December 20, 2016
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Fed Raises Rates

Late December of 2016 was mixed for the markets, as the Dow increased by 0.44%, while the S&P 500 lost 0.06%, the NASDAQ dropped 0.13%, and the MSCI EAFE gave back 0.55%. We also saw a variety of data released, giving a similarly mixed view of recent economic activity. Retail sales and the Consumer Price Index showed modest gains, while industrial production and housing starts both declined. The biggest headline from last week, however, was a development the market anticipated for quite some time: The Federal Reserve decided to raise its benchmark interest rates – for only the second time since 2006. Why did the Fed raise rates? The Federal Open Market Committee (FOMC), the group of Fed officials who meet to determine interest rates and other policies choices, has a mandate to “foster maximum employment and price stability.” In its quest to uphold this mandate, the FOMC aims to […]
September 13, 2016

Stocks Drop on Interest Rate Worries

Stocks Drop on Interest Rate Worries (WEEKLY UPDATE – SEPTEMBER 12, 2016) Stocks Drop on Interest Rate Worries, After trading flat for most of the week, stocks broadly sank Friday on fears of a future rate hike. For the week, the S&P 500 lost 2.39%, the Dow fell 2.20%, the NASDAQ dropped 2.36%, and the MSCI EAFE lost 0.16%.[1] Monetary policy was at the forefront of investors’ minds last week as they continue to calculate the odds of an interest rate increase ahead of the September Federal Reserve’s Open Market Committee (FOMC) meeting. The European Central Bank (ECB) declined to increase its stimulus program, voting to stand pat on interest rates and current bond-buying activity. The decision wasn’t a total surprise as the Eurozone economy has proved resilient after Britain voted to exit the EU. However, the ECB did confirm that it will consider further quantitative easing in 2017 if […]
July 6, 2016

Stocks End Q2 With a Bang – Financially Simple

Stocks End Q2 With a Bang QUARTERLY UPDATE – JULY 5, 2016 After the previous week’s post-Brexit selloff, stocks closed out last week with one of the best performances of 2016 as investors bought the dip. In the first half of the year, the S&P 500 was up 2.69%, the Dow was up 2.90%, the NASDAQ was down 3.29%, and the MSCI EAFE was down 6.28%. All these numbers are as of the quarter’s end on June 30.[1] What lesson can we draw from recent market gyrations? Markets respond unpredictably to shocks, and periods of strong performance often follow close on the heels of frightening sell-offs. While the media loves to predict gloom and doom at every opportunity, smart investors know to stay calm, look at underlying fundamentals, and stay away from emotional decisions. While we can hope for smooth sailing in the weeks ahead, we should expect continued volatility. […]
May 11, 2016
April Jobs Report Shows Slower Pace of Growth

April Jobs Report Shows Slower Pace of Growth

April Jobs Report Shows Slower Pace of Growth WEEKLY UPDATE – MAY 9, 2016 April Jobs Report Markets slumped for the third week as global concerns pressured investors again, and domestic data painted a modest picture. For the week, the S&P 500 lost 0.40%, the Dow fell 0.19%, the NASDAQ dropped 0.82%, and the MSCI EAFE fell 3.19%.[1] April’s job report showed investors that the labor market continues to improve, adding 160,000 jobs last month. However, the gains were far below the consensus estimate of 200,000 new jobs. Though the unemployment rate remained unchanged at 5.0%, one estimate of the underemployment rate-measuring discouraged workers and part-timers who want full-time work-fell to 9.7% from 9.8% in March. That’s good news, because it means that workers who have struggled in the recovery may finally be catching up.[2]   However, it’s not all good news. A separate private industry report found that job […]