Advice for this week is to take a deep breath and drink lots of water! So many converging crises that it is challenging to pick just one! It seems that the crises are never ending since the financial meltdown. The difference this week is the stock market is taking note . The decline from average highs is only about 3%, but pockets of the market have declined more significantly. Analysts are predicting declines of 20%...
Headlines last week discussed the change in the financial outlook of Social Security. The link below digs deeper into the methodology and impact of this analysis. Here is a link to the Center for Retirement Research at Boston College , one of the most objective think tanks focusing on Retirement. We recommend taking a look at their website if you are interested in this topic. The stock market stalled last week after week after week...
With interest rates staying so low throughout the world, the attraction of riskier assets such as stocks remains high. An example of this attraction to risk is in the European markets where junk bond yields are lower than current inflation rates of 3%. There is no end to bond purchases by central banks in Europe so interest rates remain bearing mostly negative yield, including the 10 year benchmark German Bund with a -.32% yield. The...
Opportunity always lurks in bad events. Example, buying stock both in 2009 and 2020 during bear markets has paid off and is still paying off today. It was not easy to buck the crowd because one of our behavioral biases is that whatever is happening now feels like it will happen forever. During the beginning of Covid, it was hard to see us emerging from the pandemic. It still is, but the impact of the...
This week opened with the NASDAQ index hitting a new high in a rebound from the previous week's decline. Last week, economic growth was called into doubt by the Delta variant as well as economic estimates that fell short. The sentiment has changed this week with a lower fear of Delta having a long term impact, but just shifting demand. The Federal Reserve has a big conference this week that was moved from in person...
A new week, a new set of crises. Rising to the top is Afghanistan and American troop withdrawal . In addition, we have the Covid-19 Delta surge and its impact on health, travel, and the economy. This displaced Andrew Cuomo, the Governor of New York and the January 6th Congressional investigation. Unfortunately, one lesson that is evident is if you are in the news in a bad way, just wait and you will be replaced...
Infrastructure Spending This week the Senate passed a bipartisan infrastructure bill with a cost of $1T. The amount stems from left over Covid-19 American Rescue Plan funds coupled with a proposal to report and tax cryptocurrency transactions. The Congressional Budget Office reports it will add $250B to the existing budget deficit. Half the bill is new spending and not part of any other legislation or previous spending program. Some non-traditional infrastructure items are being funded...
As the Delta variant spreads more aggressively than the original infection, America’s reaction consists of more separation- vaccinated from unvaccinated. The surge is happening among the unvaccinated accompanied by a low rate of breakthrough cases in the vaccinated. Our political leaders are hesitant to declare mask mandates because Americans thought and acted like the pandemic had ended. Even Dr. Fauci says there is no need for mandatory mask wearing. One hope is that the news...
Market Analysis Market analysts use facts to justify their outlook for future performance. There are many facts at their disposal and selecting only the facts that confirm their outlook is part of the game. Generally, my advice is to tune out those analysts because their track record is spotty at best. I viewed a webinar on one firm’s outlook for the rest of 2021, mostly because I earned 1 hour of CE (Continuing Education credits...
Market Update It’s official; the shortest recession in US history has been officially declared- 2 months! It was also one of the steepest. Does anyone remember the fear, paralysis and unknown of a public health emergency? The recovery in asset values has also set records. Stock prices, housing values, price and wages increased as well as record low interest rates. Makes your head turn for sure. This week, the Delta variant caused great concern in...
Earlier in my career I worked in health care. The Foundation for Shared Medical Decision-Making was my employer. They created video programs to assist patients who had been diagnosed with certain conditions for which the patient had decision options for treatment. The goal was to actively involve the patient in the decision making process because research said that the more actively involved the patient is in the decision making in regard to treatment, the more...
At the most recent G-7 conference finance ministers agreed on a minimum corporate tax rate of 15%. There are actually 2 pieces to the proposal: one piece taxes corporations in line with the country they operate in by taxing profits over 15%, and the second establishes a minimum corporate tax rate among the G-7 of 15%. The details are far from being worked out and, of course, the devil is in the details. What impact...
