Tag: Economic

There are a lot of things to consider when making economic and financial decisions. You have to think about your current situation, your goals, your risk tolerance, and a host of other factors. But if you want to make sound decisions that will help you reach your financial goals, there are a few things you should keep in mind.

First, you need to have a clear understanding of your goals. What are you trying to achieve? Do you want to retire early? Save for a down payment on a house? Build up your emergency fund? Once you know your goals, you can start to develop a plan to reach them.

Second, you need to be realistic about your situation. Take a look at your income and expenses to get an idea of where you stand. Are you living within your means? Do you have any debt? If so, how much can you afford to pay each month? Answering these questions will help you develop a budget, which is an important tool for making sound financial decisions.

Third, you need to understand your risk tolerance. How much risk are you willing to take? This is important to know because it will affect your investment choices. If you’re not comfortable with risk, you may want to stick to less volatile investments, such as bonds or mutual funds. But if you’re willing to take on more risk, you may be able to earn higher returns by investing in stocks or other growth-oriented investments.

Fourth, you need to stay informed. Keep up with what’s going on in the economy and the financial markets. This will help you make better decisions about where to invest your money.

Making sound economic and financial decisions requires a bit of effort, but it’s worth it. By taking the time to understand your goals, assess your situation, and develop a plan, you can make decisions that will help you reach your financial goals.

There are a lot of factors to consider when trying to make good economic and financial decisions. You need to think about your current financial situation, your future goals, and the risks involved in any potential investment. You also need to be aware of the different economic indicators that can help you make informed decisions.

One of the most important things you can do is to develop a solid understanding of personal finance. This will give you the knowledge you need to make sound economic and financial decisions. You can learn about personal finance by taking courses, reading books, or talking to a financial advisor.

Another important factor to consider is your risk tolerance. Some people are willing to take more risks than others when it comes to their finances. This is something you need to think about when making any investment decision. You need to determine how much risk you are willing to take and then find investments that fit your risk tolerance.

When making economic and financial decisions, you also need to be aware of the different economic indicators. These indicators can help you understand the current economic conditions and make better decisions. Some of the most important indicators include gross domestic product (GDP), inflation, and unemployment.

Making sound economic and financial decisions is not always easy. However, if you take the time to educate yourself and understand the different factors involved, you can make better decisions.

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The world of finance is constantly evolving. New technologies and data sources are emerging all the time, which means that the landscape of financial research is constantly changing too.

That’s why it’s so important to stay up-to-date with the latest thinking in finance. And one of the best ways to do that is to read blogs written by leading finance researchers.

In this post, we round up some of the best finance blogs out there. These blogs cover a wide range of topics, from big-picture thinking on the future of finance to nitty-gritty details on the latest research findings.

If you want to stay ahead of the curve in finance, make sure to add these finance blogs to your reading list.

Top Finance Blogs

1. The Finance Professor

The Finance Professor is written by Stephen D. Simpson, a professor of finance at the University of Technology Sydney. Simpson’s blog is a great mix of practical advice and in-depth analysis, with a particular focus on investment strategies and portfolio management.

2. FT Alphaville

FT Alphaville is a blog from the team at the Financial Times, one of the world’s leading financial news sources. The blog covers a wide range of topics, from central banking to hedge funds, and is written in a lively and accessible style.

3. The Marginal Revolution

The Marginal Revolution is written by a team of economists, including Tyler Cowen and Alex Tabarrok. The blog covers a wide range of economic topics, with a particular focus on market design and the role of technology in the economy.

4. EconLog

EconLog is written by economists Bryan Caplan and David Henderson. The blog covers a wide range of economic topics, with a particular focus on libertarianism and Austrian economics.

5. TheMoneyIllusion

TheMoneyIllusion is written by Scott Sumner, a professor of economics at Bentley University. The blog covers a wide range of topics, with a particular focus on monetary policy and the business cycle.

6. Free Exchange

Free Exchange is a blog from The Economist, one of the world’s leading sources of economic analysis. The blog covers a wide range of topics, from global trade to development economics.

7. The Reformed Broker

The Reformed Broker is written by Josh Brown, a financial advisor and commentator. The blog covers a wide range of topics, with a particular focus on the stock market and investing.

8. Credit Writedowns

Credit Writedowns is written by economist Mark Thoma. The blog covers a wide range of topics, with a particular focus on macroeconomics and the financial crisis.

9. The Big Picture

The Big Picture is written by Barry Ritholtz, a financial analyst and commentator. The blog covers a wide range of topics, with a particular focus on the stock market and the economy.

10. Baseline Scenario

Baseline Scenario is written by James Kwak, a professor of law at the University of Connecticut. The blog covers a wide range of topics, with a particular focus on the financial crisis and economic policy.

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Financial research is the process of identifying and analyzing financial data in order to make informed investment decisions. It is a critical part of the investment process, as it allows investors to assess the potential risks and rewards of an investment.

There are a number of different ways to conduct financial research. The most common method is to use financial news sources, such as CNBC or The Wall Street Journal. These sources provide up-to-date information on the latest financial news and events.

Another way to conduct financial research is to use financial data sources, such as Yahoo! Finance or Google Finance. These sources provide historical financial data, which can be used to identify trends and make forecasts.

Finally, investors can also use economic data sources, such as the Bureau of Labor Statistics or the Federal Reserve, to conduct financial research. These sources provide data on economic indicators, such as inflation and employment, which can be used to assess the health of the economy and make investment decisions.

Financial research is the process of acquiring and evaluating information about investments. It is a critical part of the investment process, as it helps investors make informed decisions about where to put their money.

There are many different ways to conduct financial research. One of the most important is to use a variety of reliable sources. This includes reading news articles, financial reports, and research from investment firms.

Another important part of financial research is to understand the risks and potential rewards of an investment. This involves analyzing the financial stability of a company and its industry, as well as considering the political and economic conditions of the country in which it operates.

Finally, it is also important to have a clear investment strategy. This will help to guide the research process and ensure that the information gathered is relevant to the investor’s goals.

Financial research can be a complex and time-consuming process. However, it is an essential part of the investment process and can help investors make informed decisions about where to put their money.

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Personal finance is the process of planning and managing your money to achieve personal economic satisfaction. The ultimate goal of personal finance is to create financial stability for yourself and your family.

There are a few key things to remember when it comes to personal finance. The first is to always live within your means. This means not spending more money than you have coming in. It sounds simple, but it can be difficult to stick to this rule when there are so many tempting things to buy. The second key is to save for a rainy day. This means setting aside money each month so that you have a cushion to fall back on in case of an emergency. The third key is to invest your money wisely. This means putting your money into savings accounts, stocks, or other investments that will grow over time.

Personal finance is all about making smart choices with your money. It’s important to remember that you are in control of your finances, and that you have the power to make choices that will improve your financial situation. With a little bit of planning and a lot of discipline, you can achieve financial success.

Personal finance is the process of planning and managing your personal finances. It includes budgeting, saving, investing, and spending. Personal finance also includes financial risk management and insurance.

Why is personal finance important?

Personal finance is important because it helps you to understand your financial situation and make informed decisions about your money. It also helps you to set financial goals and plan for your future.

How can I improve my personal finance?

There are a number of ways you can improve your personal finance. You can start by creating a budget and sticking to it. You can also save money by setting aside money each month into a savings account. Investing your money can also help you to grow your wealth over time. Finally, you can improve your financial literacy by reading books or articles about personal finance.

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During this pandemic, several countries gave policies in the economic fields to maintain the stability of the countries in the business and economic fields. One of them is in the field of domestic and foreign trade. The US government also took several policy steps to maintain economic stability in the trade sector. This policy was taken after considering several things to maintain business and economic stability in the country.

One very real policy is the inclusion of several Chinese companies on the blacklist. The company was included with the reasons behind everything. The US Commerce Department’s move marks the Trump administration’s latest effort to crack down on companies whose products can support China’s military activities. At the same time, punishing Beijing for its treatment of the Muslim minority.

The Reason

Courtesy : i.dailymail.co.uk/

Reporting from Reuters, the US Department of Commerce noted that Seven companies and 2 institutions were involved in human rights violations and violations carried out in the Chinese suppression campaign, arbitrary mass detention, forced labor, and high-tech surveillance of Uighurs. The blacklisted companies are companies that focus on artificial intelligence (AI) and face recognition, where US companies such as Nvidia Corp and Intel Corp have invested heavily in it.

The List Of The Companies

Among the blacklisted companies, the name NetPosa was called. NetPosa is one of the well-known AI companies in China, whose face recognition is associated with Muslim surveillance. Then there is Qihoo360, a large cybersecurity company that was expelled from Nasdaq in 2015. Qihoo360 recently made headlines because it claimed to have found evidence of a CIA hacking tool used to target China’s aviation sector.

Furthermore, a company called CloudMinds was also blacklisted. The company, which receives financial support from Softbank Group Corp, operates cloud-based services to run robots such as Pepper’s version, a humanoid robot capable of simple communication. In fact, CloudMinds has been blocked since last year for transferring technology or technical information from a US unit to its office in Beijing.

“Xilinx is aware of the recent addition of (the company to the blacklist) of the Department of Commerce. We are evaluating any potential business impact. We comply with the rules and regulations of the new US Department of Commerce,” the company said. “Xilinx is aware of the recent addition of (the company to the blacklist) of the Department of Commerce. We are evaluating any potential business impact.

We comply with the rules and regulations of the new US Department of Commerce,” the company said. For information, the US Department of Commerce’s actions followed a similar action that occurred in October 2019. At that time, the US included 28 Chinese public security bureaus and companies, including several start-up companies AI and video surveillance company Hikvision.

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Housing data released recently suggests that challenges to the housing industry still remain almost six years after prices plunged precipitating the Great Recession. New home sales in March collapsed 14.5% month-over-month to their lowest since July 2013. Pending home sales in February fell for the eighth time in eight months. Prices in most areas of the country are still well below their 2005-6 highs as diminished demand is putting the brakes on the housing recovery. Clearly significant challenges still remain that affect housing demand. Why is housing faring so poorly this far into the economic “recovery?”

Household formation has declined due to the weak recovery.

Many young adults are unable to find employment after college or high school.   A lack of quality jobs is causing some college grads to continue their schooling and or postpone marriage, thus delaying their first home purchase.  In fact, according to the NY Times, the number of households increased an average of 1.35 million a year in 2001 to 2006, compared to 569 thousand a year from 2007 to 2013.

Tough economic conditions have resulted in many families living under the same roof and made it hard for first time homebuyers to save for a down payment.

A record 13.6% of Americans aged 25-34 are living with their parents, (an increase of over 30% compared to the year 2000).  The lingering recession has also affected Baby Boomer living arrangements.  For the seven years through 2012, the number of Californians aged 50 to 64 who live in their parents’ homes swelled 67.6% to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development.

Many individuals cannot get a loan either due to poor credit or conservative bank lending standards.

Many business owners are wary of purchasing a home due to uncertainty regarding the economy and the Affordable Healthcare Act.

Baby Boomers are downsizing and or moving to multifamily housing.

In fact, much of the recent growth in housing has been due to strong performance in this sector.  Out of work Boomers and young adults unable to find employment are causing the US to increasingly become a renters’ society.

With prices still below the 2005-6 peaks homeowners are loathe to put their homes up for sale.

Perhaps, the American public is finally learning a valuable lesson about real estate. Your personal residence is not an investment in the traditional sense, as it does not throw off income and over the long term it has a poor rate of return that rarely beats inflation. In fact, the average annual price increase for U.S. homes from 1900 to 2012 was only 0.1%/year after inflation.

Due to extraordinary performance in the late ’90s and early to mid ’00s, many home buyers were lulled into thinking that their home was a piggy bank, an investment that was sure to go up indefinitely and that would never decline in value. This misinformed thinking resulted in homeowners (and investment bankers alike) allocating far too much of their assets to housing. An increasing proportion of household income was diverted to mortgages and other home expenses in lieu of investing in their retirement or college education. This resulted in a distortion of investment dollars and ultimately a bubble in home prices, which collapsed leading to the Great Recession. Our hot love affair with housing ended as most do, and now we are paying the price. The Federal Reserve has kept interest rates low to bring the magic back, to little avail.

Americans need to stop focusing on maximizing square footage; and instead, focus on more productive, higher return investments. For some perspective, according to the Milken Institute, middle class households in eleven Asian nations spend 16% on housing and transportation whereas the average middle class American homeowner spends roughly 50% of income on housing and transportation. Clearly, our priorities are out of alignment. We are putting a lot of eggs in one basket at the expense of saving for other goals like, retirement, college education, and healthcare costs.

In order for society to allocate investment dollars to productive endeavors that enhance economic growth, we need to rethink our love affair with real estate.

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We are now experiencing the fifth most powerful bull market in stocks since 1900. The Federal Reserve, through its quantitative easing program, has lowered interest rates to near zero, thereby forcing investors to search for income in nontraditional places. In response, dividend yielding stocks and high yield “junk” bonds have soared in price. If you review the trajectory of the S&P 500 over the past year, it appears that the market is advancing without any significant corrections.

The market continues to shrug off risks. Despite poor economic data, decelerating growth in China, still unresolved European debt woes, and increasing tensions between Russia and her neighbors, the market continues on its march upward. The only data the market seems to respond to are signals from the Federal Reserve that they may increase interest rates. For now, the stock market assumes that new Federal Reserve Chair Jerome Powell “has its back.” The dovish Powell appears to be an advocate of an accommodative policy through 2018.

Investors can become complacent believing that this pattern will last indefinitely. To wit, the flow of money into stock funds reached an all-time high in 2013-2017 as memories of the crisis of 2008 faded. The belief that market gains can be achieved consistently with no apparent risk of correction is not only naive, but dangerous. Investors in Bernie Madoff’s fund were likewise transfixed by the steady, impressive returns that seemed to move with no correlation to the financial markets. Sometime when things seem to be too good to be true…..
We only need to look back to the more recent examples of complacency and calls of “this time it’s different,” to remind ourselves of the dangers that can result from this mentality.

In the 2000 tech implosion, the market finally came to the reality that stocks with non-existent earnings and lofty prices were not necessarily a good buy. We were told that “earnings did not matter” and that this was “the new paradigm.”

In 2007, when everyone was buying second homes, flipping “spec” homes, and loading up on a McMansions they could not afford, the party line was that, “housing is an investment that never goes down in value.”  The financial crisis was created in part due to this mentality, and we are still feeling the painful repercussions.  In this article , Peter Schiff discusses the implications of the massive debt the US has incurred post 2008.  He states,

America is trying to borrow its way out of recession. We are creating debt now in order to push up prices and create the illusion of prosperity.

He opines further that:

 “The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed. It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood. As a result of this monetary “baby-proofing,” a strong economy is no longer considered necessary for rising stock and real estate prices.”

It is important for investors to remind themselves of the following:

Markets are cyclical

Corrections are normal consequence of business cycles:  We can’t predict when they will occur, but we should prepare mentally for their eventuality.

Market timing is extremely difficult.

Who would have predicted that in 2013 the S&P 500 would increase over 30%?  This occurred despite the debt ceiling and budget showdowns, sluggish economic growth, and other geopolitical events.  Few if any analysts, predicted this incredible performance, giving further credence to the notion that the so called “experts” are not particularly prescient.

Chasing performance can lead to pain

Investors have a tendency to pile into segments of the market that have recently performed well , buying more of the recent winners and eschewing the “dogs” that underperformed.  But short term performance is not indicative of longer term returns.  Overexposure to one asset class, say large-cap US stocks, will reduce your portfolios diversification, thereby increasing the overall volatility of your investment mix. Discipline in the form of rebalancing would be a better tactic. In this related article, Craig Israelsen discusses this behavioral tendency and how it can be avoided through proper diversification.

Looking at traditional measures of valuation, the current stock market is overvalued.  According to John Hussman, current valuations suggest that equities are poised to deliver paltry returns of roughly 2.3% before inflation over the next 10 years.  Even the Fed’s own Richard Fisher, president of the Federal Reserve Bank of Dallas, recently said he was concerned about “eye-popping levels” of some stock market metrics warning that the Fed must monitor the signs carefully to ensure bubbles were not forming.

In irrational times like this, it is important to maintain perspective; we don’t know exactly what the stock market will do in the short run.  We can’t control inflation, taxes, political turmoil, the weather, our health or major geopolitical events.  We must instead focus on the things we can control like the following:

Our emotions– It is essential that we have a portfolio of investments that we can stick with through thick and thin.

Review your investment policy statement that was prepared as part of you plan; and specifically; revisit the potential decline for your investments based on your target allocation to the stock market to see if it is still palatable

Rebalancing –After a large market advance, it is important to prune our winners and reinvest proceeds in losing asset classes.

Most recently, that would mean selling stocks and buying bonds. While this is counter to our  behavioral instincts, it is a powerful way to maximize long-range investment returns.

Costs–Given that future stock market returns are likely to be lower, costs becomes especially important.

Employing no-load, passive, low-cost funds and ETF’s will help maximize your gains.  The money you save due to low fees will compound for you over time.  This has an exponential effect on the growth of your portfolio.  Costs are reflected in your funds’  expense ratios.  Low cost investment advice helps to further reduce the overall cost of your investment management.

Diversification–resist the urge to follow performance and load up on yesterday’s star asset classes

Just because US stocks have been stellar performers doesn’t mean that this will continue. We never know in advance which portion of the portfolio will be the star performer. As this periodic table of asset class performance indicates, the stars of one year can easily turn to dogs the next. It is also important to remember that cash, CDs, and high-quality bonds, while they possess frustratingly low yields, are still an essential component of your portfolio, as they act as shock absorbers in periods of market turmoil.

Risk– if you’re planning to retire in the next five years or recent retiree, you may want to adjust your portfolio to position yourself more conservatively.

Recent studies suggest that minimizing your exposure to stocks, five years before and five years after retirement  and then increasing your stocks allocation slowly over time, may be a prudent way to maximize spending in retirement as well as avoid outliving your funds.

In summary, the market over the past few years may convince you that risk will be rewarded with little chance of loss. But remember, what goes up must go down, and invariably, a tipping point emerges that changes the course of the market.  History does repeat itself.  Be realistic and stick to a prudent plan so you are well equipped to weather any market storm.

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A larger fraction of Americans consider their financial state to be better than it was a year ago, according to a recent Gallup poll. This is the first time in five years that the share of people who think themselves better off is higher than the amount of people thinking themselves worse off.

Improving Sentiment  

Data provided by the survey reveals that 38 percent of American participants think they are in better shape than one year ago, compared to 34 percent who think their situation has deteriorated. The fraction of people who believe things have improved is at its highest since October 2007. Comparatively, 26 percent state they their situation is unchanged.

“Right now it’s a more or less a dead heat,” Greg McBride, senior financial analyst at personal finance information website Bankrate.com, told U.S. News and World Report. “We’ve seen some improvement given stronger stock market performance, the turn in the housing market, and better news on the job front.”

The recent Gallup poll figures represent a substantial improvement from 2008, when 54 percent of participants said that their situation had deteriorated from the prior year. The following year also created a majority of respondents who felt worse off.

Gallup provided the same survey in May 2012, when 37 percent said their situation was better.

The media outlet reports that two-thirds of consumers predict that they will be in a better place financially one year in the future than they are currently. The fraction of people with this expectation has previously declined to as low as 52 percent during the summer of 2008, as market participants were impacted by the financial crisis and widespread economic challenges.

Economic Predictions  

The U.S. economy will increase its rate of expansion to grow 2.3 percent in 2013, according to the median estimate of economists participating in a USA Today poll. A total of 48 of these market experts contributed to the survey. Their forecast for next year’s growth is higher than the 1.5 percent that was experienced during the first half of 2012.

In addition, close to two-thirds of those economists expect that the fiscal cliff will be resolved without providing the economy with significant headwinds.

The economic confidence of many market observers has been bolstered in recent weeks as central banks across the world announced plans to provide further stimulus to the global economy through monetary easing.

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