Compound interest was described as the greatest mathematical discovery of all time by Albert Einstein. Compound interest “Tis the stone that will turn all of your lead into gold,” according to Benjamin Franklin. The late great Richard Russell explained compound interest as the royal road to riches. Below I'll explain this powerful investment tool and show you how to read a compound interest table. Compound interest is the heart and soul of investing. Investors lacking a solid grounding in compounding are more likely to suffer from a wandering eye. They can be inclined to favor Hail Mary … [Read more...]
How Much More Are Stocks Really Worth when Rates Are Low?
Gary Shilling warns against overpaying for stocks simply because rates are low. In piece for Bloomberg, he explains that investors "tend to be overly enthusiastic at business cycle peaks when corporate cash is plentiful and purchase their shares at high prices." He writes: U.S. stocks are expensive by historical standards, and the bulls try to justify current valuations by pointing to extremely low levels of interest rates. There are a number of reasons why that’s no reason to pay sky-high prices relative to profits. With companies preparing to start reporting results for the third … [Read more...]
Patience Turns Out to Have a Silver Lining
Over the last year, silver investors who had the patience to hold have found themselves better off than those investing in a S&P 500 index. … [Read more...]
Caution: Returns in the Rearview May Be Closer than They Appear
Many investor presentations and fund brochures focus on three year returns. But without a bear market since 2009, how can investors see how a fund handles volatile markets using three year returns? Past returns can never predict the future, but an investor can learn something about the resilience of a fund manger's strategy by examining how the fund performed in past times of turbulence. John Coumarianos suggests using 15 year returns for fund analysis today, so investors can see an entire cycle included. The future ain’t what it used to be, Yogi Berra said. But now, when it comes to … [Read more...]
Is Gold a Good Long-term Investment?
Since President Nixon closed the gold window in August of 1971, the price of gold has increased more than 37-fold. From a price of $40.65 at month-end August 1971, gold has risen to $1,528 today. A $1,000 investment in gold at the end of August 1971 would be worth over $37,000 today—a compounded annual return of 7.8%. How Does Gold’s Return Compare to Stocks and Bonds? Gold’s 7.8% return since August of 1971 compares favorably to the 7.4% return that intermediate-term U.S. Treasury securities delivered over the same time. More surprising to some is that gold has even appreciated more than … [Read more...]
“Lower Rates Aren’t Working”
At MarketWatch, Peter Morici says it's crazy for Fed Chairman Jerome Powell and ECB President Mario Draghi to consider taking rates negative, or further negative, as it's clear that lower rates aren't working. Morici writes: If the definition of insanity is to do the same thing over and over and expect a different result, then outgoing European Central Bank President Mario Draghi and Federal Reserve Chairman Jerome Powell, judged by their recent decisions to further ease monetary policy, may be going bats. However, the real prize should go to President Donald Trump. Both central bankers … [Read more...]
Recession in a Year? CFOs Think So
According to the Duke University/CFO Global Business Outlook a majority of CFOs see a recession coming within a year. William Edwards reports for Bloomberg: More than half of U.S. chief financial officers anticipate the economy will be in a recession within a year, with optimism at its weakest point since 2016 as deteriorating prospects for earnings and difficulty finding qualified workers weighed on companies. Some 53% expect the economy will be in a downturn by the third quarter of 2020, while 67% see a recession occurring by the end of that year, according to the Duke University/CFO … [Read more...]
Amazon Suffers Internal Battle over Search Result Manipulation
Executives at Amazon have come under scrutiny for search results that appear to favor Amazon's own products and more profitable products over those the customer is actually looking for. Dana Mattioli reports in The Wall Street Journal that retail managers fought for years with the company's algorithm team to give Amazon's favored products special treatment. She writes: Customers often believe that search algorithms are neutral and objective, and that results from their queries are the most relevant listings. Executives from Amazon’s retail divisions have frequently pressured the engineers … [Read more...]
Attacks on Saudi Oil More Likely to Hurt China than the U.S.
The U.S. economy may be better prepared than China's to handle any disruptions in energy supplies caused by the recent attacks on Saudi oil facilities, according to David Harrison at The Wall Street Journal. He writes: Where surging oil prices would do the most damage is in countries that rely on energy imports, such as China and Japan, the world’s second- and third-largest economies after the U.S. China produces roughly 4.8 million barrels of oil a day but consumes about 12.8 million, according to the EIA, which makes it heavily dependent on oil imports. China’s economy has already … [Read more...]
Is Sheltering in Munis a Safe Bet for Investors Bitten by SALT Caps?
Many investors seeking to avoid the pain caused by caps on deductions for state and local taxes are putting money in muni funds. But is that the best decision? Reporting by Heather Gillers and Richard Rubin at The Wall Street Journal suggests that it may not be. They write: To get higher yields that are tax-free in California, some investors are pushing deeper into riskier municipal debt such as bonds issued for charter schools, nursing homes and real-estate development projects. Governments confer their tax-exempt borrowing power on those entities because they are seen to spur economic … [Read more...]
- « Previous Page
- 1
- …
- 86
- 87
- 88
- 89
- 90
- …
- 218
- Next Page »