We should not have been surprised by the past year’s rampant inflation in the wake of Covid-related blowout government spending and consequent increases in the money supply. Milton Friedman (1976 Economics Nobel Laureate) warned about this long ago.
Interest rates are up, and asset prices are down. However, the present value of your future retirement liabilities (spending needs) is also down, probably down more than the value of your retirement nest egg. This means that in nearly all cases, retirement investors have better coverage of future retirement liabilities than they did on January 1!
Short-term Treasury Inflation-Protected Securities (TIPS) are a safe-haven investment in this turbulent market. They have no credit risk, no inflation risk, and very little interest rate risk.
Fed tightening has put a stop to any stock market advance. Monetary policy is likely to determine stock prices for at least several more months. Watch carefully.
Treasury I-Bonds are paying 9.62% until November 1, 2022! You can only buy up to $10,000 worth each year ($20,000 for a couple), so act now to fill your 2022 order, and then in January 2023 buy another $10,000 each. It’s a slam-dunk fixed income winner!
Tax filing season often focuses minds on tax-efficient investing. Municipal bond funds may be one way to control taxes, but they are only attractive for high tax bracket investors. This article will tell you if they are right for you.
VanEck Steel ETF (SLX) his historically done a good job of hedging inflation. Using factor analysis, we project a very high near-term return for this ETF based upon its value, momentum, quality, and sentiment characteristics.
The objective evidence in support of investing in low-cost, passively-managed funds rather than actively managed funds is overwhelming. I review the most widely respected academic studies on the subject.
Tax-efficient asset location (or asset placement) can add .20% to .75% to after-tax returns every year.
Up to a point, higher yield can imply attractive value. But really huge yields come with outsized risks. If you invest naively based on yield without understand or analyzing the risks, you can get burned. QYLD, with a yield of 10%-12%, is a case in point.