Last week, I wrote about Alan Greenspan’s now-famous phrase, “irrational exuberance,” and made the case that timing the market is, at best, a fool’s errand. Greenspan uttered those words so early in the tech bubble that investors who sold after his warning and sat in cash ended up with roughly the same post-crash results as those who stayed invested through the rise and fall. This week, I found myself thinking… Read More
The jobs market is cooling down. The unemployment rate in August was 4.3 percent. In the pandemic, the unemployment rate peaked at 14.8 percent, but fell to 3.4 percent in April 2023. While the modest tick up from 3.4 to 4.3 percent isn’t great, some of the recent payroll data hasn’t met expectations either. The most recent monthly reading showed that just 22k jobs were created, less than expectations. Worse… Read More
Last week, I described Vanguard’s take on growth and inflation, and it got me thinking about inflation. In general, I was comforted by their views, which I characterized as ‘Steady as She Goes,’ but the inflation number started to bother me a little bit. Their forecast is for core Personal Consumption Expenditure (PCE), which is the Federal Reserve’s preferred measure for inflation, and Vanguard projected 3.0 percent for 2025 and… Read More
Last week, we had the pleasure of hosting a very sharp economist from Vanguard who shared the firm’s latest views on the economy. I found the conversation illuminating because it helped cut through much of the noise we often hear in the financial media. I’m not suggesting their forecasts are more or less accurate than anyone else’s. That’s an impossible standard, since no one knows what the future holds, especially… Read More
The One Big Beautiful Bill Act is now law. It’s a 940-page document, and I haven’t read it, but my reliable tax sources are highlighting some of the key provisions for individuals that I thought you might find helpful. Before I get into the OBBBA (or OBBB or OBB; they’re still working on the acronym), it’s worth noting that Missouri Governor Mike Kehoe signed a bill that will eliminate individual… Read More
A few months ago, the term ‘stagflation’ was mentioned too casually and frequently, in my opinion. Investors were worried about the impact of a trade war, which is natural, but were too quick to go to “The S Word.” Stagflation is a portmanteau of stagnation and inflation, coined in the 1970s when economic growth was very low (and sometimes negative) and inflation was very high. The term stagnation was often… Read More
It’s not surprising that clients are inquiring about gold, as it has risen 25.3 percent so far this year. When we started this business in August 2002, I thought gold was a terrible investment idea. However, in the 273 months since then, it has handily beaten foreign stocks and bonds, and even eked out a small win over the S&P 500. That’s right, during this time frame, gold gained 10.9… Read More
When the stock market sold -10.7 percent in the three days following Liberation Day, a handful of clients called and asked, ‘Hold the course, right?’ They knew what I would say, and they all held on, and I was relieved. When President Trump paused his tariff plan the following week, the S&P 500 rose 9.5 percent. That wasn’t enough to offset the loss, but it went a long way. One… Read More
When we meet with clients to create or review a financial plan, there’s a section where we try to get a sense of risk tolerance. We’ll show an asset allocation and its long-term expected return, and then, in big red numbers, what this portfolio would have lost in the 2008 financial crisis. We show it in percentage and dollar terms, based on the portfolio size at that time. The idea… Read More
I listen to a lot of investment podcasts, and one of the ones I enjoy the most is Trillions, produced by Bloomberg. It stars two journalists, Joel Weber and Eric Balchunas (pronounced bal-chew-ness, as best I can tell), and a few other rotating cast members. I enjoy listening because the hosts are Generation Xers (like myself), who are funny and down to earth. They feel like friends who talk in… Read More
