In case you’ve been living under a rock, the market is reeling from coronavirus. And I’m going to offer a rare glance at what three of our expert analysts are telling their subscribers. Read More
In case you’ve been living under a rock, the market is reeling from coronavirus. And I’m going to offer a rare glance at what three of our expert analysts are telling their subscribers. Read More
What a difference a year makes. The week leading up to Christmas 2018 was the worst for U.S. stocks since the 2008 crash. The market was already in turmoil when Treasury Secretary Steve Mnuchin sent out a bizarre tweet on Christmas Eve to say that he had spoken with the CEOs of the nation's six largest banks and was reassured that there were "no liquidity problems or margin issues." The statement was meant to pacify jittery investors but instead had the exact opposite effect. In what is normally a quiet day for the market, traders fled and sent the Dow… Read More
What a difference a year makes. The week leading up to Christmas 2018 was the worst for U.S. stocks since the 2008 crash. The market was already in turmoil when Treasury Secretary Steve Mnuchin sent out a bizarre tweet on Christmas Eve to say that he had spoken with the CEOs of the nation's six largest banks and was reassured that there were "no liquidity problems or margin issues." The statement was meant to pacify jittery investors but instead had the exact opposite effect. In what is normally a quiet day for the market, traders fled and sent the Dow tumbling 650 points. It was the worst Christmas Eve selloff on record. There was a nice bounce two days later, but the damage had been done. The Dow Jones finished the month with a painful 9% decline, the worst December performance since 1931 when the country was in the grip of the Great Depression. I didn't buy into the doom and gloom. Unlike in 1931, the underlying macro backdrop at the time was quite positive. The following week, I said that "this crisis feels more manufactured than real" and predicted we'd see "a recovery on the horizon once confidence returns."… Read More
Einstein called it “the most powerful force in the universe.” But you don’t need to be Einstein to understand why it’s has also been called an investor’s best friend — or to see how you can profit from it. The modern world’s most celebrated intellect was referring to the concept of compounding — the practice of earning money on what you have already earned. Fortunately, you don’t need to be an Einstein to understand why compounding has also been called an investor’s best friend — or to see how you can profit from it. Stop me if you’ve heard this… Read More
Einstein called it “the most powerful force in the universe.” But you don’t need to be Einstein to understand why it’s has also been called an investor’s best friend — or to see how you can profit from it. The modern world’s most celebrated intellect was referring to the concept of compounding — the practice of earning money on what you have already earned. Fortunately, you don’t need to be an Einstein to understand why compounding has also been called an investor’s best friend — or to see how you can profit from it. Stop me if you’ve heard this one: In ancient Greece there was a merchant — let’s call him Demetrios — who had a reputation as a savvy money-handler. An acquaintance brought over a wagon-load of drachmas (coins variously estimated to be worth about $0.19 apiece) and asked Demetrios to put the money in a trust and invest it for 2,000 years. Demetrios kept all of his acquaintance’s money as commission, save for a single 19-cent drachma, which he invested in an Athenian bond paying 3% annually. After 2,000 years of reinvesting the returns from the 3% payout, according to the math, that drachma would have grown… Read More
Here’s a bit of trivia… Did you know there are at least 79 different shoe sizes? There is even an International Organization for Standardization publication for footwear sizing explaining the conversion of sizing systems and how manufacturers should size their products. Shoes are obviously important, and that level of detail is certainly necessary. And, thanks to detailed formulas included in the standard, we can all be certain to find shoes that fit. I wish there was a similar publication explaining how to allocate positions in an investment portfolio. But, there’s not. There are some general guidelines. One is the 60/40… Read More
Here’s a bit of trivia… Did you know there are at least 79 different shoe sizes? There is even an International Organization for Standardization publication for footwear sizing explaining the conversion of sizing systems and how manufacturers should size their products. Shoes are obviously important, and that level of detail is certainly necessary. And, thanks to detailed formulas included in the standard, we can all be certain to find shoes that fit. I wish there was a similar publication explaining how to allocate positions in an investment portfolio. But, there’s not. There are some general guidelines. One is the 60/40 approach. This is when you allocate 60% of your portfolio to stocks and 40% to bonds. Another approach is to use your age. To determine the allocation using this method, subtract your age from 100 to determine the percentage of your portfolio that should be in stocks. So, a 20-year old would have 80% in stocks under this formula while an 80-year old would place just 20% of their portfolio in stocks. These guidelines are fine, but they don’t tell us very much. Among the things the formulas don’t tell us is how to generate income when interest rates fall… Read More
Interest rate policy can be boring. I’m reminded of this every six weeks as the Federal Reserve meets and Wall Street’s attention turns towards the Eccles Building in Washington, D.C. For years, CNBC has used the building as the backdrop for reporters when the Fed meets — as they were yesterday. Each time the Fed meets, traders anxiously wit to see what happens. Traders watch the news, largely consisting of a reporter standing in front of a building saying things like, “There’s a meeting going on inside.” Analysts will try to explain what members of the Fed were thinking at the meeting. Read More
Interest rate policy can be boring. I’m reminded of this every six weeks as the Federal Reserve meets and Wall Street’s attention turns towards the Eccles Building in Washington, D.C. For years, CNBC has used the building as the backdrop for reporters when the Fed meets — as they were yesterday. Each time the Fed meets, traders anxiously wit to see what happens. Traders watch the news, largely consisting of a reporter standing in front of a building saying things like, “There’s a meeting going on inside.” Analysts will try to explain what members of the Fed were thinking at the meeting. —Recommended Link— [TRENDING] Weird trade doubles your money in 3 days? This is going to be big… Jim fink just released the details of his 310F trade. This “Friday phenomenon” could generate returns of up to 100% or more… in the next 3-10 days… and continue to pay out… week after week. You can get in on the action now by following this link. The Fed’s thinking is nearly impossible to understand, but the Fed’s goals are relatively straightforward. The Fed operates under a mandate from Congress to “promote effectively the… Read More
I hope everyone came back from Thanksgiving feeling fresh and ready to rock and roll. While it’s always good to take a break and catch up with family and friends, I usually find myself ready to get cracking after a few days. The market certainly seemed to feel that way, too. After a couple of volatile days, conflicting reports on a potential trade deal between the U.S. and China, and the ongoing impeachment battle in Washington, the market capped off the week with a blowout jobs number. According to the Labor Department, 266,000 jobs were added to nonfarm payrolls in… Read More
I hope everyone came back from Thanksgiving feeling fresh and ready to rock and roll. While it’s always good to take a break and catch up with family and friends, I usually find myself ready to get cracking after a few days. The market certainly seemed to feel that way, too. After a couple of volatile days, conflicting reports on a potential trade deal between the U.S. and China, and the ongoing impeachment battle in Washington, the market capped off the week with a blowout jobs number. According to the Labor Department, 266,000 jobs were added to nonfarm payrolls in November, smashing the estimate of 187,000. This brought the unemployment rate down to 3.5%, from 3.6%. Speaking of catching up, I recently found myself shooting the breeze with StreetAuthority’s expert analyst Jimmy Butts. When Jimmy lived close to StreetAuthority HQ a couple of years ago, he and I made a regular practice of going to the local watering hole around the corner after work to talk about life, the market, and everything in between. And while it’s always good to have beer and wings with a friend, it’s even better to have a level-headed sounding board. That’s especially true… Read More
The big story last week was the Federal Reserve. The Fed meets every six weeks, and, for the third consecutive meeting, they cut rates. That’s the story. As investors, we need to dig behind the story and look at why the Fed cut rates. Interest rates are one of the Fed’s most important policy tools. They use interest rates to fine tune economic growth. This is based on the theory that excessive growth causes inflation while slow growth creates unemployment. In theory, the Fed tries to ensure interest rates are just right so that we see growth without high inflation… Read More
The big story last week was the Federal Reserve. The Fed meets every six weeks, and, for the third consecutive meeting, they cut rates. That’s the story. As investors, we need to dig behind the story and look at why the Fed cut rates. Interest rates are one of the Fed’s most important policy tools. They use interest rates to fine tune economic growth. This is based on the theory that excessive growth causes inflation while slow growth creates unemployment. In theory, the Fed tries to ensure interest rates are just right so that we see growth without high inflation or unemployment. Cutting rates generally means inflation is low and unemployment is rising. It’s the kind of situation we see before a recession. But this time is different. —Recommended Link— The safest stocks in America Like any other investor, I try to buy low and sell high… but the BIG difference with me is that I buy just one kind of stock. They sell a product that 152 million customers are virtually addicted to. And the kicker is: they are the only type of stocks mandated by law to make a profit. Read More