Beating Inflation

Every piece of inflation news has the power to terrify and send investors searching for ways to protect wealth.  Bonds look like a poor prospect.  As the Federal Reserve (Fed) raises interest rates, bonds will lose value simply as a matter or arithmetic.  (For an explanation see this post.)  Even if the Fed were to cease its counter-inflationary effort, …

Should I Sell Out?

I received an interesting question recently.  The answer may be instructive to many.  A retired man asked: I am 78 years old and count on my investments to help pay my living expenses.  Most of my money is in stocks.  With the market up so much, do you think it would be wise to sell out now, use some …

New Goals For The Fed?

Federal Reserve Board (Fed) Chairman Jay Powell recently announced a new policy framework within which to achieve its long-accepted goals of full employment with low and stable inflation. This change created some disruptive uncertainty in financial markets about how the Fed will behave in the future. Today’s level of disruption and uncertainty would pale, however, …

The Market Views the Coming Election

With Election Day fast approaching, investors have been concentrating increasingly on economic prospects.  Market reactions to the possibility of either a Trump or a Biden presidency will depend less on the candidate and more on the policies expected to emerge from their administration: these will determine how the market reacts before the election, while the actual policies …

Covid-19 Diary Number 9 (July 31, 2020)

Frequently in these posts, I have warned against market timing.  Though timing buy-and-sell decisions of individual stocks can have merit, timing such decisions in anticipation of moves in the overall market is simply too dangerous and is as likely to produce failure as it is success. By contrast, buying and holding a portfolio of stocks …

COVID-19 Diary Number 8 (July 14, 2020)

It seems that many people have begun to see the market rally as an opportunity to get out whole, or nearly so, after the frightening losses of late March. They despaired three months ago when stock prices went off a cliff, and now that prices have regained much of the lost ground, they wonder if they …

COVID-19 Diary Number 6 (May 30, 2020)

I started these “COVID-19 Diary” posts on April 1, shortly after the quarantines and lockdowns began.  Much has happened since then, including five posts trying to explain events as they occurred.  Now that those strictures are beginning to lift, it seems appropriate that this sixth post remind readers why things unfolded as they did. At …

Covid-19 Diary Number 5 (May 26, 2020)

The Labor Department’s jobs report for April offered official confirmation of what we already knew: the U.S. economy is in deep trouble. Though this collection of data is the worst since the Labor Department began this statistical series in 1957, the official report probably understated the extent of the economy’s troubles.  It showed that the …

COVID-19 Diary Number 4 (May 5, 2020)

The president and several governors have begun considering, and in some cases beginning to end, the worst of the lockdowns and quarantines in the effort to reopen the economy.  It is none too soon.  As readers of this site know, the strictures to “flatten the curve” of infections and hospitalizations threaten economic collapse.  Dr. Anthony …

COVID-19 Diary Number 3 (April 20, 2020)

The unemployment rate reported by the Labor Department for March understates, by a long shot, the nation’s economic pain.  According to the official report, non-farm payrolls last month fell 701,000 and the rate of unemployment rose from 3.5 percent in February to 4.4 percent. The actual figure is that closed businesses and quarantines likely reduced payrolls …