Monthly Archives - July 2018

gold and silver

Are Gold and Stocks Really Negatively Correlated?

In investment circles it’s common to hear that stocks and gold are negatively correlated. That is to say, gold’s price increases when stock prices decrease, and vice versa. That’s why you’ll often hear the recommendation to sell stocks and invest in gold when stocks are doing poorly, and to sell gold and buy stocks when stock markets are doing well. But is it really true that the two are negatively correlated? And if so, is it really a good [...]

trump monetary policy

President Trump’s Comments on Interest Rates Don’t Bode Well for the Economy

President Trump recently took on the Federal Reserve’s conduct of monetary policy, although not in a good way. Rather than criticizing the Fed for keeping interest rates too low for too long, he criticized the Fed for raising interest rates, complaining that in so doing the Fed has taken away America’s competitive edge against China and is erasing all the gains the economy has made due to the Trump administration’s economic policies. It’s no secret that the Fed throughout history [...]

federal reserve

What Will the Federal Reserve Do Next?

Last week’s hearing with Federal Reserve Chairman Jerome Powell doesn’t inspire confidence that the Fed knows what it is doing. Much attention has been focused recently on the yield curve, the spread between 2-year and 10-year Treasury securities, which has become increasingly narrow in recent weeks. The spread is becoming so close, in fact, that it risks inversion, with interest rates on 2-year bonds exceeding that of 10-year bonds. Every time that has happened in recent history, economic recession [...]

retirement plan

Periodic Versus Lump Sum Investing: The Importance of Timing

It’s time once again to discuss the importance of timing when it comes to investing. Timing plays a role in investing success whether we like it or not, and it affects investing strategies. Because of that, your investing strategy may need to change depending on whether you’ve got a lump sum of money to invest or whether you intend to invest on a periodic basis. You hear a lot of commentary about how just a little bit of money invested [...]


Will the Yield Curve Indicate a Recession Once Again?

One key indicator of the economy’s health that economists and financial market observers look at is the yield curve. In particular, they look at the spread between the yield on 2-year Treasury bonds and 10-year Treasury bonds. As the difference between the yield on those two maturities narrows, the yield curve is said to be flattening. And in some cases the yield on the 2-year bond exceeds that of the 10-year bond, in which case the yield curve is [...]


Job Growth Seems Strong, But How Does That Reflect on the Economy?

There’s a tendency, when looking at economic data, to look at aggregate measures and use them as proxies to determine the health of the economy. When looking at job numbers, for example, it’s tempting to look at figures for the total number of jobs, number of employment openings, and the unemployment rate to figure out how healthy the economy is. If you do that, you’d figure that the economy is pretty healthy right now. The unemployment rate is at a [...]

passive income

Passive Investing Doesn’t Mean Being a Passive Investor

One of the most popular investing strategies today, and one that’s growing more popular all the time, is passive investing. It’s a strategy that focuses on investing in low-cost funds that track popular stock indices, such as the S&P 500, the Russell 2000, the Wilshire 5000, etc. Rather than trying to beat markets through active stock-picking, the passive funds merely try to match the performance of markets. Many advocates of passive investing also urge investors to maintain a buy [...]


The Founders Had It Right When It Comes to Gold and Silver

Last week marked the 242nd anniversary of the signing of the Declaration of Independence, which began one of the greatest experiments in liberty the world has ever seen. But while we can see with hindsight how successful the American Revolution was, there were a number of times when it came perilously close to failure. Learning their lesson, the Founding Fathers sought to create a Constitution that would ensure that those mistakes would never be repeated. One of the primary reasons [...]