- - Page 10 of 23 The Finance Gourmet

Stock Market Highs Main Street Lows?

September 11, 2020August 19, 2020 by Finance Gourmet

stock market highs catching falling knife

The stock market is hitting new highs. These market highs erase all previous coronavirus lows. Many are wondering how can the stock market be doing great while many Americans are still out of work, and experts worry about the potentially large numbers of evictions that may be coming. The Stock Market Looks Forward Many people forget, or don’t understand, that the stock market is a leading indicator. That means that the markets don’t really care about today per se. Rather, the markets look to the future. Knowing what IBM is trading at today, for example, is worthless to an investor. Knowing , or predicting, what the price of IBM stock will be in a month, or a year, is what allows investors to profit. So, why is the stock market racing to new highs? There are several reasons the stock market is rising. First, the return on non-market investments is abysmal. Every article you read about the mortgage rates falling to new lows, also means that U.S. Treasuries are also falling. The rate on a current 10-year treasury bond is around 1/2%. Would you be willing to lock up your money for 10-years in exchange for half a percent? Neither …

Food Delivery Apps Face Backlash

May 18, 2020 by Finance Gourmet

It looks like food delivery apps, which had previously flown under the radar of scrutiny have overplayed their hands during the pandemic recession. Food Apps Charge Restaurants Huge Fees Restaurants are no strangers to the outrageous fees charged by delivery apps like Grubhub, UberEats, and Door Dash. Restaurant owners can be charged up to 30% of the price of the overall order. This is on top of the fee charged to the customer ordering food. All three apps actively post a laughable “delivery fee.” This amount is displayed predominately and is typically a low number, like $2.99. Then, this fee is often “waived” as part of some sort of promotion, giving the impression that the customer is getting free delivery. The real fee charged for delivery, however, is hidden by combining it in a line called “taxes and fees.” Obviously, the apps hope people don’t pay too much attention to this line. Pandemic Recession and Restaurant Survival Before the pandemic recession hit, customers and lawmakers all had pretty much the same thoughts. If you want to use the delivery services to reach customers, then you have to choose to pay their rates, whatever they are. If the charges were too …

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 …

Stock Market Correction in 2019?

December 5, 2019 by Finance Gourmet

Time is running out for all of those financial analysts, pundits, and economists who predicted a market correction, or worse in 2019. As always, there will be no accountability, nor any mention of the failure of these predictions when the same folks predict a correction in 2020 and then try and take credit for “calling the market.” Still, for those of us who don’t shamble along to the daily clutter of the financial media looking for some sort of clicks, it can be a funny exercise to watch. Every year, I tell my self that I’m going to keep a running tally of the “predictions” so I can create an easy to view table showing the failure of the majority of predictions. Unfortunately, that would be a very time consuming task considering the sheer number of financial professionals who confidently make bold predictions to grab a day or two of headlines. Rakuten and Ebates review. Don’t Listen To Predictions The reality, of course, is that nobody really goes out and makes investment decisions or trades based upon some analyst at Dewey, Cheatum, and Howe calling a market top in Spring 2020. In the end, such predictions are really about media …

Fidelity Joins Free Commissions Movement

January 12, 2023October 10, 2019 by Finance Gourmet

Fidelity announced that it too would be offering free trade commissions to its customers following earlier announcements from Schwab and TD Ameritrade. Fidelity free commission trades have some limits, but they are not onerous. While this is a newer movement among discount Wall Street brokers, it comes after many different investing apps, and services have pushed a commission free investing business model for a year or two now. Obviously, the free trade model is mostly aimed at smaller, do it yourself investors. It also works well for those doing the roboadvisor, or computer-based model investing. Fidelity Free Commission Larger investors already enjoyed “free” trades as part of an annual fee usually applied to their accounts that provided not only free trades, but investment and financial advice as well. Keep in mind that the free trades does not apply to mutual funds with loads, or other investments that charge their own fees. This new wave of freebies only applies to stock trades, ETF trades, options, and other market trades. And, of course, be sure to check the fine print where you’ll find tidbits, like $0.65 per option contract and a charge for sell orders: Sell orders are subject to an activity …

Everyone Who Called a Downturn in the First Half of 2019 Is Officially WRONG

October 8, 2019 by Finance Gourmet

It is now October. That is the third quarter of 2019. By any, and all, definitions the first half of 2019 is officially over. That means all of those analysts, pundits, economists, and big Wall Street talking heads who predicted a recession or stock market downturn in the first half of 2019 are officially wrong. They were also wrong about the first three-quarters of 2019, but that headline isn’t as catchy. 🙂 There is nothing wrong with that on the surface. Predictions of any kind are risky business. However, a great many of these same people trade on a weird blindness in the financial industry. No one keeps any real track of these predictions. As a result, if these same people go out and make the exact same prediction for next year, they get full credit in the media for “calling” the next downturn without any acknowledgement that they were wrong this year (and maybe several of the previous years.) Investing By Predictions is Dumb Past performance is not an indicator of future results. This statement is mandated to show up on all kinds of investing materials by regulators. It is a hopeless cry to the masses to not invest …

Free Trades

October 3, 2019 by Finance Gourmet

Charles Schwab and TD Ameritrade have both announced that they are eliminating their usual commission for stock, option and ETF trades, to provide free trades to their customers. In the coming days, we may see other discount brokerages follow their lead, in part, or in whole. Until now, most brokerages only offered free trades on select securities, often on company owned mutual funds. For example, Fidelity has a list of mutual funds customers can buy for “free.” Schwab has a similar list. This new move opens up free trades to the world of stocks and options. Trading vs Investing New investors often confuse the concepts of trading and investing. Trading seems exciting and romantic. While it very much can be for the right people, the average person actually needs to be investing for long-term goals, rather than slinging stock trades. For investors building a well-diversified, long-term portfolio high commissions can impose an overhead that diminishes returns. That’s why low-cost brokerages like Schwab and Fidelity are preferred for many do it yourself investors. Zero-cost takes it one step further, providing the opportunity to build, maintain, and re-balance a portfolio without the added overhead of even a low commission. Traders, obviously, will …

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 …

Stocks! China! Trade Deal!

August 13, 2019 by Finance Gourmet

The Trump presidency has been nothing if unpredictable. The President seems to wake up with new tweets on his mind every day, and the markets love overreacting to every one. The result is a stunning whip shaw effect of large market moves up and down, often during the same day. This morning, U.S. Trade representatives said that the new tariffs Trump announced in a tweet on August 1 would be delayed. Some tariffs will be delayed until September 1 and others until December. Does that mean that progress is being made on a trade deal? Only the President knows, although he doesn’t really know either. Depending on how talk show hosts talk over the next few weeks, and what he advisors say, he may or may not think he is getting a good deal. Or getting credit for a good deal. Or maybe just get bored. Long-Term Diversified Portfolio Every financial planner eventually gets tired of beating this drum, but the answer is always the same. A long-term, well-balanced, risk adjusted, annually rebalanced portfolio is the solution to the dramatic, unpredictable moves of the market. Sooner or later, this market will roll over. Although, the tons of analysts “predicting” it …

Summer Time!

June 6, 2019 by Finance Gourmet

We at Finance Gourmet (it’s just me, but I like saying that) are getting ready to gear up for summer. That means a few things. First, some of the articles around here are going to be about VACATIONS and things like credit card rewards programs, airline miles, and how to save money on travel. Second, some of the articles are going to be focuses on outdoor activities and how you can take advantage of them while saving money, and living the good life. Third, there is a WHOLE LOT of weird stuff going on in the world economically speaking. Regardless of what you think of President Trump, the stuff he is doing is bombastic, and not at all carefully implemented, so expect plenty of whipshaw from investors, the markets, and economic numbers. As always, a well balanced portfolio is the answer to all your long-term investing issues, but changes are probably necessary for your short-term stuff because the volatility isn’t going away. And, finally, I’m “off” during the summer (I don’t have to go into an office anyway) so expect a bit of off-topic drift as me and the family have a whole lot of fun without breaking the bank, …