Investing

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MARKET UPDATE: WHAT HAPPENS NOW?

Before last year started, roughly 85% of economists were confident that the U.S. would have a recession in 2023. We didn’t. It is still not clear if or when we will have one. Virtually every other time that interest rates have risen as much as they did in 2022 and 2023 a decline in economic growth has occurred. What was different this time? What many economists did not factor in was the size and impact of the unprecedented government stimulus…

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WHY TO INVEST IN U.S. TREASURY BONDS

For most of the last 15 years, savers have been penalized. In the aftermath of the global financial crisis in 2008, interest rates have been kept near 0% more than 60% of the time. This has meant that money market funds, bank accounts, Certificates of Deposit, and many types of bonds paid little or NO interest for several years. Circumstances have dramatically changed since the beginning of 2022. To bring down inflation, interest rates have been rising steadily. Once all…

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WHERE IS THE RECESSION?

With interest rates rising rapidly last autumn, calls for an imminent recession were widespread. But, here we are nearly a year later, and there are few signs of a temporary decrease in economic activity on the horizon. Why Are We Not in a Recession Yet? Expectations of a recession were everywhere roughly a year ago based on historical circumstances. In virtually every instance when short term rates have exceeded long term rates for a considerable period, a recession has followed…

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6 MONEY MISTAKES THAT COULD COST YOU

Are you tired of being worried that you’re making mistakes when it comes to your money? Are you feeling confused about where best to stash your dollars? In this guide, we will unveil the top 6 damaging money mistakes you’ll want to avoid. From overspending, to saving for the wrong reasons, we’ll explore the common pitfalls we have seen over the years as financial advisors and provide you with practical tips on how to avoid these costly errors. Whether you’re…

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Silver & Gold Coins & Clock

I-Bonds

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,…

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Is Successful Investing Mostly About Luck?

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…

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Investing versus Speculating – The Tale of GameStop

  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…

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An Unconventional Approach

A widely held belief in both academia and the investment industry is that a person should have as much of their money in stocks as they can tolerate because stocks have provided the highest returns over long periods of time. Most people cannot handle the erratic volatility of an all stock portfolio so many advisors say “let’s do 60% in stocks and 40% in bonds” in order to make things a bit more palatable. “60/40” has come to be the…

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Market Commentary – August 2018

Year to date, US stocks (S & P 500) are up a little under 7%, Real Estate Investment Trusts are up 1%, while US bonds and international stocks are down .84% and 4.52% respectively. YTD The American economy seems to be holding up well as evidenced by much higher corporate profits and lower unemployment. However, the price of many stocks is still elevated and have gotten ahead of earnings.  What is more, there are a number of potential concerns lurking…

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FAQs

Why do rising interest rates negatively affect bonds? Sam has a bond paying a 2% coupon. The Fed raises rates to 3% and suddenly, Sam’s bond is not as attractive, so the price of his bond drops to reflect the new yields. Along comes Bob – he can now either buy the new 3% bond, or buy Sam’s 2% bond but at a discount to ultimately yield 3%.

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