PaulBBrown

A Bad Idea -- Understandable Though It May Be

Bank of America is currently running ads that on the surface sound appealing. They are offering to let you put your retirement savings in things that are guaranteed. Given the recently performance in the market, who wouldn’t want that? The answer should be: You. Guaranteed investments are the not the way to go, if you are saving for a long-time goal (like retirement.) The returns on such things as money market funds, and certificates of deposits, even if they are guaranteed may not be enough to keep up with inflation, let alone produce the long-term growth that you need. More…

Life Is Unfair. Deal With It.

Over the weekend, friends were complaining about the fact that the worth of their retirement accounts have plummeted this year. I told them the following: In a perfect world, the value of our retirement savings would climb every single year from the time we put the money in, until we decided to finally use the funds to pay for the retirement of our dreams. We would never suffer a financial crisis caused by divorce or illness. And we never find ourselves suddenly unemployed or the victim of the plummeting stock market like the one we experienced in 2008. More…

Bad News Bargains

I know this could sound callous, and I don't mean it to, but all the bad economic news has created bargains everywhere you look. Stocks (of good companies) are cheap. Banks are offering suprising high rates on CDs and retailers are offering incredible inducements. I am down in Florida as you read, and restaurants are offering meals for 50% less than the last time I visited a couple of months ago. The takeaway message: If you husband your money in good times there will be wonderful opporutnies when things turn bad (as they invariably do.) More…

A Definition of Insanity

The Dow industrials declined nearly five percent on Friday. Blue chips have lost 929 points--or 9.7 percent--in two sessions. That's the biggest two day drop since the crash in October 1987, and according to the Wall Street Journal the largest two-day point loss ever.  The reason for the decline? The market is getting continuing confirmation of all the bad news it was expecting. Yesterday's bad news: Slower retail sales as consumers cut back. The market reaction makes no sense to me. The market fell off a cliff last month, on the expectation of bad news. Now, it falls even further, when it gets the news it was expecting. Sigh. The only thing to do is hold on until the so-called investment professionals come to their senses. More…

Vote

The cliche "if you didn't vote, you can't complain" isn't completely right. This is America. You can complain about just about anything at any time. But you will have a whole lot more credibility, if you voted. Please do. More…

Why Would You Say That?

American Express has announced that it is going to tighten its belt, in light of the economic downturn. Cardholders aren't spending as much, and so the firm is going to lay off people, the announcement read. I understood that part. They also said they are cutting back on corporate travel and entertainment. Even if that is true, if a huge part of your business is based on getting your customers to travel and enterain, why would you tell the world that YOU are against the things that make up the core of your business? More…

No Fair Peeking (at your 401K)

The Dow climbed just about 11 percent yesterday, in anticipation that The Fed will cut interest rates again. I did NOT check the value of my retirement accounts last night. To quote one of our great philosophers (Dr. Seuss from Horton Hatches the Egg): "I meant what I said, and I said what I meant. (An elephant's faithful, one hundred percent.)" I said I wasn't going to check the value of the accounts to the end of the year, given the market meltdown. And one good day is not going to change that. If you are happy with the way your reitrement accounts are allocated, I still believe this is the best strategy. More…

Which Side of the Economic Debate are You On?

It isn’t often that I have a direct connection to the news (other than reporting it.) Yesterday was an exception. While sitting on a plane, I had the chance to read about two of my former employers who are caught up in the economic downturn. One is a hopeful story, at least as far as the economy is concern. The other is not. Let’s begin with the bad news. “The Star-Ledger of Newark plans 40% cut” read one headline outlining, in matter of fact fashion that the largest newspaper in N.J.—and the place that had given me first job—had fallen on hard times and four of 10 people were being let go. More…

OPEC as a Leading Indicator

The folks who run the Organization of Petroleum Exporting Countries (OPEC) think they have a pretty good handle of where our economy is heading and their conclusions are not pretty. The more concerned OPEC is about our economic future, the more they cut the price of oil--in a hopes to spur demand. The price at the pump--and in our oil heating tanks--has been steadily falling which tellls you they are not expecting any turnaround soon. Swell. More…

The Great Recession?

I understand the marketing. And on one level I appreciate it. If the economy is going through hard times, why not offer coffee for a nickel (Krispy Kreme) and offer huge breakfasts for $4 like Denny's is doing and offer other Depression-style deals. (Referring to the Depression and current Recession as you do it.) But I wonder from a psychology point of view if it is helping things. Doesn't it just reinforce how bad things are? More…