facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause

Market Insight

When it Comes to Investing, Less is More

Avoidance and procrastination are natural enemies of goal achievement. To put off to tomorrow, what can be done today is a surefire way never to complete those nagging household chores, finally read that book your friend recommended last year, or cross the finish line feeling strong at a local 5k race. But, according to Nobel prize winner Richard Thaler, these same impediments to accomplishment could make you a better investor.

Quarterly Newsletter

Inflation, Rising Interest Rates, Bank Failures, and a Recession. Sometimes, Bad News is Good News.

Investors were eager to put 2022 behind them as the clock struck midnight on December 31. After all, it was the worst year for stocks since 2008 and the worst year for bonds - ever. Yet, there was little cause for optimism as it seemed, and still does, that 2023 would not offer a reprieve from the challenges that faced the economy and financial markets last year. Namely - inflation, rising interest rates, and a looming recession. Add to that mix the largest bank failure since 2008, and one would assume that the losses would have extended through this year’s first three months. However, in the world of financial markets, sometimes bad news is good news.

Why Your Money is Like a Bar of Soap

It’s been a tough 12-month stretch for financial markets. The S&P 500 (an index of the 500 largest companies in America) was down nearly 20% in 2022 - its worst year since 2008. By many measures, bonds had their worst year ever, recording double-digit losses. Bellwether stocks that carried the market for the past several years had it far worse. On a combined basis, Apple, Microsoft, Alphabet (Google), Tesla, Meta (Facebook), Amazon, and Netflix were down nearly 50%. Many popular “Covid stocks,” like Peloton and Zoom, are down over 90% from their peaks. Some investors in the riskiest corners of the market (like cryptocurrencies) were wiped out altogether. Yes, 2022 was a rude awakening. And while there was little place to hide, those who followed old lessons of diversification and risk management likely avoided life-altering losses.

The Cost of Free Money

There’s no such thing as a free lunch. You know the phrase and what it means. Free hotel breakfasts, free checking, and free shipping all have associated embedded costs that we pay but don’t necessarily see. Everything has a cost, even money. The cost of money is the interest rate we pay to borrow it, and for the better part of the last 12 years, that interest rate has been near zero. And while free money seems like a dream come true, it too has costs, and this year we are paying the price.

Quarterly Newsletter

It’s Real. US Government Bonds That Yield 9%+

Last week inflation hit a 40-year high and there has been much talk recently about its impact on markets and the economy (as we discussed recently here. One way investors can benefit from rising consumer prices is the Series I Savings bond (I-bonds) issued by the US. Treasury. I bonds set their interest rates every six months (in May and November) based on inflation and a fixed rate. Since they are tied to inflation rates, until recently I bonds have flown under...