Featured

Time for Risk Management

Whether you’re trying to decide how to invest or considering the prospects for a better job, the economic outlook has never been more confusing. Yes, the economy is doing well right now, despite the disruptions of tariffs and uncertainty over global growth. And certainly the stock market, hovering at record highs, encourages optimism.

But both the stock market and the economy have now set records, for the longest bull market and the longest period of economic growth. The current 10-year upswing shows no signs of abating, but have we truly repealed the laws of economic cycles? Or will there be an “opposite and equal” reaction ahead, setting up a devastating decline?

No one really knows the answer to that question. But given the historic odds, you might want to consider your own personal situation and hedge your bets. Yes, I’ve been saying that for the past two years, but the advice still holds. The worst thing you can do is become complacent and ignore your financial vulnerabilities.

According to Jim Stack of InvesTech Research (Investech.com), every bear market of the last 100 years has taken back almost 50 percent of investors’ gains. And one-third of the bear markets since 1933 took back ALL of investors’ bull market gains! That’s a good reason to assess the current situation.

A Peace Dividend

Long-time investors remember the term “peace dividend” from the Vietnam War era. But today the concept of a peace dividend is being applied to world trade in the Trump era. Instead of shooting wars, we have been in a trade war — one that has hurt our farmers, many manufacturers and consumers. The prospect of a trade deal creates a belief that growth will resume globally, benefiting all trading partners.

Based on resumed trade negotiations, interest rates ticked up slightly reflecting potential demand for capital investment, oil prices moved sharply higher, and gold — which benefits from fear — slid back below $1,400 an ounce after registering an 8% gain for the second quarter. The stock market soared.

With unemployment at record lows, plenty of unfilled jobs, mortgage rates favoring homebuyers and 401(k) retirement accounts bulging with profits, why worry?

Some Nagging Concerns

In the midst of general euphoria, it takes a real nay-sayer to pick out the worrisome details of the markets and the economy. But they exist.

For example, short-term Treasury bill rates remain persistently if slightly higher than long-term rates. That is, rates on three-month Treasury bills are yielding more than 10-year Treasury notes. That’s called an “inversion of the yield curve” — a situation that has preceded every recent recession by about 18 months. Of course, the hope is that the Fed will cut short-term interest rates, reversing this situation. But the resumption of global trade and growth makes a rate cut less and less likely.

There are other economic worries. Mortgage rates remain favorable, but housing prices around the country have far outstripped inflation, making home ownership less affordable despite low mortgage rates. Consumer confidence has started to decline, and one-third of consumers have cut back on spending, according to a new CNBC survey.

Risk Management, Not Market Timing

If it were easy to call the tops and bottoms, everyone would make a fortune in the stock market and no one would ever lose money. But being sensible about your own financial situation has nothing to do with market timing. It is all about managing risk exposure.

If you’re just starting out, a plan of regular investing — regardless of market headlines — is a winning strategy over the long run of at least 20 years. But if you’re approaching retirement, you simply can’t afford to lose most of your nest egg, or even half of it! Consider those possibilities now. Move a significant percentage of your assets to the safety of Treasury bills or Treasury money funds.

That strategy won’t make you rich, but it surely will keep you from selling in a panic when the market is making headline declines.

(Article written by Terry Savage)

(SOURCE: TCA)



Source link

health news headlines provided courtesy of Medical News Today.

Advertisement

Advertisement Small

Follow Me

Collaboratively harness market-driven processes whereas resource-leveling internal or "organic" sources. Competently formulate.

View More Job Search Results

Calendar

September 2019
M T W T F S S
« Aug    
 1
2345678
9101112131415
16171819202122
23242526272829
30  

Pages

Recent Comments

    RSS Meks Blog

    • 13 best headline & blog title generator tools to easily boost your SEO September 12, 2019
      Ready to increase traffic to your website today? Use these headline generator tools and improve your click-through-rates! The post 13 best headline & blog title generator tools to easily boost your SEO appeared first on Meks.
      Ivana Cirkovic
    • How to create a Facebook Page for your blog (plus PRO tips) September 4, 2019
      Wondering how to create a Facebook Page for your blog knowing that you really do need one? Follow our in depth guide and learn how to create and manage attractive and successful Facebook Page! The post How to create a Facebook Page for your blog (plus PRO tips) appeared first on Meks.
      Ivana Cirkovic
    • Beginners guide on how to redirect a page in WordPress August 29, 2019
      Whether you’re trying to redirect a page in WordPress or just want to discover and understand why it’s important, use this guide to help you get ahead of it and learn all there is to it. The post Beginners guide on how to redirect a page in WordPress appeared first on Meks.
      Ivana Cirkovic
    • The best Facebook Groups for SEO to improve your knowledge and rankings August 21, 2019
      Are you tired of searching for the best Facebook groups for SEO to improve your knowledge and learn about the tricks from the trade? The post The best Facebook Groups for SEO to improve your knowledge and rankings appeared first on Meks.
      Ivana Cirkovic
    • Useful rank tracking plugin and tools recommendation to improve your WordPress website SEO August 15, 2019
      Are you looking for a reliable rank tracking plugin to track your rankings on search engines and improve SEO strategy? Here is our top recommendation! The post Useful rank tracking plugin and tools recommendation to improve your WordPress website SEO appeared first on Meks.
      Ivana Cirkovic
    • 6 reasons why you should never use WordPress nulled themes August 7, 2019
      What are WordPress nulled themes and should you use them, are they really that bad as people say or it’s just to scare you away from using the good stuff for free? In this article, we’re explaining in details why you should never ever use these kinds of themes. The post 6 reasons why you […]
      Ivana Cirkovic
    • Top 6 WordPress Portfolio plugins (hand-picked by designers) July 31, 2019
      Wondering what type of WordPress Portfolio plugins to use to showcase your work? Read our recommendation and choose between these top eight I present to you today. The post Top 6 WordPress Portfolio plugins (hand-picked by designers) appeared first on Meks.
      Ivana Cirkovic
    • Definitive guide to adding Facebook Pixel in WordPress July 24, 2019
      Having problems setting up Facebook Pixel in WordPress? If you want to improve your Facebook ads conversion, use this guide and learn how to properly ad Facebook Pixel in any WordPress site or blog. The post Definitive guide to adding Facebook Pixel in WordPress appeared first on Meks.
      Ivana Cirkovic
    • How to easily create WordPress dropdown menu (without coding) July 17, 2019
      Interested to create WordPress dropdown menu all by yourself and don’t know how? Just follow our guide and learn in no time! The post How to easily create WordPress dropdown menu (without coding) appeared first on Meks.
      Ivana Cirkovic
    • 12 must join Facebook groups for photographers July 11, 2019
      Whether it’s for constructive feedback or new learnings, these Facebook groups for photographers are a great networking place to be in! The post 12 must join Facebook groups for photographers appeared first on Meks.
      Ivana Cirkovic

    Text

    Distinctively utilize long-term high-impact total linkage whereas high-payoff experiences. Appropriately communicate 24/365.

    Archives