Uncategorized

December 21, 2021

The Cobra Effect and Inflation

The Cobra Effect is an unintended consequence where unintended behavior is ignored, making a problem worse than it originally was. When Delhi India was under British rule in the late 1800s, Delhi was infested with Cobras. As a result, the British incentivized farmers and locals to kill cobras by paying them a bounty when they brought a dead cobra to them. This effort worked in the short-run, reducing the population of cobras in the area, but eventually it became hard to find cobras at all. Despite this, the people still wanted to make money from the bounty, and since there […]
December 6, 2021

TRUE Traits for Successful Investing

When it comes to investing, the big decisions are driven by how much money to have in stocks, bonds, and cash. TRUE’s Traits for successful investing are listed below to help you allocate your money based on your long-term plan. Trait #1: Try to have 4-6 months of cash on hand for emergencies. Trait #2: If you need the money in the next 12 months, then it should be in cash. If you need the money to start a business in the next year, there is no sense in risking this money in the stock or bond market. We recommend […]
July 30, 2020

When the S&P 500 is Really the S&P 5

One of the most perplexing aspects of our investment world is how market summaries you generally see on television and websites can mislead us about the health of the stock market. Today is an extreme case in point. Chances are, you have seen headlines telling us that the Nasdaq Composite index is up about 17% for the year, testing new highs every other day or so. The S&P 500 index is almost flat so far this year, but is not far from its late February high. The markets are moving ahead smoothly, or even robustly, right? As it turns out, most of the gains […]
July 9, 2020

The Economy and The Virus

A report from First Trust Advisors, L.P.: Not since the 1960s and 70s has the United States experienced social upheaval like it is experiencing today. We have protests (both peaceful and otherwise), and a massively divided political landscape. On top of that, we have a virus that is spreading across the country, creating fear and an acceptance of economic shutdowns. Originally, the scientists said we needed 15 days to slow the spread. These same scientists have consistently lengthened the time they believe keeping the economy relatively closed is a good idea. Yet, eventually, as the number of new cases of […]
July 4, 2020

A Tribute to America

Independence Day, July 4th, 2020 Ladies and Gentlemen, my name is the United States of America. I was born on July 4, 1776, conceived in freedom and liberty. That freedom has brought millions to my shores to cast their lot with me. It has also given human incentive its widest scope. Now, just 244 years later, I am a diverse, multilingual country that is bound together by a single language, English. The dominant language of the business world, of the Internet world, and the second language for most of the world. Who would have believed that 60% of the world’s […]
July 2, 2020

Not Locking Down

A report from First Trust Advisors, L.P.: A resurgence of new Coronavirus cases around the country has created uncertainty for investors. Stock markets fell last week, not because of the virus, but because investors fear another round of economy-killing, government-mandated lockdowns. We don’t expect that to happen, but when the government is involved, risks are definitely higher. After the peak in early April, the seven-day moving average for new cases bottomed on June 9 at 21,282. Since then, they’ve surged, hitting 39,662 per day in the seven days through yesterday. That’s an 86% increase in only 19 days. (Daily volatility […]