RECENT ARTICLES

Are Equities Over-Owned By Households?

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Reading Time: 5 minutes Let’s be clear, there are valuation metrics, principally the CAPE ratio, which show equity prices in June 2018 are expensive. However, that doesn’t mean you need to mislead by other false bearish narratives. Stocks can have low long term returns and there can also be wrong bearish arguments. We care…CONTINUE READING

Trade War: A Position Of Strength For…

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Reading Time: 5 minutes The ongoing trade war is one of the biggest stories in finance this year as President Trump tries to lower the US trade deficit through tariffs. One of the most interesting factors of this situation when it comes to stocks is many investors and economists believe it is mostly rhetoric,…CONTINUE READING

Real Wage Growth Usually Weak Before Recessions

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Reading Time: 5 minutes There are many stories in the financial press about how wage growth is accelerating as the labor market tightens. It’s important to contextualize these claims. Nominal wage growth is accelerating as seen in the hourly earnings growth and the weekly earnings growth. The Employment Cost Index, which measures wages and…CONTINUE READING

What’s Really Driving Markets & Economic Growth?

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Reading Time: 5 minutes Earnings growth is much more important than the financial media gives it credit. There are often stories about geopolitics, while there few about the rate of change of analysts’ estimates outside the reporting season. The true driver of equity performance, which is future earnings estimates, are very boring and are…CONTINUE READING

Avoid Investing Based On False Premises

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Reading Time: 5 minutes Surprisingly, there are popular bearish narratives even as the stock market is a few percentage points away from its all-time high and the economy is in one of the greatest quarters of this expansion. Since there are popular bearish narratives, there are myths for us to bust on the bearish…CONTINUE READING

Is This As Good As It Gets For Growth?

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Reading Time: 5 minutes The U.S. economy continues to show signs that the Q2 GDP growth rate might be above 4% which would be one of the best quarters of this expansion. If this rate were to continue, what some consider impossible would be happening. The bears say this is just a late cycle…CONTINUE READING

Fed Funds Guidance Changed

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Reading Time: 5 minutes Previously, we’ve mentioned that inflation is important to study when the economy is late in the cycle because the Fed starts to take away the punch bowl. When the Fed raises rates, lending tightens, and the economy starts to falter. Following the logic of that point, clearly the Fed policy…CONTINUE READING

Is The Economy Overheating?

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Reading Time: 6 minutes Near the end of the business cycle the most important factor to consider is whether inflation is getting out of control. The Fed’s goal is to have 2% year over year core PCE. The Fed likes to raise rates ahead of the goal being reached because once inflation accelerates, it’s…CONTINUE READING

Small Banks Are Disappearing

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Reading Time: 4 minutes There is a natural fear that if the economy isn’t regulated, risks will occur which can hurt bystanders. For example, people fear that if the banks aren’t regulated, then they will make risky loans and go bankrupt. However, if banks are allowed to operate in their best interest, many will…CONTINUE READING

Investing & Budgeting: Are High Paying Jobs Enough?

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Reading Time: 5 minutes In this article we are reviewing various career scenarios and how that could impact your decision making as it relates to budgeting and investing. While your career is often the most important component of your financial well-being, it can also be an aspect of your life that you have the least…CONTINUE READING

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