Trump vs. Biden Tax Proposals
What each candidate has in mind for our tax dollars:
Do Valuations Matter?
Feb 2020: The S&P 500 hits an all-time high before the COVID-induced selloff. Aug 2020: The S&P 500 recovery is complete as the index sets a new all-time high. A funny thing happened along the way that’s not captured in the above graph. Earnings and projected future earnings fell off a cliff – the [...]
The S&P 500’s Misleading Truths
Lying with numbers is easier than with words. Why? People equate math with science and science with fact. The S&P 500 isn’t lying to us. In fact all statistics below are accurate. We aren’t being lied to but we sure are being misled. Here’s an interesting chart put together by Goldman Sachs: YTD the [...]
How Americans are Spending Stimulus Payments
When the government rushes out a program that lacks oversight and is based upon arbitrary rules it’s going to create many unintended consequences. If you’re pro-Democrat or pro-Republican you can find what you like/dislike about ‘stimulus’ payments and head over to Twitter for ‘reasonable and intelligent discourse.’ This post is not about commentary. We’ve already [...]
Reasons to Sell
Maybe it’s fight or flight but when times are good people tend to worry about the next downturn. When times are bad people tend to worry it can only get worse. It’s why those preaching negativity sound astute whereas those being pragmatic or positive sound out of touch with reality. Consider the economy and its [...]
Investors Sitting on Record Cash Pile
The so-called TINA trade (“there is no alternative”) suggests stocks are the only place to invest. Cash is yielding nothing unless you want a 1-year CD at 0.10%. The 10-year Treasury (currently at 0.695%) is risky as rates have nowhere to go but up. Corporate bonds might be attractive on a risk/return basis but for [...]
The S&P 500 is Positive YTD (Surprise!)
After Friday’s jump (credited to the jobs report but, frankly, “pundits” always confuse correlation with causation) the S&P 500 was roughly even YTD. After Mon’s increase the S&P 500 closed positive for the year. That’s right – despite all the handwringing and proverbial jumping out of windows by many investors the S&P 500 is positive [...]
An Average Year in the Stock Market Does Not Equal a Typical Year
A somewhat understandable mistake made by investors is to interpret average return as typical return. These things are quite different. The above chart illustrates the annual returns of global stocks dating back to 1995. The average return is 9%/yr as illustrated by the grey dashed line. Notice, however, that individual annual returns were as high [...]
Who Are You?
In Oliver Stone’s Wall Street the character of Lou Mannheim was expertly played by Hal Holbrook. Should any less have been expected from such a phenomenal actor? The character was written as a seasoned veteran and included in the film to impart wisdom on the young and relatively inexperienced. Here are a couple of his [...]
IRS Waives 2020 RMDs
IRA owners in mandatory distribution status need not take their Required Minimum Distributions for tax year 2020. The waiver is part of last week’s legislative action taken by Congress and signed into law by the President to provide fiscal stimulus during the COVID-19 crisis. Governmental logic (not meant as an oxymoron but…) is that without [...]