FINANCIaL
FIELd NOTES
Is The Recent Market Correction Normal?
The stock market is off to a bumpy start to the year. As of market close on Friday, the S&P 500 was 8% off its high. Other parts of the stock market were down even more – the Nasdaq tech-heavy stocks were down more than 12%, small-cap stocks in the Russell 2000 were down 18%…
U.S. Debt - Can We Fix A $30 Trillion Problem?
Since 2008, US debt as a percentage of GDP has ballooned from 40% to nearly 100% - the highest levels we have seen since the end of WWII when the US issued all those War Bonds.
While the debt levels in the country are a tremendous concern, there are two larger themes at play that give us some hope for the future…
Potential Pitfalls In Bond Investing
Clients of mine know that we tilt heavily toward low-cost broadly diversified index funds to build portfolios. This has historically produced far better returns than using higher fee active fund managers to try to outperform the market.
However, there are a few areas of the market where we believe good active managers can outperform the index simply due to the flaws in how that index is made. One of those indexes is the bond market…
10-Year Market Outlook
Because of the variability of stock market returns in the short run, I steer clients away from short-term tactical changes to their portfolio and prefer to rely on the weighty evidence of history, along with long-term thematic trends in the market.
While no one has consistently and accurately predicted what the stock market is going to do, several well-respected firms provide long-term outlooks that have proven to be more accurate than short-term predictions…
Is Hyperinflation Coming?
A few weeks ago, on the heels of the highest inflation reading in 30 years (5.9%), Jack Dorsey, the founder of Twitter and Square, tweeted the following -
“Hyperinflation is going to change everything. It’s happening.”
It instantly sparked a lot of concern, and then debate. Exactly what is “hyperinflation” and are we heading toward it?
Why Average Returns Are Misleading
I often write about financial planning strategies that assume a rate of return. I try my best to use reasonable assumptions but even these assumptions can be misleading.
For example, the average return was 10% for the S&P 500 (or similar index) over the past 90+ years. Investing would be a whole lot easier if we could have the assurance that the 10% would come every year. Unfortunately, it doesn’t work that way…