A familiar refrain from athletes and their trainers is, “no pain no gain! That quote may ring true in the field of fitness and athletic endeavors, it is certainly not the case in the world of finance. In fact, we’ve just come off more than a decade of all gain with very little pain. Is… Read more »
It should come as no secret to investors that bear markets (a decline of 20% or more from a previous high in the stock market) occur with random regularity. They are the price that investors pay for the long term superiority of stock returns over most other asset classes. During the euphoria of bull… Read more »
Nobody likes to see their retirement savings dwindle during a pullback in the market. However, for those on the cusp of retirement or just settling in, downturns in the market can pose an extra threat to their overall financial security. Research has shown that particular care needs to be taken during bear markets for… Read more »
Update: Congress reached a deal in early October to raise the debt ceiling through December. While this action avoided the first-ever default of U.S. debt, it merely kicked the can down the road. Democrats and Republicans remain very far apart on a longer-term solution. The U.S. faced a debt ceiling crisis very similar to… Read more »
The S&P 500 is currently sitting at a new all-time high. The index is up more than 20% this year, after gains of 18% and 31% the last two years. Not bad. We haven’t even had a correction of more than 5% since last November. It’s never been a better (or easier) time to be… Read more »
Spending what they don’t have works for politicians at the national level (who don’t need to balance a budget). Cutting taxes and/or increasing spending brings home the bacon and provides job security. History is instructive in this regard. Ronald Reagan increased the national debt by 186% while in office, percentage wise higher than debt… Read more »
The term “overview effect” was coined in 1987 by author Frank White to describe the intense awe astronauts feel when viewing the earth from space. Astronauts report viewing the earth as incredibly “fragile” and have been documented to see the earth (and life itself) differently upon their return, wanting to protect the earth (and all… Read more »
President Biden has just announced his proposal for increasing long-term capital gains tax rates (as part of his American Families Plan). The long-term capital gains rate applies to realized gains on stocks held for at least one year, and is currently lower than the tax rate for ordinary income (or wages). For instance, the… Read more »
Have you ever experienced playing with the “house’s money” at a casino? You’re on a hot streak and are willing to take on more risk because you view your winnings as not your money, but the house’s money. Psychologically, it doesn’t feel like it’s yours to lose! The “house money effect,” or “mental accounting”… Read more »
