The Modern Investor
Written by Human Advisors, for Human Investors
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Investors React to Election with Big Stock Market Gains. What Can We Learn from the Previous Election?
The U.S. stock market responded to Tuesday’s election with big gains. International stocks fell, as did bonds. What does this mean, if anything, about what we can expect for the next four years?
We looked at how markets behaved following 2020’s election. Keep in mind, our economy is complex and markets react to a wide variety of inputs. Elections and government leadership are just part of the puzzle.
The Fed Cut Rates. What Comes Next?
September may have marked the beginning of the newest cycle in which the Federal Reserve cuts rates. Short-term rates continued to fall in every prior period. But changes in longer-term rates have been more muted and more challenging to predict.
The impact from rate cuts will likely depend on one’s perspective. Falling short-term interest rates are likely to impact savers, investors, and borrowers differently.
Interest Rates Are About to Fall: Should You Act?
August’s Rough Start: A Few Thoughts
If market action from the first week of August and the corresponding headlines gave you anxiety, you are not alone. But that alone does not mean you need to make dramatic changes. If you have not already done so, I would suggest revisiting your plan. Review how much risk, intended or otherwise, you are taking with your investments. And, if nothing else has changed, it may be time to recommit to your long-term goals.
Update from the First Half(ish) of 2024
How to Beat Inflation
One of the biggest threats we all face is inflation. We recently wrote about how it can destroy returns on cash investments. Fortunately, the inflation puzzle has historically had a relatively simple solution: invest.
Where Will Interest Rates Go Next?
There was a 50% chance rates would be cut by 1.5% this year, all the way to the 3.50% to 3.75% range.
At the same time, the idea of rates remaining high (or even rising) seemed improbable, to say the least. Fast forward to today. The current odds that the lower end of the Fed Funds target range will be 5.0% or higher by the end of the year is basically a 1-to-1 coin flip.
Consider this another example of just how quickly expectations about interest rates can change.
Looking Past the S&P 500: Is Everything at All-Time Highs?
If you are reading this, the odds are high that you don’t have 100% of your investable assets in an index fund tracking the S&P 500. You probably own other types of investments. So, what about smaller companies? Or foreign companies? Or other asset classes? Are they also at all-time highs? It turns out other pockets have not participated in this run, at least not to the same degree.
Bitcoin ETFs: Should You Own One?
Investors have a new way to invest in the cryptocurrency that is regulated, transparent, and relatively accessible. Now what?
The Best Investments from 2023
Every once in a while, we feel the need to be less serious and write about something that is purely entertaining (well, for us nerds, anyway). This post should be treated as such. Pure entertainment. Nothing actionable. Absolutely no advice. To that end, here are the best investments of 2023.
Small Companies. Small Returns?
Traditional theory suggests investors should earn higher returns in riskier investments, like small caps. However, small cap stocks have underperformed large caps for more than a decade. And they have even underperformed bigger, more stable stocks since the late 1970s. Which begs the question: why own smaller, riskier companies if we aren’t earning higher returns?
Is the Market Flashing Caution Signs? Three Observations
Investors in “balanced” portfolios just had their second-best start to a year since 2001. At the same time, cash is cool again for millions of investors. Considering the rebound in stock and bond prices this year, here are three observations for people considering moving from cash back into stocks and bonds.
Three Things 2023’s Best Stocks Have in Common
The SP 500 is comprised of (roughly) 500 stocks, and it’s up about 15% in 2023. Yet, it would be down this year if not for these 30 companies.
How Am I Doing? Keep a Long-term Perspective When Evaluating Investment Performance.
Investors often ask, “How am I doing?” The answer may require a little color, and benchmarks can help frame the conversation. Regular review of risks and returns can help keep investment portfolios aimed at achieving long-term goals.
Why I Had a Tax Surprise, and How I Hope to Avoid it in the Future
Want more control over taxes? Here are some considerations for those investors with significant assets in taxable accounts.
What Should I Do With My 401(k)?
Target-date funds have grown in popularity for retirement savers. And for good reason. But are they the right answer for everyone? See where it might make sense to consider a more tailored approach to allocating retirement plan assets.
Are Stocks Ugly?
Are stocks as unappealing today as they have been in 15 years? By one measure, the answer may be yes. Still, stock investors may be well-served to focus on the long-term.
The Fed Might Be Finished Raising Rates. Should You Sell Stocks?
Should you sell stocks if the Fed is finished raising rates? Here are a few things you may want to consider.
What A Start
Will the strong start to 2023 continue for international stocks?
