2nd Quarter Economic Update | August 2018

2nd Quarter Economic Update | August 2018

The 2nd quarter increase in real GDP reflected increases in consumer spending, exports, business investment, and government spending.  The only decreases were in business inventory investment and housing investment.  The increase in consumer spending reflected increases in services and both durable and nondurable goods.  The unemployment rate is low, wages are increasing and people, in general, feel good about their financial situation.  The increase in exports reflected increases in exports of goods.  Clearly a result of foreign companies purchasing supplies prior to tariff rate increases going into effect. 

Concerns, however remain.  Last quarter we noted the possibility of the economy overheating.  We now believe this is less likely because of the potential impact of a global trade war.  Business activity appears to be slowing as companies weigh the odds of there being a trade war or not.  As is, the tariff increases that have been implemented are small relative to global trade.  The real danger continues to be the uncertainty about what happens next.  If trade tensions sap business confidence, causing executives to put off capital spending and other investment decisions, then the damage could get serious.  Time will tell. 

Matt's Monthly Money Must Do's | August 2018

Matt's Monthly Money Must Do's | August 2018

August 4th is Coast Guard Day.  Alexander Hamilton, along with the help of US congress, authorized the building of a fleet of Revenue Service Cutters.  The August to do’s all relate to keeping yourself safe and limiting your exposure to harm much like the Coast Guard does with boaters every day.

  • Protect your home

  • Protect your kids

  • Protect your financial accounts

The Tariff Tiff | History Repeating Itself

The Tariff Tiff | History Repeating Itself

“History doesn’t repeat itself, but it often rhymes.” – Mark Twain

Financial crises have hit the global markets on a regular basis throughout history.  And it appears financial crises will continue to pop up at regular intervals into the future.  The first recorded speculative bubble was Tulip Mania in 1637, a period in the Dutch Golden Age during which the prices for fashionable tulip bulbs reached extraordinarily high levels only to dramatically collapse.  Today, we view stocks, bonds and commodities as our investments of choice and, as always, current events continue to cause the financial markets to fluctuate, sometimes dramatically. 

Here is a brief history of major financial crisis that have hit the globe in the past few decades.  Each time, the stock and bond markets have taken a beating.  And time and again, they bounce back to higher highs.   

Matt's Monthly Money Must Do's | July 2018

Matt's Monthly Money Must Do's | July 2018

The 4th of July seems like such an odd thing to celebrate.   We are really celebrating the most famous divorce decree ever written.  Don’t get me wrong, I love the document, but it was just a bunch of bitter guys generating a divorce decree with barely any input from the counterpart. 

From now on, I believe we should turn Independence Day into Financial Independence Day.  Start celebrating those who have hit financial milestones.

On to the To-Do’s…

Common Pitfalls of Comparing Investment Returns

Common Pitfalls of Comparing Investment Returns

I hear it all the time.  Having lunch with a friend, “My portfolio is up 15%” or from a friend at another financial firm, “Our portfolios are up 10%”.  My initial reaction is to do a quick back of the napkin comparison.  Reality sets in and I start asking questions to better understand what they are talking about.  What I realize is they are quoting raw returns.  The raw return is the return over a past time period (such as 6 months, 1 year, etc.), without adjusting for risk.   Looking at only the raw return can twist your perceptions about how your portfolio is performing and lead you to bad choices – i.e. taking on more risk or flip-flopping from one investment strategy to another. 

Rediscover the Simple Things in Life

Rediscover the Simple Things in Life

Sometimes keeping up with the Jones’ can be exhausting.  It is human nature to often fall into the same traps as our friends and neighbors.  If they go on exotic vacations, I must go on an exotic vacation.  If they join the country club down the street, I must join.  Truth is there are many kinds of fun that don’t cost money–a lot of the things that people did years ago before the advent of 3D movies, gourmet restaurants, traveling soccer teams and endless consumerism.

Matt's Money Must-Do's | April 2018

Matt's Money Must-Do's | April 2018

April is Financial Literacy month in the United States.  In 2003, Congress finally supported the idea of financial literacy month.  Because it was officially recognized by Congress, a big push was made from various non-profits and government agencies (National Financial Educators Council, Financial Literacy and Education Commission, and National Endowment for Financial Education) generated tools and courses for families to utilize to improve your financial situation.