It is a combination of multiple negative factors that creates a worrisome diagnosis for already fragile economic health of the US economy. A sharp increase in oil prices from $22 in April 2020 to $120 in June 2022. The highest… Read More ›
Inflationary pressures are becoming less transitory and more long-lasting. Even before the horrific events in Ukraine, inflation was already very high. Additional sanctions on Russia added additional fuel to the fire of already hot inflation. Sanctions on Russia will also… Read More ›
This is the forecast of the S&P 500 Index for the 1Q 2022. It is based on the linear regression model where I use the Gross Domestic Product (GDP) to predict the value of the S&P 500 Index. This forecast… Read More ›
The fifteen investing principles create the foundation of investing. Before you go on to build your wealth castle, you need to understand how to build a strong foundation. This is the starting point of your investing journey. The learning process of being a successful investor only starts here and continues through your life
Oftentimes a successful investing requires the time commitment, ability, and wiliness to take risk. When it comes to the real life, very few investors have the luxury and wiliness to meet these conditions to become successful. In this paper, I analyze the stock market risk and highlight difficulties to remain calm and rational during volatile times. For risk averse investors, one of the solutions is to have a diversified portfolio. The simple 50/50 asset allocation strategy combines a broadly diversified equity index with long-term government bonds. It is one example of a simple diversification strategy.
How will the new US Secretary of the Treasury Janet Yellen effect the Economy and the Stock Markets?
President elect Joe Biden nominated Janet Yellen as the 78th United States secretary of the treasury. In my opinion, Janet Yellen will support aggressive fiscal stimulus of the US economy at the beginning of her new job.
How much will the stock market return in 2021? Is the stock market cheap or expensive?
Does it make sense to invest in government bonds now? Current valuation of government bonds became expensive. In this paper, I compare the total return on the iShares 20+ Year Treasury Bond ETF (ticker TLT) with the real yield on the 10-year US treasury bonds. By investing in the long-term US government bonds when the real rates are negative, makes such investment speculative and risky.
How did various stock markets around the world weather the Covid-19 pandemic? The degree of the stock market correction and recovery was different from one country to another.
How much home can you afford to buy due to the decrease in interest rates? Analysis of today’s housing market.
For home buyers lower interest rates increases home affordability. As rates decline, the amount of money one can borrow increases while the monthly payments stays the same.
The Simple 50/50 Asset Allocation Model – Proven to Withstand the Financial Crisis of 2008 and Covid-19 Pandemic
Investors may not be able to control their emotions, but they can control how they invest. For risk averse investors, selecting a model with lower volatility is a prudent decision. A risk averse investor is more likely to tolerate small losses and stay invested long-term with lower volatility portfolio
The US economy has a structural wage stagnation. For the last 34 years, wages have been growing at the effective real annual rate of 0.51%. Consumers who rely on salary alone, cannot increase discretionary spending too much. As discretionary spending declines, economic growth will slow down. This creates a risk for the next economic recession.
Passively managed funds can have a similar effect on the economy as systemically important financial institutions