Do the Federal Reserve policies aimed to tame inflation guarantee a recession? — In order to put a stop to inflation, the traditional way is for the Federal Reserve to use one of its powerful tools. Raise interest rates. The theory is that major purchases (cars and houses for consumers, and machinery and equipment for the business sector) typically become more expensive as…

Economists weigh in with some statistics. — Prices have been increasing at rates not seen for over 40 years. Simply put, what cost you $15 thirty years ago, will cost you $60 today. A few prices (gasoline) have fallen recently, housing prices are settling down, and some travel costs are down. But they are the outliers. Food…

Here’s some free advice. — Someone once asked the Oracle of Omaha, Warren Buffett, why doesn’t everyone invest like you do and become rich? His answer was that few have the patience that he has. Most want instantaneous riches and that only happens with relatively few people. Good advice when the stock market falls-patience. It…

Can using this theory help you make better economic and financial decisions? — Let’s start with some definitions. Qualitative research. Qualitative research gets data and information directly from others. For example, case studies, interviews, questionnaires, observation, and documents. The data is usually nonnumerical. Subjectivity. This refers to how your opinion, biases, and feelings are affected by outside influences. So, someone growing up in…

Better safe than sorry. — Is the stock market going to crash? Who knows? Depending on which forecaster you follow the answer is maybe yes, maybe no. One thing is certain, however, the market’s going to fluctuate. In any event, it’s better to be prepared for a crash, just in case. There’s no specific definition…

A interesting approach to investing. — Buying stocks is usually based on fundamental analysis, technical analysis, friends’ recommendations, hot tips, social media rants, and other reasons. The newest fad on the street is ESG investing. It is becoming popular with large investors such as pension funds, but also some small investors use it trying to achieve…

How does it impact stock market investors? — We’re familiar with Murphy’s law: If anything can go wrong, it will. (I like to add, “and at the worst possible time.”) Then there’s the Peter Principle. Lawrence J. Peter found that as long as you are doing well at your job, you will get promoted. As soon as you…

A widely used indicator explained. — The fancy dictionary definition from Wikipedia is: “Stochastic refers to the property of being well described by a random probability distribution.” For stock market traders a stochastic oscillator (SO), or stochastic indicator, is used ​ to attempt to predict a reversal in trend. …

Everything you need to know to weather the storm. — The stock market has slipped this year; some might say cratered. Interest rates have risen (this is written in late May 2022), there is a war in Ukraine, and a slowdown in the Chinese economy. All this has investors jittery. …