Retail investors are in love with dividends more than they should be with significant fan followings and discussion forums online dedicated to the worship of dividend stocks. Clearly, dividends are seen as important because public companies love to brag about how consistent their dividend payments have been and how much they’ve raised them. Dividends are
MoreThe Fed funds rate is a hotly debated topic because it’s the main policy tool the Fed uses. There is economic data which can be interpreted to support every argument. Furthermore, after the metrics are taken into account, the goals are subject to interpretation. Just because the core inflation rate goes above 2%, doesn’t mean
MoreIn the financial media, it’s easy to see what the economists and analysts think about the current economy because usually they propose more of the same when asked about the future. It’s simple to extend the current trend indefinitely, but that’s not always a good idea, nor is it realistic. Even during economic expansions, there
MoreThe purpose of this article is to objectively examine trade policy and its impact on the economy. While there will be discussion of government policy, our review is not negatively nor positively inclined towards any particular administration. During the presidential campaign trail, then Candidate Trump stated that he’d renegotiate trade deals to stop other countries
MoreOne of the biggest generational differences which causes a disconnect between baby boomers and millennials is student debt. Many baby boomers are confused why college graduates don’t immediately move out of their parents’ house like baby boomers did. The issue is that once a student graduates, they become debtors. It’s a vicious cycle which turns
MoreInvestors are trying to get a reading on where inflation will go in the next 12 months because it’s a key variable for forecasting asset prices and the Fed funds rate. As you can see from the chart below, the year over year core CPI will hit near 2.5% in late 2018 if the month
MoreWe’re going to dedicate another article to re-discovering the relationship between the 10 year bond and the stock market. With bond yields skyrocketing in the 4th quarter of 2017 and the first 2 months of 2018, it’s more important now than ever to understand the relationship. The confusing aspect, which started during the correction in
MoreSome analysts speculated if the Fed would try to keep rates low to support the government’s spending binge. However, instead of worrying about the debt, the $400 billion spending plan and the tax cuts are being used as an excuse to raise interest rates and let the government bonds on the Fed’s balance sheet expire.
MoreWith the first stock market correction in over a year, having occurred in early February, there were many media narratives about what caused the selloff. We think it was driven by the unwind of the short VIX trade. Buying protection wasn’t considered important with the VIX at record lows in 2017. However, when nobody thinks
MoreWe’ve discussed the price to income ratio of housing in a previous article. This gave us an idea of how expensive housing has become. We’ll discuss some of best points why real estate is too expensive and then provide the counterpoint explaining why housing isn’t in a bubble.
MoreIn January, the ECB tapered its bond buying from €60 billion per month to €30 billion per month. Equally as important, the central bank is expected to stop its bond buying completely by September 2018. European economic growth has accelerated recently, but it’s unclear how much the economy was helped by the QE and how
MoreThere are many ways to measure market cycles and the business cycle, however economics is not an exact science. One of the methods that can be used alongside measuring of the yield curve is the output gap. The output gap is the difference between actual and potential economic production. It allows economists and investors to
MoreEarnings are the biggest driver of stock prices and valuation. This doesn’t imply companies are the sole determinants of their stock prices. Issues like geopolitics, the weather, and the economy get filed under systematic risk factors. These are the factors that are talked about in the news so much because they apply to all companies.
MoreValuation is the method of determining what an asset is worth. The price, on any given day of a stock, is how the market is valuing that asset. Your ability to look at various metrics when coming up with a valuation will determine if you can do a better job than the market at determining
MoreAs with seemingly every election cycle, tax reform is a hot topic, as though a carrot that dangles in front of the horse. Whether you’re in favor of larger or smaller taxes, its a discussion that is important to have. The goal of this preliminary tax discussion is to separate the narrative from the reality. With
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