Bear or Bottom

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Whenever the market hits the official correction level — a 10% drop, the question becomes, is this the start of a true bear market or is this just a correction bottom and now is it time to buy? Historically corrections happen 2-3 times a year we should be used to this, right?

I came across this chart the other day. It is parsing market activity down to daily volatility. This is looking at when markets drop 4% or more, in a day, and then rebounds in the same day to end positive. This happened last week, on Monday, January 24, 2022.

Investing in a Bearish World – What to Do?

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The most frequently asked question I get, regardless of the economic outlook, the political party holding power, the market up or the market down, is, "I think the bottom is going to drop out, how do I protect my portfolio?"

While there may be many philosophies to accomplish this, they all really boil down to three strategies.

The Biden Tax Changes – Unintended Consequences

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The Biden tax plan is intended to raise taxes to pay for the significant expenditures the Administration is proposing. These changes include:

Increase in Income Tax Rate for High Earners: The Administration wants to increase the top marginal individual income tax rate from 37% to 39.6% effective in 2022.  

What is Transitory Inflation?

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The financial and national media have finally latched onto inflation as the topic du jour. Typical. Lumber prices have dropped 22% in the last few weeks.

Random Thoughts on the New Spending

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The government has passed a $1.9 TRILLION spending bill, without much reason to do so. Other than to give away money. Fourth-quarter GDP was just announced to be up 4.4%, one of the strongest reads in years. The last jobs report shows a significant drop in new jobless claims. Sure $500 billion for extended unemployment and small business relief would have really helped a lot of people, but $1.9 trillion of newly borrowed money, in an economic expansion? 

Irrational Exuberance, or Just Stupid?

I’ve received more questions about the activity in GameStop (GME) than any other stock in over 30 years in the business. Simply put, GME is a company floundering near bankruptcy. A large number of individual investors following a Reddit post decided to start buying up the stock. GME is a heavily “shorted” stock by many professional investors, meaning they make money if the stock goes lower, ideally for them into bankruptcy. By bidding the price higher, the Reddit followers were creating losses for these professionals, many of whom had to buy the stock to close out their short positions.

The Good, the Bad, and the Ugly — Our 2021 Outlook

First my apologies for this being our blog of 2021, a full month into the new year. While we have been very busy since late December here at the office, the real reason I’ve procrastinated is that every time I start writing, something new happens that makes me question my outlook.

How to be a Millionaire, Part I

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There are more than 20 million people in the U.S. with enough assets to fit the definition of a millionaire, according to a 2020 study by Credit Suisse. Chris Hogan, radio host and author of the book “Everyday Millionaires,” surveyed more than 10,000 of those wealthy individuals to figure out their secret to success.

I thought I’d share some of his findings in our blog post.

2020 – Mid Year Outlook and Perspective

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It’s been a crazy couple of months for the stock market. After falling into the fastest bear market in history in February, the S&P 500 is back near all-time highs. And that’s despite Q1 earnings for the index cratering 66%, one of the worst showings in its history.

Rally Under Way?

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For those that are totally confused about the market's continued climb, despite the headlines and negative economic news, please read and take to heart the following quote:

"There is nothing more important to the markets than what the Fed is doing and is going to do. Nothing. This is applicable to both the bond and equity markets and to all classes of risk assets. When you are the only American institution allowed to print money then you are the only American institution that cannot be denied and so today, I focus on what these people are doing."