Mike Zaccardi

WHEN I WAS IN COLLEGE, I thought I had investing all figured out. I’d taken a handful of finance and portfolio management courses, I’d allocated real money for the University of North Florida’s student-managed fund, and I’d researched individual stocks, mutual funds, exchange-traded funds and even options.
But my confidence was crushed by a year of unsuccessful options trading when I was age 20. Nonetheless, through my 20s and into my 30s, I remained optimistic that I could earn handsome long-run returns by overweighting a few investment factors—such as smaller companies and value stocks—and by having plenty of foreign stock exposure.

I GOT CAUGHT UP IN some weird investment fads during the recent era of 0% interest rates. With cash investments and bonds yielding almost nothing, I instead sought to pad my investment returns by opening new brokerage accounts to snag promotion cash, and by dabbling in digital currencies and newfangled alternative investments.
Result? I ended up with far too many financial accounts—and it became a burden to keep track of everything. Just a year ago,

I STEPPED TO THE podium for the first time in more than three years. My presentation skills were perhaps a bit rusty, but I jumped at the opportunity earlier this month to speak at my former employer’s annual symposium. It felt great to see so many familiar and friendly faces, including old teammates, workplace acquaintances and former clients. It was also no big secret that I was curious about an open position at the company.

WHAT A DIFFERENCE a rally makes. So far this year, the S&P 500 is up more than 6%. Not bad considering the doom and gloom from Wall Street forecasters at the end of 2022. Recall how strategists in early December were projecting large-cap U.S. stocks to finish 2023 in the red. Naturally, the market did the opposite of what most experts were thinking.
Stocks soared to jumpstart the new year. Many regions notched their best January in decades.

WALL STREET WAS stunned Friday morning by the strength of the jobs market. While technology company layoffs have lately hijacked the fear-mongering media’s narrative, the truth is that the employment picture is quite strong.
With a 517,000 gain in net employment last month, along with ebbing wage growth, the “soft landing” crowd is one big step closer to winning the battle against the recession prognosticators. True, January’s jobs jolt is merely one data point.

JUST LIKE THAT, growth stocks are back in vogue. Vanguard Growth ETF (symbol: VUG) has outpaced Vanguard Value ETF (VTV) by more than nine percentage points over the past three weeks. That gap in favor of “risk-on,” meaning mainly technology shares, is the biggest since those two exchange-traded funds were created some 19 years ago.
What gives? Weren’t all the strategists proclaiming a new era of value investing? It still seems that way based on what you hear on financial TV and read in investment magazines.

THE MARKET IS NOW in the heart of the corporate-earnings reporting season. Traders will soon be digesting big tech’s fourth-quarter profits, as well as a Federal Reserve meeting and monthly jobs data. That’s a lot to take in. Volatility must be high with so much hanging on the line, right? Wrong.
The Volatility Index, or VIX, has dropped significantly, nearing levels last seen during 2021’s bull market. At less than 20, the VIX—known as Wall Street’s “fear gauge”—implies a somewhat tame 30-day S&P 500 price change of less than 6%.

I BEGAN WRITING for HumbleDollar in early 2020. As a market junkie, but one who’s also deeply curious about personal finance, I was already a regular reader of the site.
Since then, I’ve contributed roughly 140 pieces. My articles and blog posts often focus on the financial markets and long-term investing, with a nod toward the financial independence movement. What do my 10 favorite posts have in common? They’re mostly focused on macro trends and my own financial journey.

LAST FRIDAY’S U.S. JOBS report was just what the doctor ordered. While much attention gets paid to the headline change in employment—which was a solid 223,000 gain in December—the bullish news was in the report’s details.
Average hourly earnings, a key measure of wage growth, were up 4.6% from a year ago, significantly less than the 5% consensus expectation. Weekly hours worked were also a smidgen less than forecasted—another “cool” reading on the inflation front.

THERE ARE MANY WAYS to gauge whether individual stocks and the overall market are expensive. But which valuation metric should you rely on?
The fact is, you can find metrics to buttress any market narrative you want to believe. Such confirmation bias can prompt investors to make big changes to their mix of stocks and more conservative investments—sometimes with disastrous results.
As a market analyst, writer and former university finance instructor, I’m familiar with a host of valuation tools.

FEELING DESPONDENT about your 2022 investment returns? Yes, it’s been a grueling year for almost all stock and bond investors. But some folks have been hit far harder than others.
In the bounce back from 2020’s coronavirus market crash, near-zero-percent interest rates, coupled with consumers flush with cash, made for pockets of irrational exuberance. High-risk growth stocks—like those owned by Cathie Wood’s ARK Innovation ETF (symbol: ARKK)—captured the imaginations of Wall Street and Main Street alike.

LAST WEEK MIGHT HAVE been the moment we flipped from inflation worries to recession risks. On Tuesday, November’s inflation report turned out to be cooler than economists expected. Stocks initially soared, only to sell off toward the end of the day in anticipation of Wednesday’s news. Sure enough, the next day, Federal Reserve Chair Jerome Powell delivered not only a 0.5-percentage-point interest rate increase, but also a stern message in his press conference afterward.

ARE YOU TRAVELING for the holidays? There’s good news for drivers. Average retail pump prices have dropped below $3.30 a gallon, with many states seeing prices under $3. This positive development for consumers—including those off to grandma’s house this season—comes as wholesale gasoline futures fall to their lowest level in a year.
Following Russia’s invasion of Ukraine in early 2022, and just in time for the busy U.S. summer driving season, gas prices notched all-time highs near $5 per gallon.

DO YOU THINK differently about money today compared to a year ago?
Cast your mind back 12 months. Interest rates were near record lows, cryptocurrencies were surging and stocks were hitting new highs day after day. Checking your investment account balance was an instant dopamine hit. Ditto for homeowners, who could get a sense for their home’s skyrocketing value by perusing the local listings.
Last year was also a time when many Americans called it quits from the nine-to-five grind.

I HAVE CHEERY investment news: Most Wall Street strategists are bearish on stocks. Last week, Bloomberg reported that 2023’s projected change in the S&P 500 by the best and brightest forecasters is negative. That hasn’t happened since at least 1999. Consider today’s bleak consensus to be a contrarian indicator. It could set the bar low enough for a decent 2023.
If you flip on financial TV or peruse investment magazines at this time of year,

THE FTX FALLOUT IS something to behold. It’s said that the now-bankrupt cryptocurrency exchange has liabilities that could end up being twice what Enron owed when it collapsed more than two decades ago. The hubris of Sam Bankman-Fried (also known as SBF), founder of FTX, is something all investors can learn from.
It was just a few months ago that Bankman-Fried was dubbed the next Warren Buffett and 2022’s version of the late 19th and early 20th century financier J.P.

I’M 34 GOING ON 74. Like an old man set in his ways, I routinely prepare my own meals and rarely go out to eat. But last week, I shook things up by scarfing down some ribs at a nearby outdoor mall. I couldn’t help but notice all of the “now hiring” signs.
It’s a far cry from when I ventured to the same mall in March and April 2020. Do you remember that feeling—the uncertainty and anxiety about what life was going to look like amid the height of the pandemic?

VALUE STOCKS ARE having quite the year—at least relative to growth shares. This past week underscored that trend, with the value-oriented Dow Jones Industrial Average (DJIA) rising every day. Barring a big drop today, October will mark the index’s best monthly performance since 1976.
Even as the Dow rallied 5.7% last week, the growth-heavy Nasdaq Composite index rose just 2.2%. For the year, the Nasdaq is down 29%, versus less than 10% for the Dow.

AS INFLATION continues to run hot, wage gains for the bottom quartile of income earners are almost keeping pace with consumer prices. Meanwhile, checking account balances for this group remain more than 50% above pre-pandemic levels.
Is everything A-okay? Of course not. Still, I’d argue that many Americans have positioned themselves well to weather an economic downturn. Another sign: Average credit scores are much improved from, say, the mid-2000s, when families were loading up on debt and speculators were snatching up houses only to flip them months later.

LAST WEEK’S INFLATION report did the bulls no favors. The latest reading on the Consumer Price Index showed a larger-than-expected September rise, mostly due to housing data, which tend to respond slowly to higher interest rates. Then came Friday’s University of Michigan Consumer Sentiment Survey, which showed an unexpected jump in inflation expectations over the next year and next five years. Result: Bond yields climbed and stocks finished the week lower.
But there’s also good news: Among economists,

THERE’S AN INVESTOR sentiment chart that gets dusted off and passed around after long periods of market malaise. Using the chart, active investors aim to identify when people have given up on stocks, so they can buy shares at the point of maximum pessimism.
Looking back, it appears that late 2021 marked the chart’s “euphoria” phase, and we’ve since been descending through the stages that follow—anxiety, denial, fear and so on. Which phase are we currently in?

I ADVISED LAST OCTOBER that loading up on holiday gifts ahead of the main shopping season probably made sense, given problems with the supply chain. Foreign manufacturers were struggling to produce enough goods, plus many items were stuck in ships anchored off the ports of Los Angeles and Long Beach, California. Parents across the country, flush with cash, were frantic about getting their kids the latest hot toys.
What a difference a year makes.

SERIES I SAVINGS bonds might be the best-performing investment in folks’ portfolios this year. With steep losses in both the stock and bond markets, I bond’s 9.62% current yield looks like a home run. But the playing field could be shifting.
How so? Yields on the federal government’s other inflation-linked bond—Treasury Inflation-Protected Securities (TIPS)—are up sharply in 2022. Result: TIPS aren’t such a bad buy today and perhaps better than Series I savings bonds.

WHILE THE S&P 500’s price-earnings (P/E) ratio has little predictive power if you look at returns over the next 12 months, it’s more important if you stretch out your time horizon to five years and beyond. What you pay has a significant impact on your likely long-run return—and that should be comforting for today’s buyers.
Recently, WisdomTree Global Chief Investment Officer Jeremy Schwartz shared a compelling graphic showing P/E ratios for dozens of U.S.

MIDTERM ELECTIONS are less than two months away. The political landscape is uncertain and always fraught with heated opinions—but I won’t dive into that end of the pool. Instead, consider how the stock market might perform in the coming months and into 2023.
While technical analysis—using past price data to infer future prices—is controversial and dismissed by many fundamental investors, it’s hard to ignore a persistent bullish pattern that could soon repeat. Stock market history tells us that,

THE S&P 500’S RETURN so far in 2022, when compared to the same year-to-date stretch for previous years, ranks as the fourth worst since 1928. One result: Stocks look quite cheap. The market’s price-to-earnings (P/E) multiple has retreated as share prices have fallen while corporate earnings have continued to grow.
One chart in particular caught my eye last week. Each month, I peruse J.P. Morgan Asset Management’s Guide to the Markets.

FEDERAL RESERVE CHAIR Jerome Powell, speaking last Friday at the Jackson Hole Economic Symposium, said that bringing down inflation will mean “some pain” for households. But what sort of pain are we talking about?
Powell and the rest of the Fed members are hoping to create “tight conditions.” That isn’t some opaque description of the economy and financial markets. Instead, the term has four specific components that help dictate Fed policy.

The U.S.

ARE YOU READY FOR some football? Autumn is just around the corner and, if you’re like me, you can’t wait for those lazy Sunday afternoons kicking back and watching the gridiron. What about some munchies as you enjoy the on-field action? While the cost of everything food-related seems to be skyrocketing, there’s encouraging news for one popular football snack.
According to data from Bloomberg, wholesale chicken wing prices are down some 60% from a year ago.

ONE OF MY FAVORITE indicators right now is the ICE BofAML MOVE Index. Sound like trading jargon? Think of it as comparable to the VIX, except—instead of measuring stock market volatility—it does the same for bonds. Today, it’s indicating improving confidence in what’s lately been a very turbulent bond market.
MOVE is high when there are big daily swings in bond market interest rates. That’s what we’ve seen in 2022 as traders grapple with fast-changing economic data.

RECESSION FEARS are fading. Second-quarter corporate profits have been better than expected. Some recent economic data show key barometers in growth mode, even as the latest GDP report confirmed a second consecutive quarter of economic contraction. Indeed, this past Friday’s hot employment report cooled the debate over whether we’re in a recession.
The pandemic upended so many facets of life and business, and we’re still feeling the effects today, as evidenced by odd swings in what are often stable economic numbers.

MONEY MARKET YIELDS are no longer zero. Far from it. With the Federal Reserve raising short-term interest rates by another 0.75 percentage point last week, investors can now park their savings in a safe money-market mutual fund and earn more than 2%.
If you look at Vanguard Federal Money Market Fund (symbol: VFMXX), you won’t see a seven-day SEC yield that’s that high—yet. But give it a few days. Right before the Fed’s move last week,

INFLATION IS TAKING its toll on Americans’ view of the economy. But things could be a lot worse. Exhibit A: Europe.
Last week, the U.K. reported its inflation rate had surged to a four-decade high of 9.4%. June’s reading was a significant bump up from May’s 9.1%. Even higher inflation is expected as year-end approaches, with the Bank of England seeing annual inflation hitting 11%, according to The Wall Street Journal.
In fact,

THE RESEARCH TEAM at Bank of America put out a pair of seemingly contradictory investment notes last week. On the bullish side, the folks there pointed to extremely cheap valuations in the small-cap space. But a few days later, the economics department rocked Wall Street with a bearish forecast calling for five consecutive quarters of negative real U.S. GDP growth.
I chuckled at the sequencing: It’s often said the stock market leads the economy by about six months,

IF YOU THINK STOCKS have fallen fast this year, check out the collapse in the National Association of Realtors’ housing affordability index. The index tracks how financially easy it is for the typical family to buy a house with a conventional 30-year mortgage.
May’s reading of 102.5 is down sharply from the 154.4 recorded in December 2021 and it’s just a whisker away from the lowest levels seen in the past four decades. For those of us in the southern U.S.,

THE LATEST ESTIMATE for first-quarter GDP growth was issued by the Bureau of Economic Analysis (BEA) on Wednesday morning. While not market-moving news, it revealed that the economy shrank at an annualized rate of 1.6%, a tad worse than market expectations. The most surprising part of the revised estimate was the downward adjustment in personal consumption. Along with recent credit- and debit-card spending data, as well as comments from a few consumer goods companies,

STOCK INVESTORS are hanging tough. Bond investors? Not so much.
Citing flow of funds data from EPFR, Bank of America Global Research says investors collectively purchased $195 billion of stocks this year through June 22. The implication: People aren’t panicking. That’s great news, and it supports the narrative that today’s stock investors are less bullied by market volatility.
It’s a different story in the bond market, where we’ve seen so-called capitulation. Bank of America notes that $193 billion of bonds have been sold this year by investors.

MORE WEALTH HAS been lost in this year’s stock and bond market decline than in any previous downturn, according to research firm Bespoke Investments. And, no, that doesn’t include the $2 trillion of crypto value that’s gone up in smoke.
A counterpoint to this jarring reality: Folks today are wealthier than during previous bear markets. Goldman Sachs reports that U.S. household net worth as a percentage of disposable personal income remains sharply above pre-pandemic levels.

CONSUMERS’ MOOD HAS never been worse—at least according to the University of Michigan Consumer Sentiment Index. The monthly survey, released last Friday morning, paralleled the worse-than-expected Consumer Price Index report. May’s inflation reading notched a fresh four-decade high as Americans—and the rest of the world—grapple with soaring food and energy costs. The issue is front and center, and we all feel it every day.
The hits keep on coming. This weekend, AAA confirmed a grim milestone: The average price of a gallon of regular gas topped $5.

GAS PRICES TOOK another step higher last week—troubling news for the millions of families planning their summer vacations.
It’s already shaping up as a big travel year. An estimated 39.2 million folks hit the road or took a flight over the Memorial Day weekend, according to AAA, up 8.3% from last year. GasBuddy data show the average price for a gallon of regular unleaded was $4.60 over the holiday weekend. Steep? By July 4,

INVESTING FOR education costs has never been more popular, as evidenced by recent Morningstar data. The research company found that 2021 was a record-breaking year for assets in 529 college savings plans. At almost $500 billion, total investments are up nearly fourfold over the past decade.
A big reason is the tax advantages—investments grow tax-free if they’re used for qualifying education expenses—plus 529 accounts are treated relatively leniently under the college financial-aid formulas. You can learn more about the accounts from other authors who have real life experience saving through 529 plans.

BEAR MARKET territory. On Friday, that phrase was all over the “financial pornography” channel, as commentator Carl Richards labels it. During trading, the S&P 500 finally dropped 20% from its early January all-time closing high. In truth, that number alone doesn’t mean much. Consider that stocks in both 2011 and late 2018 briefly encroached on 20% before bouncing back in a big way.
The media was ready last week to go with all the flashing banners and alerts.

AMID THIS YEAR’S market wreckage, perhaps the most disappointing performers have been target-date retirement funds (TDFs).
Many 401(k) investors are familiar with these products. Just one of these funds can be used throughout your investment lifetime, as it automatically shifts from a stock-heavy portfolio in the decades leading up to the targeted retirement date to owning more bonds in the years immediately before and after the target year. Normally, performance is pretty steady for TDFs close to their target date,

WHEN I STUDIED FOR the Chartered Financial Analyst (CFA) exams, I snagged extra prep time by listening to textbooks while commuting. As boring as that sounds, it helped me absorb the dry curriculum—and it made listening to financial information part of my daily routine.
While I no longer commute—or even own a car—I continue to plug in my earphones to catch up on the latest investment insights, often during my afternoon walks. Here are my eight favorite podcasts:

The Long View.

HAS THE ECONOMY reached peak inflation? That might be the biggest question in financial markets right now. Economists at several Wall Street firms, including Goldman Sachs and Bank of America, say the highest pace of consumer price increases may now be in the rearview mirror.
Inflation is typically measured as a percent change from a year ago. From here, prices for goods and services may still go up, but at a slower pace. That’s the hope.

EVERY MARKET DECLINE is different, but all of them can feel unnerving, even for the most steadfast of investors. Spooked by 2022’s financial market turmoil? There’s good news: Stock and bond values today look much more compelling than at the turn of the year.
Thanks to 2022’s 14% drop, the S&P 500 now trades below its five-year average price-to-earnings (P/E) ratio, based on expected profits. On top of that, corporate earnings rose impressively in this year’s first quarter.

THE S&P 500 IS DOWN 10% so far this year—but the pain hasn’t been dished out evenly. Value and steady dividend-paying stocks are about flat for 2022, while technology companies and speculative small-cap stocks have suffered mightily. Money has fled the market’s unprofitable glamor companies and flocked to old-fashioned cash flow generators.
Just how bad has the drubbing been among formerly hot growth names? Look no further than Cathie Wood’s ARK Innovation ETF (symbol: ARKK).

EXPERIENCED INVESTORS know that the stock market and the economy sometimes diverge. Early 2020 offered a stark example: Even as the economy was still contracting rapidly, stocks started bouncing back.
But right now, many areas of the stock market are doing about what you’d expect. After all the efforts by the Federal Reserve and Congress to prop up the economy over the past two years, rising inflation is front and center, along with rising interest rates. 

IN THE MARKET FOR a home loan? Chances are, you aren’t pleased. Amid soaring real estate prices and intense demand, mortgage rates have climbed above the psychologically important 5% threshold. Mortgage News Daily published its rates update on Friday afternoon, and the figures weren’t pretty for prospective borrowers. The 5.06% average 30-year fixed-rate mortgage is close to the highest mark since late 2008.
Meanwhile, over the past 12 months, home prices are up 19.2%,