Blog Posts

If you have a retirement portfolio, chances are it has a lot of equity exposure. Your biggest fear probably relates to the capital losses that could occur. Unlike your house, its value isn’t marked to market each day like the stocks you own, so the latter gets a lot more attention in terms of how […]

The US can always pay its bills because it has the power to “print” money. The Federal Reserve controls money creation in the US.  So even if the US has bad finances, as it does – i.e., it spends more than it earns and has more liabilities than assets – the country can always satisfy […]

Low interest rates throughout the developed world mean little to no return on cash or bonds. In fact, when the inflation rate exceeds the nominal return on a fixed-rate instrument, your spending power is actually declining. But there’s still widespread demand for liquid, reliable sources of return.  Bonds usually less volatile than stocks, often significantly […]

Bitcoin is well-known for its volatility. For example, in 2021 alone it more than doubled from January through the middle of April, then fell by more than 50 percent in the next three months before bouncing about 65 percent from July to August. Then it began treading water right around the $50,000 mark.   Bitcoin […]

We are in unique times in the markets given the current limitations of where we are in the economic cycle. We are in a situation where there is limited room with traditional monetary policy tools should the economy turn down. As covered in a different article, there are three main equilibriums that markets are always […]

Spread option betting can be an attractive strategy for traders who want to limit their risk relative to having positions in the underlying but also don’t want to pay the often large premiums associated with pure options bets.  Owning or shorting the underlying is a linear bet – it doesn’t protect you from the large […]

Tapering is the process of a central bank reducing its ownership of financial assets. It is sometimes called quantitative tightening (QT) or “rolling off its balance sheet”.  First, we’ll start with an overview of the circumstances behind tapering’s role in economic management (monetary policy).  Then we’ll move into the big picture forces of what major […]

Options are more advanced instruments that can help you improve your portfolio’s risk/reward when employed well. In this article, we’ll cover a specific long-short strategy for options trading to help improve your reward relative to your risk. It uses a combination of both options spreads and a covered call or put position in the underlying.    […]

What is the difference between price and value? The price of anything is the money and credit spent on it divided by the quantity. While the value of something is often taken to just be the price as represented by a certain unit of accounting (dollars, euros, yen, pounds, etc.), they are different.  Fundamentals of […]

The PBOC, ECB, Federal Reserve, and Riksbank all are looking to develop central bank digital currencies (CBDC). In this article, we’ll cover the status of each, the uses, and the implications. CBDC is one of the most important topics in the currency markets at the moment. It has implications not just economically and technologically, but […]