Businesses, Stock Markets & the Economy What a Federal Reserve Rate Increase Means for You. “Rates on credit cards, savings accounts and different kinds of loans move when the Fed changes its benchmark rate. Here’s what you need to know.” (The New York Times) Panic Selling Quantified (Barry Ritholtz) “Nearly a third of investors who panic sell never buy equities again. My experience is that many panic-sellers repurchase equities at higher prices than they...

Businesses, Stock Markets & the Economy Some Thoughts on Bear Markets (Ben Carlson) Ben's thoughts on Bear markets include: “Staring at prices all day won’t make them stop going down.” “Bear markets are confusing.” “The people using this as an opportunity to scare you will never get you back in.” “Bear markets are buying opportunities.” “History provides context, not a crystal ball. “ “It’s been a while since we’ve had an...

Businesses, Stock Markets & the Economy Navigating Geopolitical Events (Dimensional) “Investors in global equity portfolios inevitably face periods of geopolitical tensions. Sometimes these events lead to restrictions, sanctions, and other types of market disruptions. We cannot predict when these events will occur or exactly what form they will take. However, we can plan for them by managing diversified portfolios and building flexibility into our process." "We previously reduced the weight of Russia in...

Businesses, Stock Markets & the Economy Ukraine and the changing market environment (Vanguard Perspective) “With geopolitical tensions such as the conflict between Russia and Ukraine, investors often ask whether a link exists between current events and financial market performance. However, when we examined major geopolitical events over the past 60 years, we found that while equity markets often reacted negatively to the initial news, geopolitical sell-offs were typically short-lived and returns over...

Businesses, Stock Markets & the Economy How Long Does it Take Tech Stocks to Recover From a Crash? (Ben Carlson) “But tech stocks are prone to these boom-bust cycles because innovation always causes bubbles. We simply can’t help ourselves.” 4 Reasons Inflation is So High Right Now (Ben Carlson) “Everyone is miserable about inflation but we can’t help but pay higher prices because if there’s one thing we do really well in this country…it’s consumption.” Navigating...

Businesses, Stock Markets & the Economy Will Inflation Hurt Stock Returns? Not Necessarily. (Dimensional) Your Finances & other Wealth Management links After the Fact (Morgan Housel) “… all wealth relies on the ability to receive an extra dollar and say, “I could spend this, and spending feels great, but I’m not going to.” It’s the same as turning down a big meal after working out, and it’s just as hard. All great things are...

Businesses, Stock Markets & the Economy Diversification Isn’t Undefeated But It Never Gets Blown Out (Ben Carlson) “There are different levels of losses in the markets right now: If you own value stocks, it’s not too bad (down 2-3%) If you own an S&P 500 index fund, it’s a minor correction (down 6-7%) If you own the Nasdaq 100, it’s a correction (down 11-12%) If you own small caps, it’s a bear...

Businesses, Stock Markets & the Economy Investment Lessons the Markets Taught in 2021 Part 1 (Evidence Investor) "Lesson 1: Valuations cannot be used to time markets." "Lesson 2: Active management is a loser’s game." "Lesson 3: Don’t make the mistake of recency; last year’s winners are just as likely to be this year’s dogs." "Lesson 4: Gold is not an inflation hedge over your investment horizon." "Lesson 5: The investment world...

Businesses, Stock Markets & the Economy Reframing Volatility (Michael Batnick) “When markets get volatile, we often hear people say, “ignore the noise.” But telling people to ignore the noise is telling people not to be people. It’s not practical advice. It’s important to contextualize short-term losses, but we can do better than this. Morgan Housel spoke about this idea, helping to reframe how we think about bear markets and recessions. If you view volatility...