- - Page 3 of 12 The Finance Gourmet

Covid Investing – Just 1 Tip

December 1, 2020October 22, 2020 by Finance Gourmet

People keep asking me about how to invest based on Covid. Covid investing would be the idea of investing in the potential vaccine manufacturers, distributors, the company that makes glass vials, and things like that. Those company’s stocks are already up on the hope that they’ll benefit. It’s unlikely they are underpriced relative to risk at this point. However, there is an easier way to make a Covid investment. Covid Vaccine To update the original post I must point out that the potential Covid vaccine has arrived faster than I thought it would. The economy is still on the bring thanks to Congress’ inaction on a stimulus package, but in the short-term, expect investors to focus on the vaccine and what might mean for companies, with or without a stimulus. Watch for a lot of over-optimism in the vaccine manufacturers such as Pfizer. If one of them comes out as the dominant winner, then that could really move the needle for them, but present a lot of risk for the others. In my opinion being the main vaccine provider is now priced into all three stocks with vaccines pending before the FDA. Unless they all get something like a third …

How Is The Economy Doing?

October 7, 2020October 6, 2020 by Finance Gourmet

When it comes to the U.S. economy there are a lot of opinions. Many of those opinions have motivations behind them that tend to skew their analysis. So, who should you listen to about the economy? Well, you could do a lot worse than the Chairman of the Federal Reserve. The Economy Is Weak The U.S. recovery is weak, very weak. Although jobs are recovering, they are still lower than they were when the pandemic started. The opinion of the Fed Chairman is that the economy needs more help in the form of government stimulus. Of course, the politicians in Washington care more about Dems vs. Repubs than they do about America, so we are caught in petty fights while the economy sputters. Why The Economy Needs Help While politicians, especially the President, love to point to the stock market as proof the economy is doing well, most investors are very skittish right now. Any bad news at all, and they’ll turn into sellers, and take the market with it. Stimulus in the form of extra unemployment benefits has proven particularly helpful to the economy. Why? Because people on unemployment spend that money, and that stimulates the economy. Save money …

New Home Sales Up During Covid

September 24, 2020 by Finance Gourmet

An interesting wrinkle in the new Covid economy showed up today. The U.S. Department of Commerce reported that new home sales in August rose by 4.8%, on top of a spike 13.9% in July. Buying New Homes Overall home sales are having difficulty in no small part because home buyers are reluctant to do several showings in a day in a Covid world. Those showings are what motivate buyers to purchase existing homes. Unlike existing home sales, new homes are typically sold via model homes. Model home are shiny, bright, and seem cleaner, even though more people may actually move through them each day. Furthermore, rather than having to see numerous homes to find the perfect one, buyers need only find a model they like. Builders then allow buyers to tweak that model. Low Mortgage Rates Record low mortgage rates are also helping drive sales for new construction. Unlike existing home sales that are dependent upon subjective appraisals, lenders can easily get a feel for the current value of the one of many new buildings a particular buyer looks to purchase. Is Zelle a scam? Finding a mortgage, however, even for new construction is getting harder. It turns out lenders …

ANOTHER Stock Market Correction?

September 21, 2020 by Finance Gourmet

Monday’s trading left the S&P 500 down a big chunk, and closing in on another stock market correction for the year. As we’ve talked about before, the stock market this year is very volatile moving up and down in big moves as investors, and their computer programs, make trades based upon how they think the economy will play out among the coronavirus issue. The most recent trend has been down. A Stock Market Correction The definition of a stock market correction is a decline of 10%. The catch these days is that the stock market peaks are often the result of a fast runup in the markets. As a result, the first three or four percent of any correction is nothing more than taking the top off of a potentially unwarranted wave that rose too fast. Check out my Acorns review So, here in we are in September facing down another correction for the market during 2019. As I write this, the stock market isn’t quite down enough to count as a recession, but it may very well get there later today, or even tomorrow. It is also possible the computer algorithms get tripped and start buying. Either way, the …

Restarting The Economy

May 26, 2020 by Finance Gourmet

How do you restart the economy? The reality is that no one really knows. The mostly shutdown of most of the economy for a couple of months is unprecedented. Sure, some parts have shutdown for various reasons (usually natural disasters), but the whole U.S. basically turning off businesses at the same time has never really happened. What Is “The Economy?” Part of the trick to understanding reopening the economy is knowing what we are talking about. In a real way, the economy itself never shut down. Money still changed hands, bills were still paid — or unpaid — stocks still traded, shoppers still bought things online, and certain businesses, like grocery stores, never shut down at all. So, what are we talking about? Most states restricted various in-person businesses. The cliche is hairdressers and barbers. However, there were a lot of other, much bigger, sections of the economy that were shut down. Shopping malls, gyms, and perhaps most importantly, restaurants. Are Restaurants The Economy? Although we take them for granted, restaurants make up an enormous part of the economy, as well as the tax base for cities and states. Unlike a hair salon that employs a few people, restaurants can …

Restart Finances with Restarting Economy

April 28, 2020 by Finance Gourmet

As parts of the country start moving into reopening after coronavirus lock downs, it’s time to start thinking about how to restart your own personal finances when the restrictions end. So, how do you restart finances while the country is restarting economy? Going Back To Work Despite all the news reports, protesters, and talking heads on television, the decision to go back to work or not is a deeply personal one rooted in your own personal circumstances. Review of Zelle Scam Legit or Safe? First, assess your own personal health risk situation. As many reports have noted, certain people seem to do worse than others when it comes to contracting the coronavirus. Although there are numerous reports of otherwise young, and healthy people ending up in the hospital, the odds still look the worst for those who are older, or that have preexisting conditions. If you can’t safely return to work, it is time to start looking into what your possible options are. Coronavirus Unemployment Be sure to check out unemployment programs. Even if you may not have qualified in the past, the rules have been changed, and benefits are more generous with a $600 boost for many unemployed people. …

The Big Market Plunge

February 25, 2020 by Finance Gourmet

The stock market has been on increasingly shaky ground over the past several months as valuations raised quickly on dubious fundamentals. When this happens, market get skittish and start looking for any reason to make at least a small correction. That reason popped up this month in the form of the coronavirus. The coronavirus isn’t actually new. Several strains are already very well known both in the U.S. and abroad, but the latest strain seems to spread more quickly and easily than other strains. As fear of an epidemic (justified or not) rise, investors get nervous and start to look for safer investments. See my review of Acorns. While that may not mean wholesale selling out of portfolios it’s easy to see how investors might prune back international investments, and even investments in the United States that depend are harder hit countries like China. What Investors Should Do About the Coronavirus? As always, while any market plunge is scary, a well-crafted, regularly refinanced portfolio is best way to invest for the long-term. One day, the coronavirus will be old news, just like Ebola, and bird flu, and the other scary viruses that have made headlines in the past. When that …

The Not Quite Goldilocks Economy

December 18, 2019 by Finance Gourmet

Everybody loves the idea of the Goldilocks Economy. Not too hot. Not too cold. Just right. The Fed is leaving interest rates unchanged, and telegraphing that is currently isn’t planning on making any changes next year either. Stock market pundits have given up on calling the impeding doom of a stock market crash (at least for this month). Job reports show job growth, but not too fast of job growth. And while wage are growing, they are doing so slowly. Not Goldilocks However, you won’t see a lot of articles on a Goldilocks Economy happening. While things are definitely not too hot and not too cold, there is a connotation with Goldilocks that things are inherently good. This economy seems more like the negative version of a Goldilocks situation. As in things aren’t too bad, as opposed to things are too good. In a way, this is better for investors and the economy in general. Too much optimism can turn a mild-mannered, almost Goldilocks economy into a runaway bubble and no one wants that. The next year will be very interesting. Once the holidays are past and the country stops paying attention to impeachment in Washington, the reality of just …

Stock Market Is a Leading Indicator

September 11, 2020August 23, 2019 by Finance Gourmet

Remember, the stock market is a leading indicator. What Is a Leading Indicator? This should probably get its own post, along with what is a lagging indicator, but that isn’t the point of this article, so let’s hit the highlights. At the most basic level there are leading indicators and lagging indicators. A leading indicator is a measurement of what is to come. A lagging indicator is a measurement of what has already happened. At a metaphorical level, the display on your car that says you have 80% of the life of your oil left is a leading indicator. It is measuring the future. Note that it does NOT predict the future. It’s a best guess effort based on available data. Contrast that with a lagging indicator, which measures something in the past. Metaphorically, this might be the sticker on the windshield that says the mileage of the last oil change, or your maintenance log. In the world of economics, most lagging indicators are big data compiled by the government. You may have noticed that the June Labor Report comes out in July. That’s because you have to wait until the end of June for all the data to even …

China Is Officially a Currency Manipulator

August 7, 2019 by Finance Gourmet

China has been a currency manipulator for years. Everyone knows it. China knows it. The U.S. knows it. Every economist in the world knows it. China has an enormous trade surplus with the world. Typically, when this happens, the value of that currency rises making its exports more expensive to other countries. This, in turn eventually reduces the amount of imports a country makes, thereby reducing the overall trade deficit. China, which requires its citizens to hold their savings in state run banks, uses the large amounts of currency it generates sending exports around the world to ensure that the value of the Yaun never gets above a certain amount. In turn, this both keeps its exports cheap, and prevents any closing of the trade gap between its trading partners. None of this is secret, or remotely new information Trump Calls Out China Currency Actions What is new, is that usually no one says it out loud, and no one ever actually makes it official by labeling China a currency manipulator. So, what does it mean now that China has been officially labeled? Nothing. You see, since China has been doing this forever, and the other countries have known about …