Inflation

  • 09 Nov
    The Economics Are Great, But Valuations Point Toward Stock Picking To Limit Risk

    The Economics Are Great, But Valuations Point Toward Stock Picking To Limit Risk

    • GDP, productivity and earnings are growing which is great news.
    • However, valuations are high and interest rates are likely to rise soon.
    • Given the variations in revenue and earnings growth, and the upcoming changes in interest rates, now may be the time to switch from index investing to stock picking.

    Introduction

    As the earnings season is almost over—and GDP, productivity and labor data is in—it’s a good time to look at what kind of conclusions can be made out of the multitude of information. By putting the noise aside (the election) and focusing on news that impacts future earnings, we’ll relate recent developments to the potential risks and rewards for your portfolio. More →

  • 01 Nov
    GDP Is Up But Stocks Are Down – How You Should Respond

    GDP Is Up But Stocks Are Down – How You Should Respond

    • Inflation is approaching 2% as the current dollar GDP has increased to 4.4%.
    • Both inflation and GDP growth will force the FED to take action – the selloff in yielding assets will continue.
    • Nondurables consumption leads to GDP growth alongside exports and inventories buildups questioning GDP growth sustainability.

    Introduction

    Last Friday, the Bureau of Economic Analysis released the GDP data for Q3 2016. At first, it looked surprisingly good with the GDP growing at an annual rate of 2.9% for the quarter. This is excellent news as it takes the economy out of its anemic growth rhythm seen in the last two years. More →

  • 18 Oct
    Investing Advice From John Maynard Keynes

    Investing Advice From John Maynard Keynes

    • It’s good to invest for the long run, but don’t let that be an excuse for investing in overvalued stocks as in the long run, we all die.
    • Often shunned as irrelevant, inflation must be considered when investing.
    • Markets are irrational and get more irrational as people think less. ETFs are the perfect example.

    Introduction

    You probably remember Keynes from Economics 101 as his ideas fundamentally changed the way people looked at economics in the first part of the 20th century. Before Keynes, a laissez-faire (let people do as they choose) economy with low or no government involvement, was the norm.

    By studying the causes of business cycles, Keynes came to the conclusion that government intervention is necessary to moderate boom and bust cycles in an economy. He endorsed the New Deal in a letter to President Franklin D. Roosevelt in 1933, and the New Deal remains a perfect example of his theories. More →

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