A common question I receive is ‘what interest rate does the Federal Reserve Bank (“Fed”) control’ and ‘how does it affect me?’ Since I’ve received the question a few times, here’s a memo!
The Fed controls the very shortest maturity rate called the ...
The First Rate Cut Since 2020
The Fed cut the interest rate they control (called Federal Funds) for the first time since March 2020 – during the panic of Covid. They started with a larger half a point cut. That was the right call in my opinion as inflation is down to 2.6% year-over-year and...
The S&P 500 Index hit its last all-time high on July 16th at 5,669. Since then, the market (as of this writing) is down about 8%. However, some stocks, namely Mega cap tech stocks, are down far more. The SPDR Technology Index ETF (XLK) is down 16% since its July 10th high.
What is...
So far it has been a good year with the S&P 500 up 15.3% in the first half.1 However, there are some dangers lurking beneath the surface, which we will discuss. We will also dive into the interest rate environment and inflation and how it forms the basis for managing portfolios.
One...
The short answer is: that’s not what you should be focusing on. Instead, investors should be asking, “at today’s valuation, is it a good time to invest?”
Investing at all-time highs may seem scary for investors. We are told to buy low and sell high and buying at all...
Financial advising is in need of a good shift in thinking. Most advisors still operate like it’s the late 20th century, baby sitting assets, and for retirement income, selling some of those assets each month to cover the clients’ monthly expenses.
One of the things we need to help our...
One of the largest issues this election cycle will be the deficit. In my opinion, it hasn’t received nearly enough attention even though it has received a good amount. The fiscal situation in this country trumps (pun intended) anything to do with the border or democracy.
The problem comes...
Looking back at 2023, one thing we can reflect on is the winding road we navigated along the way. The last several years we’ve had alternating results and abnormal returns. In 2020, the S&P fell more than 33% before recovering before year’s end to finish up 18%. In 2021, the...
One of the largest competitors to the stock and bond markets is real estate. In the United States alone, real estate is worth $47 trillion in June 2023, according to Benoit Properties.1 Owning real estate has been the cornerstone of the American Dream since the Pilgrims landed four hundred years...
“We’re aware of the risk that we would hang on too long. We’re very focused on not making that mistake.”
- Jerome Powell, Fed Chairman
Less than two months ago, I wrote to clients that the pivot was coming over the next year. Little did I know it was coming in...
“Throughout history, whenever most investors believed the worst about a particular asset class, such has often been the right time to start buying. As we have often discussed, psychological behaviors account for as much as 50% of the reasons investors consistently underperform the markets...
The Fed kept rates at current levels at their meeting this week, but whether they are done with their tightening or not is yet to be determined. If there is one more hike (or even two), it doesn’t really matter at this point.
Monetary policy is now extremely restrictive and while it takes...
