Finance & Economics Blog
How much do you need to have in reserve for unexpected events? The popular financial gurus have their opinions which can range anywhere from three to eight months of living expenses in savings. Being prepared is the name of the game. Whether you’re laid off, become ill, have major unexpected car repairs or significant child …
You don’t hear a lot of people talking about deflation these days unless they’re scorning it. Inflation is all the rage in most circles and admittedly I’ve gotten caught up in the craze to some extent. However, I’ve been searching for contrary views on the inflation versus deflation debate as I wonder whether we really …
Volatility is a measure of the dispersion of returns of an individual stock or market index. Higher volatility tends to be associated with riskier securities and/or environments. Academic studies have shown that prices and volatility tend to be negatively correlated. In other words, when volatility is rising prices are falling. It’s not quite that simple …
Interest rate volatility has become very topical recently. While rising rates can be detrimental to asset valuations, it’s the rapid rise in rates that has the most harmful impact, especially on long duration assets. For example, 20 and 30 year bonds have experienced the greatest losses in the bond market in the wake of the recent …
Growth stocks have noticeably underperformed over the past few weeks as interest rate increases have accelerated. While painful to experience for growth investors, the drop shouldn’t come as a surprise after growth stock’s meteoric rise in 2020. The chart below is the ratio of the iShares Russell 1000 growth ETF (ticker: IWF) versus the iShares …
I wrote about bubbles last month here on the heels of an increasing volume of bubble speak. I don’t know if the volume has increased since then but it feels like the intensity has. At the time, I wasn’t sure we were in a bubble and I’m still not really sure. I think certain assets are potentially …
I’ve heard many people say they write so they can sort out their thoughts, learn something and ultimately arrive at what they think about a specific topic. That’s what I’m attempting to do today. One of the great debates currently in the world of economics and investing is whether we’re headed for a sufficiently higher …
There’s enough bubble speak out there so far this year to last us all of 2021, in my opinion. I’m not disagreeing the arguments being made but I’m getting to the point that if there’s a bubble will it just pop already so we don’t have to keep hearing about it?!?! With the amount of …
A lot has been made of the Wall Street Bets/Gamestop saga. The whole episode was quite extraordinary and entertaining, at least from my perch. Financial markets are always evolving. Over the past 20 to 25 years, the evolution has favored smaller investors with the move from fractions to decimals in 2000 to the ongoing compression …
So we all woke up today and went about our days like we usually do in spite of the inauguration of a new president yesterday. The same thing happened four years ago when the previous president was inaugurated. Funny how life, business, investing and everything else continues to move on in spite of all the …