2025-04-17
Recent consumer sentiment readings have been horrendous. For instance, the University of Michigan’s latest consumer expectations and the Conference Board’s consumer confidence index are at or near their lowest levels in ten years. However, despite poor sentiment and concerning outlooks, recent consumer spending reports show increased spending. We, and many economists, believe this is a …
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Social Security plays a crucial role in retirement income planning. Making informed decisions about when and how to claim benefits can maximize your Social Security benefits and significantly impact your long-term financial security. Claiming Social Security wisely requires a deep understanding of how benefits are calculated, the impact of different claiming ages, and the strategies …
Read More »2025-04-16
The chart below, courtesy of JP Morgan Asset Management, highlights how much the US relies on certain rare earth metal imports from China and other nations. It also lists some of the products the metals are needed for. As the chart shows, imports play a critical role in securing our rare earth metal needs. Furthermore, …
Read More »2025-04-15
Despite, or actually because of, the recent market turmoil, many large banks and brokers reported better-than-expected earnings. Market volatility provided a nice boost to trading revenue, which helped offset weakness in other business lines. Goldman Sachs, reporting earnings on Monday, said their equity trading revenue rose 27% from the prior quarter. JP Morgan and Morgan …
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Market volatility is an inevitable part of investing. While short-term fluctuations can create uncertainty, a well-structured portfolio can help protect investments from volatility and ensure long-term financial stability. Managing market fluctuations requires a disciplined approach that includes diversification, asset allocation, and risk management techniques. In this guide, we’ll explore why markets fluctuate, how investors can …
Read More »2025-04-14
Recently, we have seen claims that the “collapsing” dollar will cause inflation. While a weaker dollar can create inflation, many factors impact prices. Accordingly, we have two issues with such dire statements. First, the dollar is not collapsing. Second, we have experienced much more significant dollar declines without an inflationary impulse. The dollar has fallen …
Read More »2025-04-11
The S&P 500 surged 8.5% off its lows on Wednesday as the administration announced a 90-day tariff pause for all countries except China. Sound familiar? In Tuesday’s Commentary, we wrote: For those of you with bearish nightmares, we share one important takeaway from Monday’s market roller coaster. While there is a good chance the market …
Read More »2025-04-10
What is up with the bond market? Many rumors are floating around. For instance, some claim China is selling Treasury bonds in retaliation for increased tariffs. Another rumor claims the bond market is besieged by investors raising money for equity margin calls. While both are plausible, negative interest rate swap spreads point to liquidity problems. …
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For investors looking to reduce tax liability while keeping their portfolios optimized for growth, a tax-loss harvesting strategy can be a valuable tool. By strategically selling underperforming investments to offset capital gains, investors can minimize their tax burden and improve their after-tax returns. Understanding how tax-loss harvesting works, when to apply it, and how it …
Read More »2025-04-09
For those of you with bearish nightmares, we share one important takeaway from Monday’s market roller coaster. While there is a good chance the market may explore new lows over the coming months, we must appreciate that there is plenty of fuel for a sizeable bounce. The one piece of important evidence supporting this thesis …
Read More »2025-04-08
Achieving financial independence and early retirement is a goal for many, but it requires strategic planning, disciplined saving, and careful investing. The idea of retiring early—whether in your 50s, 40s, or even 30s—means building a solid financial foundation that allows you to step away from traditional employment without worrying about running out of money. Early …
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Is a recession coming? That is the billion-dollar question investors now face. One gauge to help us answer the question is corporate bond yield spreads. When the yield differential between corporate bond yields and risk-free Treasury bonds widens significantly, it signals that bond investors are taking a risk-averse stance. Simply, they are pricing higher odds …
Read More »2025-04-07
While stagflation fears grip the market and make headlines, the bond market appears more concerned about ‘stag than ‘flation. Stagflation describes sluggish economic activity or a recession coupled with higher prices and rising unemployment. The ‘stag’ refers to a stagnant economy, while the ‘flation’ is inflation. Please read our article, Stagflation Panic: A Misdiagnosed Media Spin, …
Read More »2025-04-04
Heading into April 2nd, investors were under the impression that Trump’s goal was to set tariff rates that allow for fair trade with other nations. Trade impediments like tariffs, taxes, VATs, currency manipulation, and other methods that don’t allow for fair trade would be offset with tariffs. More simply, Trump would level the playing field. …
Read More »2025-04-03
Estate planning is one of the most important yet often overlooked aspects of financial management. Without a comprehensive plan in place, your wealth and assets may not be distributed as intended, leading to unnecessary tax burdens, family disputes, or legal complications. Proper estate planning ensures that your legacy is protected, your family is financially secure, …
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Over the past few weeks, we have discussed the sharp jump in the trade deficit due to a surge of imports trying to front-run potential tariffs. Thus far, the impact of front-running tariffs on economic data has only been significant in consumer and corporate surveys and the aforementioned trade deficit. That was until Tuesday. The …
Read More »2025-04-02
Yesterday’s Commentary discussed the vast divergence in the economic sentiment of Democrats versus Republicans. In the piece, we wrote: “Democrats think today’s economic outlook is worse than during the peak of Covid and the financial crisis of 2008. Sentiment is tricky to convert into an economic forecast. Sometimes, sentiment is bad, but consumers continue to …
Read More »2025-04-01
Stocks are hitting the skids as April 2nd, or Liberation Day, quickly approaches. Investors are rightfully scared that tariffs announced on Liberation Day will be crippling to the economy and harm corporate earnings. Based on recent comments from Donald Trump, that is a logical concern. However, what if Trump is playing with emotions to make …
Read More »2025-03-31
It wasn’t that long ago that used car prices were soaring as the production of new cars was crimped due to Covid-related supply line shortages. Since then, used car prices have stabilized as the supply lines have healed. However, like many goods, prices haven’t retreated to pre-pandemic levels. As we wrote in yesterday’s Commentary, the …
Read More »2025-03-28
Despite what some may think, the impact of the new 25% auto tariffs will not necessarily benefit all US auto companies to the detriment of their foreign counterparts. For example, as we share below courtesy of Bank of America, Ford produces about 80% of their US-sold cars in the US. However, GM and Stellantis, the …
Read More »2025-03-27
Ben Bernanke popularized the wealth effect theory during the financial crisis in 2008. In his words, “higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.” Moreover, he argued this would create a “virtuous circle” of increased spending, higher incomes, and further economic growth. Since then, the Fed has …
Read More »2025-03-24
The key to lower inflation may start with the stock market and feed into the economy rather than vice versa. The wealth effect describes the behavioral phenomenon where individuals’ perceived wealth changes impact their spending decisions.
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Planning for retirement is about more than just saving—it’s about ensuring a steady income stream that lasts throughout your retirement years. Without a well-structured plan, you could risk outliving your savings or facing financial hardship due to inflation, taxes, or unexpected expenses. This guide will walk you through retirement income strategies to help you achieve sustainable retirement income while balancing withdrawals, taxes, and long-term financial security.
Read More »2025-03-21
Within the headline retail sales figure is a lesser-followed data point called the retail sales control group. Following the trend of both figures is important because although the headline figure receives more attention, the control group is the measure that feeds into the GDP calculation.
Read More »2025-03-20
Building a secure retirement requires a reliable stream of income that can support your lifestyle without depleting your savings too quickly. A dividend investing strategy offers a way to generate passive income in retirement, providing consistent cash flow while preserving capital. In this article, we’ll explore how dividend-paying stocks can help retirees create sustainable income, …
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As the market widely expected, the FOMC left the Fed Funds rate unchanged. However, the statement summarizing the meeting now includes an economic growth warning- “uncertainty around the economic outlook has increased.” Moreover, they are reducing the amount of monthly QT. The roll-off of Treasury securities will fall to only $5 billion monthly, down from …
Read More »2025-03-19
The old saying that the bark is worse than the bite is a good description of the current state of the stock market and investors’ sentiment. The following quote from a recent Commentary and our most recent article (summarized and linked below) point to the unusually poor sentiment. The AAII retail investor survey is now …
Read More »2025-03-18
In our Commentary last week, we noted that Delta shares were down over ten percent due to their weak economic outlook. Per our Commentary- “Delta’s CEO offered similar caution: The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in Domestic demand. He also …
Read More »2025-03-17
Planning for retirement requires careful preparation and smart financial decisions. However, many retirees make critical errors that can drain their savings, reduce their income, and leave them financially vulnerable. Avoiding financial pitfalls is essential to ensuring a comfortable and stress-free retirement. Here’s a look at some of the most common retirement planning mistakes and how …
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As we have mentioned numerous times, consumer sentiment greatly impacts economic activity. Accordingly, the price activity of particular goods can have an outsized influence on consumer inflation views. For example, orange juice and egg prices have been leading some consumers to have flashbacks of the recent high inflation. Based on the recent price trends of …
Read More »2025-03-14
In hindsight, markets are easy to assess, yet extremely challenging to forecast. For example, as we will show, it’s undeniable that value, particularly large-cap value stocks, have been in vogue during the recent decline, while growth is being kicked to the curb. This rotation from growth to value is an example of how investors rotate …
Read More »2025-03-13
Following a hot January CPI set of inflation data, the BLS CPI report cooled down in February. Headline CPI rose +0.2% versus +0.3% consensus and +0.5% in January. Core CPI was also +0.2% for the month. The year-over-year headline and core rates fell 0.2% from last month’s figures to 2.8% and 3.1%. The 3.1% core …
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A well-structured asset allocation strategy is the foundation of a resilient investment portfolio. It determines how your investments are distributed across different asset classes, balancing risk and return to align with your financial goals. Proper asset allocation can help you navigate market fluctuations, protect wealth, and optimize long-term performance. In this article, we’ll explore the …
Read More »2025-03-12
The rally over the last two years has helped investors forget that markets also go down. After two +20% consecutive years, a sudden 8% drop from recent highs has investors panicking. Bear in mind, no pun intended, that the S&P 500 is only down 4% for 2025. Consider the graph below. It shows that the …
Read More »2025-02-28
The American Association of Individual Investors (AAII) sentiment indicator claims that 60.6% of the retail investors are bearish. The percentage of bears in its survey increased sharply from 40.5% at the prior reading on February 19. The AAII retail investor survey is now the most bearish it has been since September 2022. More stunning, this …
Read More »2025-02-27
Required Minimum Distributions (RMDs) are an essential part of managing your retirement accounts and income in retirement. While they provide a way to access your savings, RMDs can have significant tax implications if not handled properly. Understanding how RMDs work, which accounts they affect, and strategies to minimize their tax impact can help you optimize …
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Consumer Confidence, as surveyed by the Conference Board and University of Michigan, shows consumers are starting to lose economic confidence. Given that consumer spending drives the economy and influences inflation, confidence and the means to spend can significantly impact markets. Based on recent job data, the means (i.e., wages) to consume appear to be in …
Read More »2025-02-26
During Donald Trump’s first term, some investors bought into the Trump 1.0 Put. The trade was based on the market’s belief that Trump believed the stock market’s performance was a referendum on his presidency. Accordingly, investors thought that Trump would do everything he could to backstop the stock market if it fell. Thus, some investors …
Read More »2025-02-25
In its annual letter to shareholders this past weekend, Warren Buffett’s Berkshire Hathaway announced that it had increased its cash holdings to $334 billion. As the Financial Times chart on the right shows, Berkshire’s cash balances have more than doubled over the last few quarters to its highest level. Additionally, cash as a percentage of …
Read More »2025-02-24
The coming unprecedented government job cuts will undoubtedly impact the job market. Given the labor market’s importance to Fed policy and the economy, it’s worth fully appreciating the size of the government workforce and other employees whose jobs might be affected. The following graph, courtesy of John Burns Research & Consulting, shows that 3.8 million …
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Real estate has long been considered a valuable investment option due to its potential for steady income, appreciation, and diversification benefits. For individuals planning for retirement, incorporating real estate retirement investments into a financial strategy can enhance income streams, hedge against inflation, and provide long-term stability. However, like any investment, it comes with risks and …
Read More »2025-02-21
The ETF industry has undoubtedly gotten creative over the last few years. However, nothing tops the latest ETF proposed by Tuttle Capital. Per its SEC registration, the Tuttle Capital UFO Disclosure AI Powered ETF (UFOD) will purportedly invest over 80% of the fund’s assets in companies that they believe “have potential exposure to advanced or …
Read More »2025-02-20
Wages and rents were two of the most impactful factors driving higher inflation and, of recent importance, keeping it stubbornly above the Fed’s 2% target. As we will share, the good news is that wage growth and rents should be easing. The graph on the right shows that the Atlanta Fed wage growth tracker is …
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Social Security benefits are a cornerstone of retirement income for many Americans, but the amount you receive can vary significantly based on when and how you claim. Understanding the factors that affect your benefits and implementing strategies to maximize them is essential for optimizing retirement income and securing financial stability during your golden years. 1. …
Read More »2025-02-19
To appreciate the recent gold price surge, we discuss three critical factors. Money Supply—The chart below shows that the ratio of gold to the money supply (M2) and the money supply tend to follow each other, albeit gold prices are more volatile. The ratio is well extended as it was in 2011. In September 2011, …
Read More »2025-02-18
Egg prices were up nearly 19.5% in last Wednesday’s CPI report as the Avian flu wreaks havoc on the nation’s egg supply. Despite its inconsequential role in determining inflation, Eggflation is getting much publicity. Given the Eggflation fearmongering on social media, it’s worth putting some context on egg prices and their impact on CPI. Eggs …
Read More »2025-02-17
When planning for retirement, most people focus on savings, investments, and budgeting for daily living expenses. However, one critical component that often gets overlooked is an emergency fund. Having an emergency fund in retirement is essential for maintaining financial stability and peace of mind. Unexpected expenses, such as medical bills or home repairs, can derail …
Read More »2025-02-14
In mid-March, the government is expected to hit the debt ceiling. As has seemingly become the norm, dire threats from both political parties will start shortly. However, despite the fiery rhetoric, they often get resolved before the government shuts down. Might the coming fiscal standoff be a little different? Our colleague Greg Valliere, a long-time …
Read More »2025-02-13
The January CPI report was troubling as it rose more than expected. The monthly rate rose by 0.5%, about 0.2% above expectations. The core monthly rate was a tenth of a percent above expectations, at 0.4%. The year-over-year CPI rate rose to 3% from 2.9%. The latest CPI data argues inflation is stuck in a …
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Managing risk is one of the most critical aspects of successful investing. While all investments carry some degree of risk, effective investment portfolio risk management can help you preserve wealth, achieve financial goals, and weather market fluctuations. Understanding and employing strategies such as diversification, asset allocation, and hedging can significantly reduce your exposure to potential …
Read More »2025-02-12
The graphs below, courtesy of Truflation, are very telling. The Truflation US Inflation Index uses over 30 million data points to assess price changes and, as a result, provide a robust forecast for the BLS CPI number. Moreover, their data have proven to be an incredibly accurate forecasting tool. As we share in the graph …
Read More »2025-02-11
If one weren’t paying attention to the cryptocurrency market, one would think that all cryptocurrencies were doing well. For instance, meme coins are all the rage, and Bitcoin has been up about 50% since the election. Donald Trump and his pro-crypto rhetoric help explain the rally. Moreover, Trump has nominated pro-crypto people to serve important …
Read More »2025-02-10
Planning for retirement is one of the most important financial goals in life, yet it’s also one of the most complex. While creating a retirement plan on your own may seem feasible, the expertise of a financial advisor can make a significant difference. Financial advisors offer personalized strategies, help navigate complex financial decisions, and provide …
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Bond vigilantes had been questioning Janet Yellen’s debt management tactics in her role as Treasury Secretary. Specifically, they accused her of shifting debt issuance away from longer-term maturities and toward shorter ones. We think her strategy made sense. Yellen was issuing more debt where demand was the greatest and trying to limit the amount of …
Read More »2025-02-07
The Wall Street Journal published an interesting article For Small Cap Stocks, Look Past The Trump Trade. It is worth sharing the article’s premise and the potential pitfalls in the analysis as quite a few articles seem to be popping up recently touting small-cap stocks. Let’s start with the scatter plot below, courtesy of Fuery …
Read More »2025-02-06
Planning for retirement involves building a diverse and stable income strategy that ensures financial security throughout your golden years. Among the tools available, annuities in retirement planning offer a unique advantage: the ability to create a reliable, guaranteed income stream. However, understanding their types, benefits, and potential drawbacks is essential to determining whether they fit …
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When formulating its monthly employment data, the BLS includes an adjustment for the net number of new jobs coming from new businesses and those lost by companies that have shut down. This adjustment is logical, as neither new nor closing firms are included in their surveys. While the so-called birth death adjustment is rational, the …
Read More »2025-02-05
The newly formed Department of Government Efficiency (DOGE), headed up by Elon Musk, is tasked with reducing government waste and increasing efficiency and productivity. The big question bond investors are keying on is how effectively DOGE can reduce the deficit. Tracking DOGE savings is now easy. As we share below, the US Debt Clock shows …
Read More »2025-02-04
Investors woke up Monday morning to a sea of red. On Friday, after the markets had closed for the weekend, President Trump announced a new series of tariffs levied against Mexico, Canada, and China. Moreover, he threatened that those tariffs could increase and that new tariffs would be announced for the Euro-region. Cryptocurrencies, technology, and …
Read More »2025-02-03
Securing your financial future begins with a comprehensive plan. This guide explores the fundamentals of financial planning, building a holistic strategy, and effective retirement techniques. Readers will learn how to navigate financial statements, manage tax planning, and engage with a financial advisor for wealth planning. Whether dealing with a single audit or seeking to enhance …
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The media holds bond vigilantes out as do-gooders looking to force the government to be fiscally responsible. In reality, these vigilantes are traders who are short bonds, and use the fear of deficits and inflation to drive yields higher. While the term has been around for 25+ years, their recent success is unlike any past. …
Read More »2025-01-31
An investor reading Microsoft’s (MSFT) and Tesla’s (TSLA) earnings summaries on Wednesday night would likely anticipate that MSFT shares would trade higher and Tesla shares lower. At the opening of the market the following day, the opposite held. MSFT opened up 4% lower, while TSLA was 4% higher. Let’s summarize their respective earnings to see …
Read More »2025-01-30
As expected, the Federal Reserve put further rate cuts on hold. After cutting rates three times in the latter half of 2024 for a total of 1%, the Fed is taking a break. While the Fed is still forecasting that inflation will trend lower by year-end, it is concerned that the trend has been stalling …
Read More »2025-01-29
Personal consumption represents over two-thirds of economic activity. Therefore, consumers’ ability to spend, i.e., income, is vital to the economy. Taking it one more step, confidence in the security of our jobs and wages drives the marginal consumption behaviors of most citizens. With that, we share a chart that should worry the Fed. The chart …
Read More »2025-01-28
Bloomberg wrote a fascinating article showing that the speculative environment gripping crypto markets and some stocks has spread to the junkiest of junk bonds. Their article, Traders Asking “Why Not?” Rush Into Venezuela and Lebanon Bonds, speaks to “a massive rally in emerging market junk bonds.” They focus on debt from Venezuela and Lebanon in …
Read More »2025-01-27
Tax efficiency is not just a buzzword—it’s a cornerstone of a successful financial plan. Every dollar you save on taxes is a dollar that can be reinvested, saved for retirement, or used to achieve your personal goals. Whether you’re planning for retirement, managing investments, or strategizing for future expenses, minimizing tax burdens can make a …
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Bitcoin and other cryptocurrencies are hitting record highs partly due to Donald Trump’s pro-crypto policies. One such anticipated policy proposal was the establishment of a strategic crypto reserve. Presumably, this would be similar to currency strategic reserves the US holds but would hold cryptocurrencies. The plan, announced Thursday night, calls the strategic crypto holdings a … Continue reading »
Read More »2025-01-24
The latest BLS and Cleveland Fed release of their quarterly new tenant rent index was lower by 2.43% year over year and over 5% from the prior quarter. The sharp rate of decline was surprising. Moreover, the update gives us more confidence that inflation is heading toward the Fed’s 2% target. Unlike CPI shelter prices, …
Read More »2025-01-23
Retirement is a time to enjoy the results of years of hard work and saving, but ensuring you have enough income to maintain your lifestyle is a challenge that requires careful planning. Effective retirement income planning focuses on creating a sustainable retirement income strategy that balances guaranteed income sources, investment growth, and the need to …
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With Donald Trump now officially President, we will learn which campaign promises were rhetoric and negotiating tactics and which he plans to enact. For many economists and nations, tariffs are at the top of the list of importance. China, in particular, closely followed by Canada and Mexico, appears to be at the most risk of …
Read More »2025-01-22
A reader of Tuesday’s Daily Commentary made a very astute comment. The title of the Commentary was “Trump Meme Coin Creates Billions Out Of Thin Air.” It doesn’t create anything… It transfers He is 100% correct. Meme coins and other forms of cryptocurrency do not create dollars. They transfer dollars from one person or entity …
Read More »2025-01-21
With markets closed over the long holiday weekend and Donald Trump’s inauguration and related politics taking center stage, no one thought the financial markets would make the headlines. They did. On Friday night, Donald Trump launched the largest meme coin in history. A meme coin is a cryptocurrency based on a meme. Like a baseball …
Read More »2025-01-20
The latest CPI inflation news was OK. The 0.4% headline increase is higher than in prior months but aligns with expectations. Core CPI, excluding food and energy, is .1% lower than the consensus at .2%. The report relieved Wall Street as it did not show a resurgence in inflation. Stocks and bonds are trading much …
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Creating an estate plan is a critical step in protecting your legacy and ensuring your assets are distributed according to your wishes. Estate planning essentials like wills, trusts, and beneficiary designations provide clarity for your loved ones while safeguarding your financial legacy. Whether you have a large estate or modest assets, an effective plan can …
Read More »2025-01-17
Our Commentary from January 7, Outflows Of TLT Are Tremendous, discussed the ‘tremendous’ investor outflows of the bond ETF- TLT. While outflows are often associated with investors being bearish, that is not always true. Nonetheless, TLT is in a bearish trend, and indeed, some of the record outflows from TLT are due to the environment. …
Read More »2025-01-16
Retirement planning often focuses on saving and investing for daily living expenses, but healthcare costs can significantly impact your financial security. With longer lifespans and rising medical expenses, preparing for healthcare costs in retirement is essential. This guide explores projected healthcare expenses, the role of Medicare and supplemental insurance, and strategies for managing retirement healthcare …
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On Monday, the S&P 500 officially made a round trip back to the same levels as election eve. The equity rally that kicked off when Donald Trump won the election has been erased. The financial media blames the recent dump on prospects for wide-reaching tariffs and other policies. The reality is that higher bond yields …
Read More »2025-01-15
Fed rate cuts, tariffs, deficits, California wildfires, and other narratives bolster a growing concern that inflation will surge again. While those narratives are concerning, and some may have merit, market and survey-based inflation expectations do not confirm them. The Fed and almost all economists use two types of gauges to measure inflation expectations: surveys and …
Read More »2025-01-14
Warren Buffett’s company, Berkshire Hathaway, has about $325 billion in cash, accounting for over a quarter of its portfolio—the highest percentage in over 30 years. The question begging an answer is, what is worrying Warren Buffett? We believe the answer is valuations. We have shared numerous charts over the last few months showing how valuations …
Read More »2025-01-13
The initial reaction to Friday’s BLS jobs report was a yield surge and a sharp stock decline. Stock investors are finally noticing higher yields. While sentiment can certainly cause stocks and bonds to deviate from fundamentals, at the end of the day, they both have fundamental roots in economic activity. Over the past couple of …
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Planning for retirement is one of the most important financial tasks you’ll ever undertake. A comprehensive retirement planning strategy can help ensure you achieve your goals, maintain your desired lifestyle, and manage risks effectively. Whether you’re just starting or nearing retirement, this guide walks you through the essential steps to create a solid financial plan …
Read More »2025-01-10
The latest stock market bubble may be one of the shortest-lived bubbles in recent times. Quantum computing stocks rose in November and took off in December when Google touted the immense power of quantum computing. The following is from Google (LINK): Willow performed a standard benchmark computation in under five minutes that would take one …
Read More »2025-01-09
When planning for retirement, choosing the right Individual Retirement Account (IRA) is a crucial decision. Traditional and Roth IRAs are two popular options, each with distinct advantages and limitations. Understanding the differences between traditional vs Roth IRA accounts will help you make an informed decision based on your financial situation and retirement goals. Contribution Limits …
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As we share below, bond market sentiment, known officially as the term premium, has been almost entirely responsible for the recent surge in bond yields. Specifically, behind the move is investor concern regarding another round of inflation stemming from the recent Fed’s rate cuts. The poor sentiment is very apparent when comparing news to a …
Read More »2025-01-08
Bloomberg led its article “Credit Markets Signal Warning for a Relentless Equity Rally” with the following paragraph: Stocks are close to the most overvalued against corporate credit and Treasuries in about two decades. The earnings yield on S&P 500 shares, the inverse of the price-earnings ratio, is at its lowest level compared with Treasury yields …
Read More »2025-01-07
Outflows from bond ETFs, such as TLT, have been tremendous over the last two months. ETFs, unlike mutual funds, allow dealers to redeem shares for the underlying securities and vice versa. The exchanges most often occur when the demand to buy or sell the ETF is high, thus creating a small arbitrage for the dealer. …
Read More »2025-01-06
Market volatility is an inherent part of investing, and while it can be unsettling, it’s not necessarily a bad thing. For disciplined investors, periods of market fluctuation present opportunities for growth and long-term wealth building. To navigate these uncertain times, understanding the causes of volatility, managing your emotional responses, and employing sound investment strategies are …
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Corporate executives are sending vastly different messages to their respective investors. Based on one indicator, they must be pretty bearish, yet another reeks of bullishness. Let’s take a look at corporate executives’ Jekyll and Hyde-like behavior and try to make some sense of their actions and what they might portend for their companies. As we …
Read More »2025-01-03
The percentage of S&P 500 stocks outperforming the index on a rolling 21-day period fell below 15% late last year. That aligns with the record low set last July. Needless to say, the market’s breadth is historically horrendous. Last July, after months of significant outperformance by the mega-cap stocks, the poor market breadth corrected quickly. …
Read More »2025-01-02
While 20% gains in the S&P 500 are not uncommon, as circled below, back-to-back 20% gains have only occurred three times since 1950. The most recent back to back 20%+ gain was 2023 and 2024. Accordingly, given the rare performance of the last two years, lets look back and see what history teaches us. The …
Read More »2024-12-31
Over the past couple of weeks and into the next few weeks, you will likely be inundated with economic forecasts and stock market scenarios for 2025.
Read More »2024-12-30
Building wealth through investing requires a clear understanding of foundational principles and a disciplined approach to asset allocation. Whether you’re new to investing or looking to refine your strategy, this guide explores key investment strategies for wealth creation, offering insights on diversification, risk tolerance, and how to build a portfolio that aligns with your goals. …
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AI machine learning receives most of the publicity concerning today’s technological advancements, but the potential in quantum computing is just as exciting, if not more so. There’s a fundamental difference between quantum computing and AI. Artificial intelligence utilizes classical binary computing, where information is processed in bits, which can either be in an on or …
Read More »2024-12-27
2024 was an unbelievable year for the S&P 500 up 28% YTD. The index constituents’ average and median returns are 15.7% and 11.8%, respectively. Altogether, this year’s index returns dwarf the long-term average S&P 500 return of 7.9% since 1928. The Finviz heatmap pictured below shows the 2024 returns of the stocks in the index. …
Read More »2024-12-26
Planning for retirement is a lifelong process, but inflation can pose significant challenges to even the best-laid plans. Inflation slowly reduces the purchasing power of your savings, which can leave retirees struggling to afford the lifestyle they envisioned. Understanding the inflation impact on retirement and taking proactive steps to protect your retirement savings is critical …
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The Fed uses many inflation gauges to develop its forecasts. An important one that Powell has flagged many times is inflation expectations. However, there is a weakness in using inflation expectations as an input to the Fed’s forecasts. Inflation expectations are collected from two primary sources: markets and surveys. Both traders and individuals have political …
Read More »2024-12-23
Planning for retirement is a lifelong journey that evolves as you progress through different stages of life. A well-thought-out strategy not only ensures financial security but also helps you achieve the lifestyle you desire during your golden years. This retirement planning guide breaks down the process into manageable phases—from early career to post-retirement—emphasizing the importance …
Read More »2024-12-19
Creating a reliable income stream during retirement is essential to maintaining your lifestyle and achieving your financial goals. With longer lifespans and rising costs, having a clear plan for generating income is more important than ever. In this article, we’ll explore key retirement income strategies, including annuities, dividend-paying stocks, and bond ladders, and provide tips …
Read More »2024-12-16
When it comes to building long-term wealth, it’s not just about how much you earn but how much you keep. Taxes can significantly impact your investment returns, making tax-efficient investing a crucial component of any wealth accumulation strategy. By utilizing tax-advantaged accounts, employing strategies like tax-loss harvesting, and selecting tax-efficient funds, investors can reduce their …
Read More »2024-12-12
Retirement may seem like a distant milestone when you’re in the early stages of your career, with other financial priorities like paying off student loans, building an emergency fund, or saving for a home often taking center stage. However, starting your retirement planning early offers significant advantages that can make a profound difference in your …
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