow over it

Inflation – Where are we Headed?

December 6, 2021

General, Uncategorized

Over the past four decades, inflation has been a non-issue. Until now. While hovering around 2% for decades, inflation rates jumped to 6.2% in October 2021. Higher than it has been for over 30 years. 10 – Year Inflation Rate The Investopedia website says, “Inflation is a decrease in the purchasing power of money, reflected in a general increase in the prices of goods and services in an economy.” Prices of goods and services have indeed been rising. Lumber prices…

Group of people wearing graduation gear and throwing graduation hats in the air

Student Loan Payments Resume

August 30, 2021

Financial Planning, General

It has been over three years since student loan payments were paused due to the pandemic. Now that the pause is coming to an end, here are a few key things to know if you or a loved one has a student loan: Interest begins accruing on 9/1/23. Payments resume in October. Your specific due date may vary depending on your service provider. Biden has proposed an “on ramp” transition period. During this 12-month period: Missed monthly payments will not…

Investing in a Sideways Market

August 30, 2021

Market Update

Today there are many signs that we are in an investment “bubble.” Michael Finke, Professor of Wealth Management at The American College of Financial Services defines a bubble this way: “A bubble occurs when the price of an asset inflates well beyond its fundamental value.” He goes on to say, “Bubbles often form when the imaginations of investors (speculators?) are inflamed by unrealistic expectations, sharp price increases, and fear of missing out.” These descriptions could well apply to everything from…

Book Review: The Psychology of Money – by Morgan Housel

May 20, 2021

General

Rare is the book that is at once wise and entertaining. The Psychology of Money is such a book. It is full of new perspectives about the modern world of finance. Its essays add greatly to our understanding of how to successfully negotiate our relationship with money. Housel writes in a clear and accessible style offering many fascinating stories to illustrate his points. The book consists of 20 brief chapters about a range of topics such as: Getting Wealthy vs.…

Is it Time for Inflation?

May 20, 2021

General

Those of us over a certain age may have a foggy memory of times when the prices of goods and services rose at a rapid and destabilizing pace. Inflation has ceased to be much of an issue for almost 40 years. The Federal Reserve Board, which sets the all-important Federal Funds rate on which most other interest rates are based, pushed that rate up to nearly 20 percent in 1980 to slow down the economy, ending the out-of-control inflation of…

woman shrugging, closing eyes, and crossing fingers

Is Successful Investing Mostly About Luck?

February 23, 2021

Investing

Here’s an interesting story of luck to ponder. The story of Bill Gates. Bill went to high school at Lakeside School, just outside Seattle, in 1968. At this time computers were not a common occurrence in schools, not even in colleges. However, one of the teachers at his school believed that book study wasn’t enough without real-world experience. He realized that kids would need to know something about computers when they went to college. So, he petitioned the Mothers’ Club…

Investing versus Speculating – The Tale of GameStop

February 23, 2021

Investing

The dramatic rise in the price of GameStop Corp. stock took the nation by storm in January. Beginning 2021 at a price of less than $20 a share it exploded to almost $350 by January 27. What accounted for the more than 1,500% increase? A frenzy of speculation (or gambling if you prefer). An unprecedented mixture of neophyte retail investors, newly available free trading, hedge funds shorting (betting against) overpriced GameStop shares then having to buy them back as…

The Great Disconnect

November 11, 2020

General, Market Update

“There really isn’t any doubt that financial markets remain broken and divorced from reality.” – David Rosenberg Rosenberg Research Economic Research for Informed Investing “Never before have I seen a market so highly valued in the face of overwhelming uncertainty…” – James Montier GMO Investments and Asset Management Stock Prices In early September the U.S. stock market (as measured by the S&P500) hit a new all-time high. Stock prices are now almost 11% higher than they were on January 1,…