To the casual observer, economics can seem monotonous and tedious. The regular reports on GDP, employment, manufacturing, inflation, and various indexes may feel like a futile exercise. What meaningful choices can one derive from these figures to enhance their circumstances?
Should a slight uptick of 0.2 percent in the Consumer Price Index prompt you to buy extra toothpaste? Should a sluggish GDP growth make you reconsider your current job? Clearly, such data often seems irrelevant for making well-informed decisions.
Alongside the government’s convoluted economic reports, statements from leading policymakers can appear almost nonsensical. For instance, Fed Chair Janet Yellen remarked last month, “Just because we removed the word ‘patient’ from the statement doesn’t mean we are going to be impatient.” Such utterances can leave individuals bewildered and diminish their sense of clarity. Continue reading
Should We Really Put Gold in an IRA?
By Jeff Clark, Senior Precious Metals Analyst
“Investing in gold for your IRA is one of the least savvy moves you can make,” declared a well-groomed television commentator, his polished appearance projecting an air of superiority. “It’s well known that income-generating assets are the best choice for an IRA.”
This statement sounded like the pre-packaged opinion of someone who hadn’t contemplated the issue deeply. His advice could mislead viewers and potentially harm their portfolios.
It’s true that the tax benefits of an IRA favor income-producing investments, especially when factoring in compounding returns. However, gold does not generate income.
Moreover, there’s another crucial drawback to placing gold in an IRA—one that the television journalist might not have considered: you sacrifice privacy. Gold remains one of the few assets in modern society that provides anonymity, a quality you forfeit when you transfer it into an IRA. Continue reading
Recently, just when the mainstream media thought they had a solid economic narrative, unexpected developments emerged. There’s a prevailing sense of uncertainty, as the familiar storyline of economic recovery seems to be losing its coherence.
The dominant narrative since late last year suggested that the U.S. economy was gradually improving, while major global economies—Japan, China, and Europe—were faltering. Until a few weeks ago, everything appeared to follow this script.
The assumed strength of the economy had led many to expect the Federal Reserve to finally raise the federal funds rate after more than six years of stagnation at near-zero levels. June was widely anticipated to be the month when Janet Yellen would take that leap. However, reality often diverges from our expectations.
“Jove does not give all men their heart’s desire,” remarked Homer over 2,750 years ago. While he likely wasn’t referring to modern central bank interventions, one can’t help but laugh at the irony of it all in light of our current economic circumstances. Continue reading
As the old saying on Wall Street goes, “Sell in May and go away.” The common guideline suggests selling stocks on May 1, holding cash throughout the summer and into fall, and then re-entering the stock market around Halloween. The phrase certainly has a catchy ring to it—but what if this approach leads to negative outcomes?
“Waiting until May runs the risk of selling in concert with many other investors,” cautions Mark Hulbert from Hulbert Financial Digest. Perhaps the ideal moment to sell isn’t May after all. Maybe it’s wiser to anticipate the trend and make your exit in April. But how can we determine the right time?
“Fortunately, we have valuable real-world data from two notable attempts to get ahead of the ‘sell in May and go away’ strategy. The first comes from the ‘Almanac Investor Newsletter,’ edited by Jeffrey Hirsch, and the second from Sy Harding’s ‘Street Smart Report.’
“Both apply similar adaptations to this seasonal pattern, each utilizing a technical indicator known as MACD to pinpoint the most opportune days for market entry and exit. (MACD stands for moving average convergence divergence.) Continue reading
Overall, these insights into economic trends and strategies suggest that staying informed and adaptable is crucial for making sound financial decisions. It’s vital to dissect the information available, as assumptions can often lead to misguided choices. By approaching these narratives critically, individuals can better navigate their economic landscapes.
