Conservatory Chat

The normal retirement planning models say that when we retire, we will spend the same amount of money out of our retirement portfolios each year on living expenses, travel, eating out, etc., with that total amount only rising each year as inflation makes all those things incrementally more expensive. But is that actually true in the real world? A recent report by the RAND Corporation examined the...

Individuals with advanced economic degrees and economists that are employed (sometimes at astronomical salaries) at the big brokerage firms have inside data that tells them where the economy is going, right? After all, their views are routinely sought out and published by the major news outlets, so they must know something that we don’t know. The interesting thing about these various predictions i...

What if somebody could tell you the exact date when the next recession will begin, so you could get out of the market and wait it out? Wouldn’t that be great? You can fantasize about this if you want. But it so happens that sitting on the sidelines during an economic recession is actually bad for your portfolio returns. A study conducted by a mutual fund company called Dimensional Fund Advisors di...

Here’s a surprising source of support to the stock market… Pretty much every economic theory rests on the idea that prices are set by the balance between supply and demand. If there are more buyers than sellers, or more demand than supply, prices will go up because the buyers will be bidding against each other. If there are few buyers, prices will have to go down to attract more buyers back into t...

All year long I’ve been listening to pundits on financial networks incessantly predict imminent recession. Per usual, investors who listened and retreated to the sidelines learned once again that doing so put them at financial peril as the markets delivered yet another quarter of solid returns. The broad U.S. stock market picked up gains of six and two-thirds percentage points in the second quarte...

Back in 1997, investors could choose from more than 8,000 publicly traded companies listed on the various exchanges. Today, that number is just over 4,000. What’s going on? A variety of very plausible explanations have been proposed, but none can account for half of all stocks vanishing from the marketplace. One explanation is that smaller firms are choosing to remain private, to avoid the disclos...

Chances are you’ve been inundated with offers to install solar panels on your house. These advertisements, fliers, and emails tout generous tax benefits and zero-cost electricity. Whenever you see aggressive advertising, there is usually a catch somewhere. So, what is the truth about solar tax credits? The Inflation Reduction Act has authorized a 30% tax credit for any energy-saving equipment (inc...

At the beginning of this year, you might have been curious about the hoopla over the proposal that was introduced in Congress to impose a national sales tax on everything we purchase. After all, 45 of our 50 states collect sales taxes. Also, 170 different countries collect something similar: a value-added tax, which is assessed on different purchases across the supply chain for manufactured articl...

One of the popular suspects for causing inflation is that, in this tight labor market, workers are demanding higher wages and their increased disposable income ( demand ) is outpacing the supply of goods and services. Whenever demand grows at a faster rate, then supply prices rise.   A counter argument suggests that even though there does seem to be a shortage of workers in a number of industries,...

This is your captain speaking…  When you’re on a commercial flight, and the plane is approaching turbulence, the captain comes on the intercom to let you know to buckle up and expect “rough air." There should be similar warnings about “rough air” in the markets, and this is a good time to offer one. The market turbulence that we see approaching is a consequence of the debt ceiling debate – or...

There’s a persistent misnomer in the minds of some financial consumers that charitable giving can actually benefit the giver from a tax standpoint, if the gifts are carefully structured to avoid capital gains taxes and generate tax write-offs. But in fact there are no clever strategies which make it profitable to give away money or assets. However, there are ways to make gifts and donations less e...

You may know that the U.S. has reached its debt limit again (roughly $31 trillion). What exactly is the debt? Press the play button to find out.  The government raises its money from taxes, supplemented by debt in the form of government bonds – Treasury bonds and bills.  By incurring debt, the government is actually creating investment opportunities for individuals, companies, and other government...

Is the collapse of Silicon Valley Bank (SVB) reason to be alarmed? Press the play button to learn more about what happened and why there's likely no reason for you to panic. Although this was the largest failure of a U.S. bank since the 2008 economic crisis, SVB was kind of unique in the banking industry. Unlike most banks that loan money to local residents, small businesses, and corporations...

Why should you pay attention to the latest debate over Social Security benefits and FICA taxes? Press the play button to hear about the various reasons.  At least five of the seven Republican Senatorial candidates ran on a promise to cut Social Security, Medicare, and/or prescription drug reforms that lower drug costs for seniors. The Republican Study Committee released a proposed budget that woul...

Short-term interest rates have soared from under 1% to over 4%, inflation has exploded, and unemployment has all but disappeared. What happened? Press the play button for some insight.  Some pundits are searching for answers to the future in the past. But, if there are no reliable conclusions as to how the future will reflect the past, what does past investment performance really matter? Most agre...

How do you make your portfolio "greener" or "more sustainable?" The answer is subjective. Press the play button to learn more. Analytical services that attempt to assist investors with choosing the right assets for a "green" portfolio seldom agree on what they’re measuring or which companies measure up — leaving the investor to throw a dart at the choices and hope for...

By now you know that market timers and traders were spooked once again, causing a downward ripple across the U.S. investment markets. What startled them? Press the play button to find out. The U.S. economy does seem to be experiencing a slowdown that could (emphasize could ) lead to a recession. The problem for investors, though, is that the stock market tends to be a leading indicator of economic...

Not to belabor the obvious, but boy, the market sure is taking a real beating these days. Maybe that’s not such a bad thing? Press the play button to find out why. Currently, we are collectively suffering an economic illness. To cure it, we're taking our medicine, which truly tastes awful. But anybody who has come down with a bug and taken medicine to cure it knows that the former unpleasantn...

Planning a vacation this fall? Go ahead and press the play button first. Booking your flight now might be the right idea. Demand is down, so airfares are also down, with ticket experts saying they’ve seen across-the-board reductions. Why not wait for prices to go down even further? Airlines are cutting their capacity, creating less choice and fewer seats all the way through November. Plus, there i...