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Archive for the ‘Long Term’ Category

To QE Infinity and beyond for the Federal Reserve?

Last week Federal Reserve Vice Chair for Supervision Randal Quarles suggested that the Federal Reserve may need to buy Treasury and other bonds forever. Quantitative easing isn't a temporary measure to assure bond market stability during the coronavirus recession, Quarles hinted. Instead it is a permanent measure forced on the Federal Reserve by the ballooning […]

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Fed pledges to hold interest rates near 0% through 2022–stocks dip anyway

Could this be the first signs that the financial markets are questioning Goldilocks? Investors and traders heard almost everything they could have hoped to hear from the Federal Reserve's interest-rate setting Open Market Committee meeting today. Sure, the Fed didn't cut its current 0%-0.25% benchmark rate lower, but no one was expecting that. The Fed […]

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Wall Street starts to watch something called the market price/liquidity ratio to justify this rally

The Standard & Poor's 500 stock index may be closing in on the February 19 record closing high of 3386.15--about 11.2% from the Friday, May 29, close at 3044.31, but some Wall Street strategists see more rally ahead--with a close at the end of 2020 near 3,500 as a popular target. That's even though unemployment […]

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Deflation or a spike in inflation in 2020-21: A tale of two fatter-than-expected tails

The financial market consensus on inflation is pretty obvious: For 2020 and 2021, the U.S. economy will see modest inflation, maybe 1.5% to 1.75%. That would be significantly below the Federal Reserve's inflation goal of 2% or so. And that gap would keep the Fed focused on stimulating the economy to push inflation higher (and […]

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Are we headed into an era of longterm deflation? Will the Fed say it’s worried about deflation after tomorrow’s meeting?

As long as I can remember (which is only back about 40 years when it comes to the economy) the worry has been inflation. From the stagflation of the late 1970s, to Paul Volcker's brutal but successful assault on inflation in the early 1980s, to the seemingly endless obsession about whether too much economic growth […]

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Intel also suspends its stock buyback problem–remember to put that into your calculations for where the market goes after the corona bear

Intel (INTC) said Tuesday that it would suspend its share buyback program. In October 2019 the company said it would buy $20 billion in shares over the next 15 to 18 months. The company completed $7.6 billion in buybacks in the fourth quarter of 2019 and the first quarter of 2020, leaving roughly $12.4 billion […]

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The challenge for the next ten years: Mediocre projected investing returns for a decade

Pickings look rather slim for investors over the next decade, according to the results of Morningstar's annual survey of financial market forecasts. Certainly much slimmer than the extremely strong returns for U.S. stocks for the last decade. During that period the Standard & Poor's 500 has gained an average annual return of 13.50% (with dividends […]

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The first of four not so easy pieces for rebalancing any portfolio but specifically my long-term 50 Stocks Portfolio

In an ideal world, every stock market trend--up, down, sideways--would begin on January 1 and end on December 31. That would make an annual rebalancing of any portfolio as easy as falling off a madly spinning log in a Canadian logging festival. Most market trends don't cooperate. They start early or end late and just […]

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China’s economy is showing big strains–that a trade deal with the United States won’t fix

Hengfeng Bank has announced that it will sell 100 billion shares in a private placement to raise cash. This is the third Chinese commercial lender to receive government assistance since May. Investors in the deal will include Central Huijin Investment (60 billion shares), an arm of China's sovereign wealth fund, an asset management company controlled […]

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Coming Wednesday–Rebalancing (finally) for the long-term 50 Stocks Portfolio

With my thoughts on why rebalancing has been so difficult in the market of the last 12 months.

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