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Tag Archives: S&P 500

Strongest Economy Ever? I Warned You About Negative Revisions

Over the last 18-months, there has been a continual drone of political punditry touting the success of “Trumponomics” as measured by various economic data points. Even the President himself has several times taken the opportunity to tweet about the “strongest economy ever.” But if it is the “strongest economy ever,” then why the need for aggressive rate cuts which are “emergency measures” to be utilized to offset recessionary conditions? What the Market wanted to hear from Jay Powell and...

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S&P 500 Monthly Valuation & Analysis Review – 8-1-19

Real Investment Advice is powered by RIA Advisors, an investment advisory firm located in Houston, Texas with more than $800 million under management. As a team of certified and experienced professionals, we seek to provide our clients with educational services and the necessary information and tools to educate you in the field of finance, investing and economics. To this end, you can use the Real Investment Advice Platform to avail yourself of various video, audio and...

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The 5-Mental Traps Investors Are Falling Into Right Now

I recently wrote about the “F.I.R.E.” movement and how it is a byproduct of late-stage bull market cycle. It isn’t just the “can’t lose” ideas which are symptomatic of bullish cycles, but also the actual activities of investors as well. Not surprisingly, the deviation of growth over value has become one of the largest in history. This divergence of the “performance chase” should be a reminder of Benjamin Graham’s immortal warning: “The investor’s chief problem, and even his worst enemy,...

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The $6 Trillion Pension Bailout Is Coming

Fiscal responsibility is dead. This past week, Trump announced he had reached an agreement with Congress to pass a continuing resolution which will suspend the debt ceiling until July 2021. The good news is that it will ONLY increase spending by just $320 billion.  What a bargain, right? It’s a lie. That is just the “starting point” of proposed spending. Without a “debt ceiling” to constrain spending, the actual spending will be substantially higher. However, the $320 billion is also...

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F.I.R.E. – Ignited By The Bull, Extinguished By The Bear

Do you remember this commercial? The Etrade commercial aired during Super Bowl XLI in 2007. The following year, the financial crisis set in, markets plunged, and investors lost 50%, or more, of their wealth. However, this wasn’t the first time it happened. The same thing happened in late 1999. This commercial was aired 2-months shy of the beginning of the “Dot.com” bust as investors once again believed “investing was as easy as 1-2-3.” Why this trip down...

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The One Lesson Investors Should Have Learned From Pension Funds

Just recently I ran a 3-part series on the variety of things individuals believe about saving and investment which is either erroneous or misunderstood. (Part 1, Part 2, Part 3) The feedback I get when challenging some of the more commonly held beliefs is always interesting. In almost every single case, the arguments against “mathematical realities” comes down to either: An inability, or unwillingness, to sacrifice today to save more for the future, or; A “hope” that markets will continue to...

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Questions About The “Stellar” June Jobs Report (Which Also Confirm The Fed’s Concerns)

On Wednesday, Jerome Powell testified before Congress the U.S. economy is “suffering” from a bout of uncertainty caused by trade tensions and slow global growth. To wit: “Since [the Fed meeting in mid-June], based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.” That outlook, however, would seem to be askew of the recent employment report for June...

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Shelton, The Fed, & The Realization Of A Liquidity Trap

Last week, President Trump nominated Judy Shelton to a board seat on the Federal Reserve. Shelton has been garnering a lot of “buzz” because of her outspoken and alternative stances, including “zero interest rates” and a “gold standard” for the U.S. dollar. But, Shelton is full of inconsistent and incongruous views on monetary policy. For instance, in 2017 she stated: “When governments manipulate exchange rates (by changing interest rates) to affect currency markets, they undermine the honest...

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Everything You Are Being Told About Saving & Investing Is Wrong – Part 3

This assumption on expanding inflationary pressures later in retirement is correct, however, it doesn’t take into account the issue of taxation. So, let’s adjust the chart and include not only the impact of inflation-adjusted returns but also taxation. The chart below adjusts the 8% return structure for inflation at 3% and also adjusts the withdrawal rate up for taxation at 25%. By adjusting the annualized rate of return for the impact of inflation and taxes, the life expectancy of a...

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