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Matt's Market Insights

March, 2016 Archives

The Fed's Next Move

By Matthew Kerkhoff

 

When it comes to anticipating Federal Reserve policy, there’s no better place to turn than former Fed Chair Ben Bernanke. No longer bound by office, Mr. Bernanke is now free to write about monetary policy as an outsider.

 

In a recent two-part post, the former Fed Chair took some time to explain what tools the Fed has left, and where they might turn in the case of another economic downturn. Why is this important? Because many believe the Fed’s hands are now tied as a result of short-term rates being near zero, and the Fed’s balance sheet sitting at over $4 trillion.

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Fed Hangover is Gone

By Matthew Kerkhoff

 

Five consecutive weeks of gains makes it hard to argue that we’re in a bear market. While it may not seem like much has changed since the markets last swooned, a few key developments remain supportive of stock prices.

 

In particular, a shifted stance on monetary policy, change in the trajectory of the dollar, and recovery in oil prices have turned sellers into buyers.

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The Path Out of Debt

By Matthew Kerkhoff

 

Contrary to popular belief, the best way to get out of debt these days is to borrow more money. Don’t believe me? Just look at Japan.

 

Like most of you, I was raised to be especially wary of debt and the tremendous drag it can become on achieving financial prosperity. As a nation we know intuitively that our debt levels have ballooned out of proportion, but that doesn’t seem to stop us from continually borrowing more.

 

Is it possible that we have it all wrong, and that going deeper into debt is the solution to our debt problems?

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The Taxonomy of a Bear

By Matthew Kerkhoff

 

Bear markets are rather arbitrarily defined as a decline of 20% or more from recent highs. Some will go further in their definition, including subjective aspects such as widespread fear and pessimism. But at the end of the day, a bear market is just a collapse in asset prices. Something we’d all like to avoid if possible.

 

Bear markets have a sharply negative connotation, but if viewed under a different light, they become the catalysts for generating significant wealth. Seeing bear markets in a positive light is the first step in learning to harness them.

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