Why Stocks Are Crashing And What You Need To Know
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After setting record after record, stocks are taking a hit. This episode of What’s Ahead explains why.
The villains are obvious. The most immediate trigger for the slide is inflation. The Federal Reserve says the surge in the cost of living is transitory, but our central bank will be fueling these fires if it prints money to finance the Democrats’ spending binge.
Also weighing on stocks is the possibility of economy-killing tax increases.
Another dark cloud is the increasingly dicey situation for national security, as evidenced by the escalating Iran-incited conflict between Israel and Hamas and the cyber attack on our largest pipeline, which couldn’t have happened without Moscow’s acquiescence.
Surprising U.S. Jobs Report: An Economic Warning Sign?
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A million or more new jobs that’s what experts confidently estimated for the April jobs report. Instead, the number came in at only 25% of that expectation. Never before in the history of these surveys has there been a miss of that magnitude.
After all, there are currently almost 8 million job openings.
This segment of What’s Ahead lays out why we should be worried.
Contrary to the Biden administration’s spin that this disappointment is the result of Covid-created structural impediments, the barriers to a good report are government-created. The biggest is Uncle Sam’s paying bonus unemployment benefits. Millions of people are making more by not working than by returning to the labor force.
How Janet Yellen Could Help Fight Inflation With 100-Year Bonds
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If Congress actually passes President Biden’s blowout spending bills, we’re in for a devastating breakout of inflation. There’s an effective way to ease the pain.
But as this episode of What’s Ahead notes with astonishment, Janet Yellen refuses to do it: Sell bonds with a duration of 50 years or 100 years with a coupon of 3%.
That yield seems generous only in today’s world of extremely low interest rates. But as inflation heats up, it will look low.
So it would make sense to lock in low long-term rates.
Bull Markets Don t Last Forever: How Should You Invest?
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This segment of What’s Ahead tackles the question of what sensible investors should do now.
Stocks keep breaking records, but bull markets don’t go on forever. Trying to time the market going all in or selling everything is a fool’s game. It never works for long.
Equities that investors should have plenty of are those that both pay dividends and have a long-term record of boosting their dividends each year. Even though such stocks won’t escaping a shellacking in a bear market, they will most likely pay you dividends and even raise them.
Bond Market Crash? Why Individual Investors Should Stay Out Of Bonds
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This episode of What’s Ahead describes why investors shouldn’t buy bonds. The great bull market in bonds that began in 1982 is over. If you have bonds in your portfolio, make sure their maturities are no longer than three years.
Although interest rates have come up a tad in recent months, they are still at levels not seen before in recorded history.
Rates will be rising as the economy recovers from the pandemic and as the Federal Reserve starts printing money in earnest to help pay for Joe Biden’s spending binge.