What about High yield bonds?

Another reader question prompted us to look out into the future (always a daunting task). One should always remember that what you are about to read is pure fiction at this point in time as opposed to editorial or news. Our crystal ball has been getting bad reception ever since cable became the preferred mode of mass communication in this country, so don’t put too awfully much credence into what you are about to read. Read more

U.S. Economic History and other Topics

A Quick Lesson on US Economic History
Prior to 1870’s, the US was largely an agrarian society with two-thirds of families living on farms and two-thirds or workers in agriculture. From the 1880’s to 1920 we were an emerging, industrializing nation with growth in manufacturing, mining, and other industrial sectors. We benefited from the Spanish-American War and World War I to slowly become a member of the developed nation club. Manufacturing was a greater and greater part of the economy. Once we got into World War II, the US became the number one economy since all of our potential competitors were essentially bombed back into the Bronze Age. There is a reason that most economists only refer to things ‘since World War II’ because our world changed pretty dramatically after that war. The US was the only extant industrial power for about five years after the war. We have never completely surrendered the title of world’s largest economy, though we may forfeit it here someday. Even in our current state of consumerism, we are still the world’s number one manufacturer of a surprisingly long list of goods. Read more

It has been another tough month in the markets. I know that all of you are wondering “When will this all end?”

We have no illusions that it doesn’t feel awful today.  It feels foolish to keep money in stocks.  Recognize that these feelings are hardwired into our brains, the result of centuries of lessons of creating trends where none really exist.  Actually, the contrary is true.  Stocks are much more likely to rise in the year after they have fallen over 30%. Read more

Nobody knows for sure when it will all end. The one thing we do know for sure is that these are very stressful times for all of us.  It is hard to take a long term view and stay positive in this environment of raw fear and uncertainty.

The selling of the last two months has been surprising in its intensity, and may have challenged your assumptions about market risk in your portfolio. We have had conversations with lots of folks over the last months, and each has been different yet the same. How low will the market go? Will I have enough money for my retirement? Should I do something now? Read more

These last weeks have been brutal for investors. The wild market swings from day to day, from hour to hour, have been extremely difficult for all of us. Invested alongside of you in the very same investments I certainly feel your pain.  Even more so, I feel the pain in my professional life as I watch these markets test the resolve and financial plans of my clients.

As I write this article the decline in the stock market has been significant. As measured by the S&P 500 (a widely followed index for the US stock market) stocks were down just under 41% from their high on October 9, 2007. Amazingly, the bulk of this decline (22%) happened in the first two weeks of October, since September 30th, 2008, in the panic selling before the passage of the “rescue” package. Read more