- - Page 2 of 15 The Finance Gourmet

Stock Market Melt Up

April 22, 2022 by Finance Gourmet

Oh, goodie. It’s time for some more stock market terminology. What Is a Melt Up? The world of finance, like any specialized group, has numerous terms, acronyms, and phrases that apply to managing money and investing in the stock market. Things like “Santa Claus Rally” are less about being able to describe something, and more about having fun, sometimes clever, ways to describing events, strategies, and happenings that occur. Santa Claus Rally — The somewhat common phenomenon of the stock market rising into the end of the year. Today’s word of the day comes courtesy of CNN Finance and Luke Lango, InvestorPlace senior investment analyst who wrote that they believe there will be a massive melt up over the next two years in which the stock market would rise 20% or more before tipping over into a recession or crash. I haven’t had a chance to look into Luke Lango’s track record. Maybe I’ll do that when I finish writing my freelance finance writer projects. Should We Worry About a Melt Up? Good news, investors. As always, the best way to invest for long-term goals is with a well-diversified portfolio tailored to your goals and risk tolerance. Such a portfolio …

Did Mortgage Rates Hit 12-Year High?

April 21, 2022 by Finance Gourmet

The press loves a good scare story, and mortgage rates hitting a 12-year high is just the ticket. Mortgage rates did hit a 12-year high, and I suppose for those who are newer to the world of finance that probably seems like a big deal, but the reality is a little different. The 30-year fixed mortgage averaged 5.11% last week. That isn’t remotely a historically high mortgage interest rate. In fact, it wasn’t that long ago that a 5% mortgage was a great rate. It still is. But, these haven’t been normal times. The U.S. economy seems to lag on differently than it once did. The inflation we see today is the only real inflation we have seen in decades. Every time the American economy looked it like might get going back to “normal” something happened to smack it back down turning what used to be crazy, historically low interest rates into normal interest rates to the newest generation hitting financial literacy. This 10-year chart of the Federal Funds rate shows that we haven’t seen a Fed Funds rate above 2.5% in the last decade. In fact, just when we got close to something that might be considered normal or …

When Will My Savings Interest Rates Go Up?

March 18, 2022 by Finance Gourmet

Waiting for your bank or credit union to raise the interest rate they pay you on your savings or money market accounts? Don’t hold your breath. Better Savings Interest Rates While the Fed kept interest rates at zero, most banks followed suit with their basic interest-bearing accounts, getting as close as their computer software allowed, 0.01% interest or APY if you prefer. A quick search of big bank websites shows mostly the same. Sure, you can grab a little bit more interest on a little bit more money if you meet certain terms and conditions, but the basic savings accounts all look like this. Bank Interest Rate Chase Savings Interest Rate 0.01% US Bank Standard Savings Interest Rate 0.01% FirstBank Regular Savings Interest Rate 0.01% Bank of America Advantage Savings Interest Rate 0.01% USAA Savings Account Interest Rate 0.01% Wells Fargo Way2Save Interest Rate 0.01% According to company’s website as of 3/18/22 You get the idea. Most of these banks have a way to earn more interest if you perform certain steps like setting up direct deposit or keeping a minimum balance, but even then, the rates are nothing to write home about. The best high-yield savings accounts online do …

What Is the Difference Between PPI and CPI?

March 15, 2022 by Finance Gourmet

These days everyone is worried about inflation. The financial media often distill reporting about inflation down to a single, easy to understand number. “Inflation rose 5% in March,” they will say. What are they talking about, exactly? What is the CPI? What is the PPI? And, what is the difference between the PPI and CPI? What Is the PPI? The PPI is the Producers Price Index. The PPI is an index that measures the average change over time in the selling prices by the producers of goods. The PPI measures price changes from the producer’s perspective. The main Producer’s Price Index is composed of the approximately 10,000 PPIs for individual products and groups of products generated each month. What Is the CPI? The CPI is the Consumers Price Index. The CPI measures the average monthly change in the prices of a set of goods and service commonly consumed by U.S. households. The CPI measures price changes from the consumer’s perspective. The CPI measures a specific set of items and services that are set in advance. How Are the PPI and the CPI Different? To understand the difference between PPI and CPI, we need to look at their construction and purpose. …

Russia Invades Ukraine

February 24, 2022 by Finance Gourmet

Thinking about your investments as war starts is kind of cold and calculating, but also perfectly natural. What should I do when Russia invades Ukraine? First, remember, investors do not like uncertainty. Nothing is more uncertain than the course of war. Expect a market downturn with every new development that isn’t the war ending. Second, remember that the markets tend to overreact to initial news because everyone is both reacting, and trying to predict how others will react. Third, remember if you have a well-diversified portfolio, this sort of thing should not affect your investing strategy. Markets go up and markets go down. As far as your long-term investments are concerned it doesn’t matter whether the markets went down because of war, or just a cyclical phase of the market cycle. Do not panic. Do not sell unless you were already planning it. Fourth, if you are actively investing for the long-term in your 401k, IRA, 529 plan, or whatever else, KEEP GOING. This is exactly how dollar cost averaging works for you. Your investments when the markets are down become your buying at the bottom in the future. Do not miss the opportunity. Dollar cost averaging does the work …

Market Correction… Barely

February 23, 2022 by Finance Gourmet

So, the S&P 500 closed low enough on Tuesday to make it 10% lower than its closing high on January 3rd marking, officially at least, a correction in the stock market. If you aren’t seeing a lot of fuss, that’s because it really isn’t that big of a deal. Back on January 3rd, you couldn’t swing a dead cat without hitting someone who thought the market was overvalued, that it had run up too high for too long. So, when the market began a slow sideways, sloping down, trend over a two-month period, nobody really worried about it. It’s as if those prices on January 3rd weren’t real and the market was getting back to reality. Even now, there are plenty of people out there saying that the market is still too high. They might be right, and frankly another two-month long drop down another 10 percent probably won’t be much of a fuss either. After all, while this correction is a market down 10 percent from its peak, it’s a market that is zero percent down from last October, and zero percent down since last July, and still very much up from before that. In other words, unless you …

Fed Raising Rates 2022 Inflation and Economy

January 11, 2022 by Finance Gourmet

At all times the Federal Reserve’s Open Market committee has a dual task. One task is to guard against inflation. The other task is to not make the economy implode. In most cases, this isn’t as hard as it sounds as long as you have strong Federal Reserve bankers who don’t cave to Wall Street’s pressure (or dance like monkeys to in the first place.) For 2022, The Fed has one of the tricky times. This is what Wall Street pressure looks like: December payroll data showed a far fewer than Wall Street said it would be addition of 199,000 to payrolls, but wages did increase 4.7% year over year. There is a very big catch here. Remember that the economy got messed up rather good with Covid and it really isn’t done with Covid, so all of these numbers have to be taken against the fact that last year was not good and this year isn’t so much a raging economy as it is putting the pieces that fell off the board back up on it. Don’t forget to read our Zelle review. That being said, inflation is up, even compared to pre-Covid and you don’t want to fall …

Galera Therapeutics Decides Its Drug DOES Work

December 14, 2021 by Finance Gourmet

So, I’ve been examining (procrastinating by looking at other stuff) the various tools that come with all of these no-cost investing apps like Webull, Stash, Robinhood, and the like. I’ve also been playing around with the idea of delivering some micro-posts here on FinanceGourmet. Usually, I try and fully cover financial advice, or financial independence strategies and topics, in full detail. However, maybe some quick hits would be valuable along the way as well. We’ll see how it goes. Galera Therapeutics Stock Rises 100% On Error Typically, when a company reports a big-time error, its stock goes down. Not Galera Therapeutics. Today, the company issued a press release before the market opened stating that it’s Phase 3 drug trial DID achieve statistical significance after it reported earlier that it DID NOT achieve statistical significance. The Company previously announced the Phase 3 ROMAN trial of avasopasem in SOM did not achieve statistical significance on the primary endpoint. Upon further analysis, an error by the contract research organization (CRO) was identified in the statistical program. Correction of this error resulted in improved p-values for the primary and secondary endpoints. Galera Therapeutics – Galera Announces Primary Endpoint Met Statistical Significance in Corrected Topline Efficacy Data …

Unemployment Rises Less Than Expected

December 8, 2021December 2, 2021 by Finance Gourmet

Ah, the world of finance, where the rules are made up, and the points don’t matter. OK, I stole that from Phineas and Ferb, but sometimes it fits better than it does even for a fake game show. Today, unemployment numbers were released in which the number of Americans filing for unemployment increased. That means more Americans are jobless than before, despite the so-called worker shortage and the Great Resignation. Don’t forget, you don’t get to file for unemployment when you quit, so these are still Americans who were fired, downsized, let go, or their employer closed. More unemployed Americans is bad, in general, but… Economists were predicting (modeling, similar to what meteorologists do) that there would be even more Americans filing for unemployment, so the fact that more Americans are unemployed, but not as bad as we thought, is good news. Kind of. Check out my review of the new fintech investing apps. The reality is that numerous traders and investors made their trades expecting higher unemployment numbers would push down the price of securities and investments. Since they were wrong, the price of those investments are rebounding. This is “good news” in the world of finance, and a …

Build Back Better Passes House

November 19, 2021 by Finance Gourmet

For the last couple of administrations at least, the Democrats are better at naming their bills. The Build Back Better package not only has a snazzy name that makes it sound like a good law, it also abbreviates down as BBB, or even B3, or whatever. Anyway, the Build Back Better package is good news for American taxpayers and has a lower deficit impact that the Republican’s signature tax cut bill from a few years ago. Plus, if you understand economics well enough, you know that the rising inflation actually makes all of this cheaper. But, this is a finance blog… The news this morning is to realize that this package once again started in the house, and it once again has to go to the Senate where that one corrupt Senator from Arizona has to hem and haw and collect donations for a while before voting on the package, and they have to do the Manchin dance or whatever to. The important thing to remember is that this is not a law yet, and whatever is in it might not be in it when it does eventually become a law, so don’t start planning your taxes around it. If …