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Make a Wish

Ron Wayne  |  Dec 21, 2021

ECONOMISTS SUGGEST we stop spending excessively on Christmas gifts and instead buy more prudently or efficiently, according to an NPR story. Modern scrooges, you say? Not really.
The economists questioned believe huge amounts of money are wasted because we buy gifts that recipients don’t want, like or keep. In the interview, economist Tim Harford suggests more thoughtful gift-giving by, say, using wish lists to buy folks what they really want. We’ve been doing this in my immediate family for years,

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Living Simply

Richard Quinn  |  Dec 21, 2021

HOW MUCH INCOME do I need to retire? That’s a question many Americans have. I recently learned the hard way how different the answers can be. On a Facebook group, a person posted the question, “Can I retire on $40,000 a year?”

I thought the question was about living on $40,000 a year after earning a much higher salary. I was wrong and insensitive. I replied from my life perspective that it would be tough to live on that amount for 30-plus years in retirement.

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Taking Shelter

Sanjib Saha  |  Dec 20, 2021

EARLIER THIS YEAR, I swapped the Vanguard Short-Term Bond Index Fund (symbol: VBIPX) in my 401(k) for an inflation-indexed Treasury ETF (VTIP). The trade worked out well: The replacement fund has since fared better, thanks to this year’s accelerating inflation.
To buy the inflation-indexed ETF, I had to open a brokerage subaccount within my company’s retirement plan—a feature some 401(k)s offer, though these “brokerage windows” typically aren’t heavily promoted for fear employees will end up trading too much.

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Will Bulls Cheer?

Mike Zaccardi  |  Dec 19, 2021

THE HOLIDAYS MARK a festive period for stock market bulls. The final two weeks of the year and the first several trading sessions of January have historically seen unusually strong gains for the S&P 500 stocks, according to research from Bank of America. Since 1928, the final 10 trading days of December have averaged gains of 1.19% and the first 10 sessions of January have returned 0.72%.
Why has the S&P 500 performed well during this stretch?

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Training the Mind

Jim Wasserman  |  Dec 19, 2021

WITH THE SURGE of urbanization in the 19th century, many folks became concerned by the seeming rise in bad behavior. This behavior could be illegal—such as theft—or legal but undesirable, like alcohol abuse.
Nascent social sciences, including sociology and psychology, developed two alternative theories. “Moral Deficit” theorists said people engaged in bad behavior because they were internally “weak.” You might have seen a movie scene where a hysterical person is slapped with the admonition to “get a hold of yourself.” Or you might be familiar with the approaches of The Salvation Army and YMCA,

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Under the Tree

Richard Quinn  |  Dec 18, 2021

EVERY YEAR AROUND this time, I think about one of the most memorable events in my life.

As a child, I was fascinated by trains. My father was a railway tower signal man during the Second World War and later a station master. My first toy trains were plastic and battery operated, not true electric trains. One year, I pleaded for a real set. To my surprise, American Flyer trains were under the tree Christmas morning.

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Pick Your Poison

Howard Rohleder  |  Dec 17, 2021

TRAVELING DURING the holidays? As we drive east out of Ohio and into Pennsylvania, we know to fill the gas tank before we cross the border. According to the Tax Foundation, Pennsylvania has the third-highest gasoline tax in the country, behind California and Illinois, and about 20 cents per gallon higher than Ohio.
All states have to balance their budget. But they take very different approaches. This provides 50 experiments in taxation—and those taxes influence our behavior.

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A Beautiful Mind

Richard Connor  |  Dec 16, 2021

I STARTED MY CAREER with a little-known engineering company called SAI. It’s now called SAIC, short for Science Applications International Corp., a publicly traded and internationally renowned technology firm. But when I started in 1980, there were only a few thousand employees and several small, independently run offices scattered across the country.
SAI was started in 1969 by Dr. J. Robert Beyster, a nationally recognized expert in nuclear physics and national security. He started the company with the dual tenets of technical excellence and employee ownership.

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Giving Experiences

Mike Zaccardi  |  Dec 16, 2021

GIFT CARDS ARE BIG business. More than $28 billion is expected to be spent on gift cards this holiday season, with an average value of almost $50 per card, according to the National Retail Federation’s winter holidays report. This season, consumers want gift cards above all else, says the survey, and restaurants are the most popular category.
I’ve changed my mind about gift cards. I used to think they were a ridiculous way to show appreciation.

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Kids These Days

Kyle McIntosh  |  Dec 15, 2021

A FEW WEEKS BACK, Jonathan Clements wrote an article reminding readers that they, too, likely made financial missteps in their younger days. His article was in response to comments by HumbleDollar readers about the perceived lack of financial discipline shown by those currently in their late teens and early 20s.
Before my recent career change, I would’ve had the same opinion as many readers. With my new job teaching accounting to undergraduates,

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Time Is Running Out

John Lim  |  Dec 15, 2021

INFLATION CONTINUES to sizzle. November’s Producer Price Index (PPI) rose 9.6% from a year earlier. Even after removing food and energy, PPI was up 7.7%. Both figures are the highest since 2010, when such data were first compiled.
This follows last week’s Consumer Price Index report, which showed inflation climbing 6.8% over the past 12 months. Since consumer prices lag producer prices, we can expect little relief from inflation in 2022.
All this must be foremost on the minds of Federal Reserve members as they meet this week.

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Heading Abroad

Mike Zaccardi  |  Dec 14, 2021

NATIXIS INVESTMENT Managers just released its 2022 institutional investors’ outlook. The firm surveyed 500 portfolio managers, asking their thoughts on what the next year might look like in the financial markets. The managers—who oversee $13.2 trillion of assets—were generally optimistic, but didn’t expect the recent torrid pace of stock market gains to continue.
The survey found that 35% of institutions plan to decrease exposure to U.S. stocks, allocating more to developed European and Asian markets,

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The un-COLA

Richard Connor  |  Dec 13, 2021

SENIORS RECEIVING Social Security celebrated the recent announcement that their benefits will increase 5.9% this January. It’s the largest cost-of-living adjustment (COLA) in 40 years, and it’s based on a measure of inflation called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
As the name implies, CPI-W is a “monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.” The index jumped 5.9% between the third quarters of 2020 and 2021.

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Reading Rates

Mike Zaccardi  |  Dec 12, 2021

THE MARKET SEEMS to have found its footing when it comes to inflation. Friday’s Consumer Price Index report was roughly in line with expectations. Recently, there haven’t been any major shifts in the experts’ inflation forecasts. The bond market has also calmed down. Just a few weeks ago, the 10-year Treasury yield neared 1.7%. It settled at 1.49% on Friday.
Volatility could reemerge later this week, however. Data on producer prices post on Tuesday,

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Me Fighting Me

Jim Wasserman  |  Dec 12, 2021

PSYCHOLOGISTS and biologists call it a supernormal stimulus response. Basically, organisms evolve in the direction of what’s good for them. There doesn’t seem to be an off switch to this instinct, however, so organisms can pursue these “good things” even to their detriment.
For instance, field researchers have shown that birds instinctually drawn to colorful eggs will roost on more colorful fake eggs—and ignore their own. And, no, humans aren’t immune to such mistakes.

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