Easy Change

 There are a number of items in the news lately that give investors a large amount of concern. There is a looming debt ceiling issue in the United States that continues to be an issue as it does not seem like it is going to be resolved in the near term. However, from the news I've seen it seems like the consensus view is that the ceiling will be raised, eventually.  The second issue is that there is a non trivial amount of debt that has been issued by the Federal Reserve. Even if you believe/support Modern Monetary Theory , the amount of money that has been issued is huge. Close to 1 20 Billion Dollars per month has been injected into the US Economy. The tapering of these purchases is looking like it will start happening, but it is definitely challenging to know the exact timing. The Infrastructure Spending bill total is at 1 Trillion dollars at this point. And the news is that the house of representatives is voting on it this week.  So, with all of that news in the background I

 It has been a while since I talked about my experience in real estate and with the craziness of covid, it seemed like a decent time to talk about this. I have spent some time thinking about this given that I live in a high cost of living part of the United States. What this means in short is that it generally costs me more than average folks to pay for my basic expenses like housing, food and healthcare. While I am fortunate in that I have a degree that pays well , I'm not so naive to think that is the end of the story. What makes sense for me at this stage for my life is different than what seemed reasonable in my 20s. Now, by the zillow zestimate , I have about 40% equity in my home after a little more than 3 years. Looking back briefly, it has been an interesting ride. I bought the property with about 20% down about 4 years ago. Then, I spent about 10k on repairs/painting etc. Next, I went to pay off ahead of schedule, often sending in principle payments of several hundred dol

 So in my previous post, I detailed that I had started to experiment with Options Trading. None of this is advice, but just a description of my experience and thinking. I think that this was an interesting part of my experience in the past year because I didn't previously understand the appeal of some of the more complicated parts of the financial system despite being interested in it for a very long time.  In the past few months, I've begun to take additional opportunities when I can with the shares that I own free and clear via covered calls. I've heard about this option more and I encourage people to read about it more if they are interested. However, this strategy works well for me. In my case, I own a large number of shares in my trading account of certain stocks or ETFs.  It is my intention to buy more if we ever see a market drop. That said, I certainly don't intend to sell. Even in a crazy, 80% style drop like the great depression. I'm holding to zero. It

 In all the time that I have been investing in the stock market, both as an individual investor and as a future retiree, I've never invested in stock options. However, in the world of stimulus checks, these have become more and more popular and even more so in the world of meme stocks like Gamestop GME . What is an Option In my brokerage account I had to first ask for permission to trade options. Presumably, this was to ensure that I had enough money and I understood that there were risks that were not clearly understood to the average stock market investor. Indeed, in some cases your losses could be severe -- much more severe than in the case that you actually bought a stock. Put simply, a put option is a bet the price of a stock will go down. A call option is a bet the price will rise. On a stock that is at 100, you could buy a put at a strike price of 90. That means, you're betting that the price will drop below 90 dollars, and the put option gives you the right to sell the

 In recent weeks my circumstances have changed with my retirement account and the bulk of my retirement savings is in a self-directed rollover IRA. I am able now to look and invest more broadly. This has caused me to be more and more interested in mutual fund alternatives like ETFs.  ETFs are Exchange-Traded Funds which are a newer investment vehicle that are traded on the open market during the day with most mainstream brokerages and you're able to know the going price during the day instead of waiting for the close of market to have the mutual funds be priced. Also, whereas traditional mutual funds often have a fee in order to get in, many of the ETFs have no load and also very low expenses.  Impact to the Market I've followed Consuelo Mack WealthTrack for some time. This week's guest is a longtime expert in the industry and while he previously has favored mutual funds, in particular index funds, he now believes that their days are numbered.  Indeed, Morningstar  reports

 I attended an interesting presentations given by IShares/Blackrock with the goal of showing how to use their ETF products to capitalize on investing themes for 2021: Gargi Pal Chaudhuri - Head of iShares Markets & Investments Strategy Dorothy Lariviere - iShares Product Consultant iShares (by BlackRock) - 2021 Outlook: New President, COVID-19, and Policy I found that this presentation was quite interesting. The presenters included two women which was a pleasure to see and they were quite intelligent and well-spoken. I don't advocate for any particular investment or forecast, but I thought that the summary was interesting and if you want to review the particular symbols they mention as ways to act on these themes, they are included at the end. US GDP Forecasts Above 6% for 2021 This presentation included a forecast that perhaps is not too shocking, but a positive report that GDP looks to be positive and a substantial number. The drivers for this include the ongoing fiscal and

Are we recovering? "Optimists point to the rapid decline in the unemployment rate after the first wave of the pandemic—from nearly 15% in April to 6.7% in November— as a reason for a speedy recovery. Pessimists' go-to statistic is the high and rising rate of the long-term unemployed, those who have been out of work for more than six months. It has risen from 0.7% of the labour force in February to 2.5% today."  -From The Economist - Jan 2, 2021 (America's Jobs Market. Speed Limits) The article recounts the fact that many people who are long-term unemployed have indicated that they are only temporarily laid off, while history and shows that over time, many of these jobs may not come back. Many people have dropped off the rolls altogether and are no longer looking for work. According to Jason Furman and Wilson Powell III of Harvard University, the real unemployment rate is 8.5%.  Within the sectors of knowledge work, there has been a dramatic overnight shift to large nu

 In the book A Random Walk Down Wall Street  author Burton Malkiel argues that the stock market is, as the title suggests, a random walk. In the book, which is cited and echoed by famous industry titans like Jack Bogle of Vanguard fame, it: 1. Makes little sense to think that you can beat the market. Indeed, on average you'll lose money when picking stocks. 2. In looking at when to invest and cash out of stocks, if you try to time the market you'll inevitably do worse.  This advice really stuck with me and I still believe this to be the case. But in the current environment, as many smart people do, I do find myself asking myself if it is different this time. Much of this is due to the performance of "broad market" indices. Diversification is the idea that by spreading your investment over many companies, you lower the volatility. You might have less upside, but you also have less downside risk. In the end, you're hoping the market as a whole does well, more than a

  The Economist writes on January 16, 2021 that "the pandemic has ushered more robots into factories, warehouses and back offices." and that "they are here to stay." The article cites information surveyed from a variety of manufacturers and shows that the increase is marked for these firms' increase in digital consumer interaction and collaboration along with Artificial Intelligence and automation. So, in short, what does that mean for society and how will that impact investing into the future? Society continues to find new and innovative ways to make our lives better with technology. The amazon effect on retail has translated into the destruction of brick and mortar. Many people are happier with this setup. For advocates of online shopping, they are spending less time doing these errands and more time on hobbies, with family, or able to do other things that they feel are a better use of their time.  Amazon continues to forge ahead with its use of technology, u

Reflecting Back.  Tax time always is a chance for me to look back after the business of the holidays is behind me. I had a few thoughts that I figured I would jot down as I wrap up the end of this year. In short, the amount of time seems somewhat compressed. I'm surprised that when we get to March, it will be a full year of the pandemic life. Living at home, working at home, with minimal options for socialization and the like.  Mental Health seems to be taking a real hit for many people, perhaps unsurprisingly in the wake of the pandemic, all while thousands of people continue to be dying. All of that serves as a stark reminder of how lucky those of us are that are blogging about money and personal finance who have not been harshly touched by this event.  Taxes are important, but having some gratitude and reflection on the good things that have happened this year can be a good aspect of the process too. Documents On Time All that said, the tax documents arrived early this year and

 There's a big series of controversies these days with covid. And politics has not been a simple matter to stay out of. Many people have had enough. Benz puts all of this aside quite nicely in this video with Consuelo Mack this week. The full video here but I will highlight a few interesting points that I think are worth considering.  Starting with the numbers, Benz notes that there are 20.6 million job losses and a 14.7 million US unemployment rate. So, there continues to be real impact to large numbers of people in the economy. And the pandemic rages on: 20.7 million US covid cases .  When it comes to investment choices, Consuelo continues to bring up There Is No Alternative. More than a catchy acronym, the idea that people are searching for yield is a concept that might be driving stocks to ever higher prices. Benz dodges this well, and generally does a good job of providing advice which is applicable regardless of what your investments are in.  One key departure from this is a

  The Economist , dated Dec 12-18, 2020, has a cover story, "Will Inflation Return ?". The question is not if, but when. According to the article, three arguments for increased inflation include the following: 1. Pent up demand 2. Aging societies which reduce the number of overall workers 3. Complacent politicians, who are happy to spent more, even if it goes over 2% inflation targets in order to satisfy liabilities, specifically mentioning those related to health care for an aging population, see point 2 above. I find the article a competent summary, to be sure. And the question to me is not whether there will be inflation. There will be. The question I am having for myself is twofold: 1. When will it show up? 2. How will it show up? I find that this, along with many other macro-level items are some of the most interesting aspects of finance for me. While they are tough to bet on individually, that is exactly what I am going to discuss here.  Regarding when it will show up,