I look out my office window as I write this and we finally have a sunny day—and it’s 82 degrees. And on top of that, it’s a Friday afternoon! A perfect day to ramp-up your vitamin D levels. So let’s get into this letter and get it done.
Regarding the markets, April had an excellent rebound from the horror show that was March. Read More
Well, here we are still stuck in social distancing due to the COVID-19 pandemic. Retail shops, bars, clubs, restaurants, and almost everything else are closed for probably another month. Even Major League Baseball is in hiding. Every new day looks like yesterday. The only excitement these days is in the markets. And that is the last place we want drama.
April has been a welcome relief to the Read More
Well, that sure escalated quickly! The old saying is that markets go up on an escalator and come down on an elevator. Over the long-term this month and perhaps this entire year will be an elevator trip to the lower floors. But if history is any guide (and is there any better guide?), the long and relentless march from the lower left of the chart to the upper right will continue. Nothing has ever stopped that march, and I doubt this virus and lower oil prices will either.
As I write this morning, Read More
After last week and the beginning of this week, I think it is a good time to address the world-wide gorilla in the room—Coronavirus, or COVID-19, as it is now officially named. Monday and Tuesday were horrible days in the markets as many people (and algorithms) panicked out of equities and moved to cash or Bonds. We will not panic here.
Let’s look at the good news first. Read More
I finished a good Audible Book this summer, 12 Rules for Life by Jordan Peterson[i]. Since writing this best selling book Dr. Peterson has become a worldwide celebrity and YouTube sensation. His lectures, blogs, podcasts, and talk-show appearances, are watched by hundreds of millions throughout the world. He just wrapped up a 160 worldwide city tour in the last year. He has over 2 million subscribers to his YouTube channel. All of which to say is pretty darn good Read More
July 16, 2019
It is July and we are now a bit over halfway through 2019. This has been a good year for the economy and the markets. As of July 15th, the S&P 500 is up 21.5%, the Dow Jones is up 18.6% and the NASDAQ is up 24.9%. We need years like this to counterbalance the dismal 2018. The 1-year trailing results are less eye-popping: S&P 500 up 9.89%, DJIA up 12.27% and the NASDAQ is positive 6.53%. Good enough—not trade in the Rambler for a Benz great–but good enough.
Just think if you were one of those poor investors that packed it in after that terrible fourth quarter of 2018. There were many across the country that did just that—people who couldn’t handle the volatility. They missed out on the fabulous recovery due to short term gyrations.
This is why we stay invested through thick and thin. Every downturn we humans have a tendency to think that this time it is different. The markets will not come back and this is the end of prosperity. That thought pattern is as natural as it is wrong. We are designed (through natural selection over hundreds of generations) to see patterns and trends in our everyday lives. It is a survival tactic that the winners in the game of life passed on to their children through the eons. Read More
June 12, 2019
The last quarter of 2018 was not very good in the US Markets. It was, in fact, the worst fourth quarter since 2008 and the worst Christmas Eve ever. And the financial media was in a frenzy. Finally, they were right. It had taken years but for once, the perma-bears were right. Hallelujah, hallelujah; their ratings were going to be great! Nouriel Roubini’s phone must have been burning up.
Just FYI, Nouriel Roubini is a Professor of Economics and International Business of Leonard N. Stern School of Business. His nickname is Dr. Doom if that gives you a clue. On March 20, 2017, he opined that the markets were “overestimating the positives of the US-Trump policies.[i]” March 2017 the S&P 500 stood at 2,378. Today the S&P opened at 2,890 (about 17% higher.) My guess is that more people have lost more money due to Dr. Doom’s predictions than anyone in the history of financial mass-media. Read More
May 15, 2019
There a couple of things most everyone needs when they are starting out and growing a family and buying a house—a Will and Life insurance. It is surprising how many people don’t have either one. So this month lets talk a bit about both.
A Will is probably the thing I find missing the most. First of all, Wills are fairly specific to the State you live in. A Maryland will doesn’t always work if you move to Delaware or Florida. So update your will when you change States.
In Maryland, more than likely all you ever really need is a will. Each County has an elected Register of Wills, The staff of the Register of Wills is very good at helping your executor fulfill your wishes outlined in your will. As in all things legal, certain procedures must take place and the staff will guide you through the process. Read More
April 16, 2019
I write this on April 16th, one day after our tax returns were due and in 2019, it is also tax-freedom day. Tax Freedom Day is the calendar day in which the average American as a whole will finally have earned enough to pay all of the taxes its Government(s) require. According to the Tax Foundation (a leading independent Tax Policy Research organization) in 2019 Americans will pay $3.4 Trillion in federal taxes and $1.8 Trillion in state and local taxes. That is about 29% of the nation’s income. [i] That is more than we spend on food, clothing, and housing, combined. Taxes are, by a wide margin, our largest household expense.
It was just in FY 1990 that tax revenue surpassed the $1 trillion mark and here we are 29 years later and we are over $3.4 Trillion.[ii] The USA has the largest GDP in the world and consequently, our government spends more than any other country in the world—even China and Germany added together. In fact, add Germany, Japan, France, and the UK’s fiscal spending together and we still spend more.[iii] And our $3.4 Trillion in taxes collected are more than any country in the world.
There’s not much we can do about our taxes—taxes are one of the two proverbial things that are guaranteed in life. We all know the other. Y Read More
