AMONG THE FINANCIAL topics grabbing investors’ attention, inflation for many years was near the bottom of the list. In fact, between 2010 and 2019, inflation averaged just 1.8% a year, and the Federal Reserve was looking to lift that rate. Throughout 2019, the Fed lowered its benchmark interest rate multiple times, citing inflation that was running below its preferred level of 2%.

But just a few years later, in the midst of the pandemic, all that changed.

 
This month’s AARP bulletin has an article titled “Make your Retirement savings last”.
 
 
This article points out that retirement investing is for the longer term and one should not sweat short term market movements. It also points out that there is one short term danger, however, that we should all be aware of.
 
 
Let us assume when you retire, the stock market is doing very well. You take a lump sum pension payment or consolidate accounts into an IRA and fully invest your nest egg.

In 1975 the Social Security COLA was 8%, in 1979 9.9%, 1980 14.3% and 1981 11.2% reflecting soaring inflation. I project 2025 will be 2.3% or less if inflation keeps falling. 
During the oil embargo in 1974 gasoline jumped 35% a gallon in one year to $0.53 a gallon equivalent $3.36 in 2024 – if you could get gas then. As of July 8 the average US price a gallon was $3.608 with significant variations by state and individual station –

FROM THE COLOSSEUM in Rome to the palace at Versailles, look around Europe and you’ll find artifacts of once-great empires. What happened to them?
Each faced its own challenges, but there was also a common theme: They had poor financial management and became overburdened by debt. That’s why a recent analysis in The Wall Street Journal—titled “Will Debt Sink the American Empire?”—is worth our attention.
In 2024, the federal government’s budget deficit will come in at $1.9 trillion.

Question for the forum, does anyone research the banks/CUs they use to assess bank health/safety?  I have leveraged Veribanc for years to check up on my banks and have both left banks as the ratings for that bank fell into disfavorable as well as not choose a bank after reviewing their report card and finding it less than stellar.  Just wondering what others on here might be doing (looking for ideas that will improve my processes here). 

How Long, a big rock hit in the seventies, opens with, “How long has this been going on?” A guy who suspects his lady is cheating on him declares “I’m not dumb.” I can’t say the same for  myself, because I’ve been having a five-year affair with the wrong size stock and I’m not so sure I can take it anymore.
While the whole world has been piling into large cap stock funds,

For the last five or so years, I’ve held a disproportionately large position in the Vanguard World Stock Index ETF (VT). This fund has given me “coverage” of the global markets, including a 40% stake in international stocks. Originally, I congratulated myself on my cleverness. After all, VT is monstrously diversified and dirt cheap and, besides, foreign markets were deemed sorely undervalued by the market cognoscenti.
But were they really? As of now, my shrewd little maneuver has left my portfolio performing embarrassingly below the return of the “simpleminded” and home-biased—but inordinately domestic tech/heavy—S&P index funds.

IN TRYING TO FORETELL the economy’s direction, former Federal Reserve Chair Alan Greenspan has shown “a keen interest in men’s underwear,” according to CNN Business. “He sees underwear sales as a key economic predictor.”
This isn’t because Greenspan is preoccupied with nether garments. Rather, says an NPR reporter, he believes that “the garment that is most private is male underpants because nobody sees it except people like in the locker room.”
Yes, the men’s underwear index exists.

I HAVE NO IDEA HOW stocks will perform this year or next. But I have full confidence that a globally diversified stock portfolio will fare just fine over the decades ahead.
My optimism, it seems, isn’t shared by many HumbleDollar readers, who fear we’re facing some rough years for the economy and the stock market. How do I justify my optimism about the long term? Here are five reasons.
1. Heads I win,

OUR ANNUAL INTEREST and dividend income in 2024 will exceed my inflation-adjusted pay as a mailroom boy in 1961. Of course, back then, I earned a bit over minimum wage. It’s been a long journey.

Below are the daily net portfolio gains and losses for the third and fourth weeks of last month. These figures reflect our cash account, index and actively managed stock funds, corporate and municipal bond funds, two utility stocks and two variable annuities.

MARCH MADNESS IS upon us, with millions of sports fans rooting for their favorite college or university basketball team. For your team to win, all other teams in the tournament must lose—a zero-sum game. We accept this as part of the sport.
What’s that got to do with finance? Household economics can be a similar win-lose tournament. But it’s a zero-sum game that’s rarely acknowledged.
Relative purchasing power. In the U.S., we have some 130 million households that collectively possess roughly $150 trillion in wealth.

IS A STORM COMING? Long before I discovered HumbleDollar, I regularly read articles by Scott Burns. Now in his 80s, Burns was a popular financial columnist who wrote for the Boston Herald and later The Dallas Morning News. He’s a graduate of Massachusetts Institute of Technology, so he’s comfortable presenting quantitative arguments. Burns is an advocate of low-cost index funds, and he helped popularize couch potato investing,

AT THE RISK OF CAUSING readers to think too much on a Saturday morning, let me start by offering a pair of seemingly contradictory statements:

The financial markets are efficient, but occasionally go stark, raving mad.
Nobody knows what stocks are worth, but they have fundamental value.

My contention: There’s a payoff to be had from grappling with these two apparent contradictions—a payoff that takes the form of greater calm in the face of market turmoil and improved long-run portfolio performance.

DO YOU EXPECT IT TO be warmer this winter in Minneapolis or in Miami? This isn’t meant to be a trick question. We’d probably all agree that it’ll be warmer in Miami. But what if I asked you to predict the precise temperature in either city on Jan. 1. This is a much more difficult question.
In his book Mastering the Market Cycle, investor Howard Marks uses illustrations like this to make an important point.

PERHAPS YOU’VE SEEN charts like the one below, which comes from Dimensional Fund Advisors. The message: Investors who try to time the market in search of better returns often end up damaging their results. To many investors, this seems intuitive, because trading isn’t easy.
But to others, market timing appears to make a lot of sense. For instance, for years, Yale University professor Robert Shiller has been maintaining a measure of market valuation known as the cyclically adjusted price-earnings (CAPE) ratio.