A Necessary Evil in the Stock Market
A Wealth of Common Sense
by Ben Carlson
4h ago
In the early-1980s, Robert Shiller set out to answer the question: Do stock prices move too much to be justified by subsequent changes in dividends? The idea was to figure out how well the stock market tracks the present value of future cash flows in the short-term. Shiller concluded that, no, stock prices do not neatly track fundamentals. He updated that data in his book Irrational Exuberance: The cash flows move very l ..read more
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Rich People Who Don’t Feel Rich
A Wealth of Common Sense
by Ben Carlson
2d ago
How much money do you have to make to feel rich? It’s a subjective question. A lot depends on your lifestyle, where you live, how much you spend and save, your peer group, and your vulnerability to comparison. The comparison piece matters more than most are willing to admit. Wealth is relative. JP Morgan once said, “Comparison is the thief of joy.” It’s easy to say when you’re one of the weal ..read more
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The Psychology of Inflation
A Wealth of Common Sense
by Ben Carlson
3d ago
A reader asks: I get all the stuff Ben has been saying about inflation — wages have kept pace, economic growth has been higher than the 2010s, wages have risen the most for lower income people, etc. I get all that. My husband and I own a house and own stocks so we’ve benefitted in recent years. Having said all of that, I STILL CAN’T GET OVER HOW HIGH PRICES ARE!!! The grocery store, home/auto insurance ..read more
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Animal Spirits: The Yeah But Bull Market
A Wealth of Common Sense
by sean
4d ago
Today’s Animal Spirits is brought to you by YCharts: See here for YCharts’ quarterly economic update slide deck! See here for tickets to The Compound and Friends LIVE in Los Angeles On today’s show, we discuss: Will the growth of indexing lead to its downfall?  Fund industry’s asset mix offers encouraging sign  CPI Data – motor vehicle insurance  Why car insurance rates are so high  Th ..read more
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Talk Your Book: Diversifying Away From the Magnificent 7
A Wealth of Common Sense
by sean
6d ago
Today’s Talk Your Book is brought to you by Direxion On today’s show, we spoke with Ed Egilinsky, Managing Director, Head of Alternatives, and Head of Sales and Distribution at Direxion to discuss diversifying away from the Magnificent 7. For more information, see here or email info@direxion.com On today’s show, we discuss: Flows into bullish and bearish funds Magnificent 7 concentration risk Nasdaq 10 ..read more
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Who is Buying a House in this Market?
A Wealth of Common Sense
by Ben Carlson
1w ago
According to Redfin, we just hit another new all-time high in the median monthly payment (based on current home prices and mortgage rates): The median payment for a new purchase has doubled since 2021. Mortgage rates were back up to 7.4% this week. Nationwide housing prices are still are all-time highs and up around 50% since the end of 2019. There has been this feeling of something has to give for a while now but nothi ..read more
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Knowledge Alone Doesn’t Change Behavior
A Wealth of Common Sense
by Ben Carlson
1w ago
Wes Gray from Alpha Architect joined me on the show this week to discuss questions about the best places to live for tax purposes, owning T-bills without the high taxes and how to best diversify value stocks. Further Reading: Buy & Hold vs. Fear & Greed The post Knowledge Alone Doesn’t Change Behavior appeared first on A Wealth of Common Sense ..read more
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Animal Spirits: Enjoy the Bull Market While it Lasts
A Wealth of Common Sense
by sean
1w ago
Today’s Animal Spirits is brought to you by Pacer ETFs and Fabric by Gerber Life See here for more information on Pacer ETFs Go to meetfabric.com/spirits for more information on life insurance from Fabric by Gerber Life See here for tickets to The Compound and Friends LIVE in Los Angeles On today’s show, we discuss: S&P 500 trackers hit a record 27% of 2023 equity ETF flows What’s wrong with the ..read more
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Two Things I’m Not Worried About
A Wealth of Common Sense
by Ben Carlson
1w ago
Finance people spend a lot of time worrying. About the next recession. The next bear market. The next Black Swan event. The level of interest rates and inflation and valuations and the Fed and basically everything else. This makes sense. The bad stuff hurts more than the good stuff feels good so risk management rules the day. I’m a finance guy so I worry about plenty of these things too. But there are certain risks ..read more
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How to Lie With Charts
A Wealth of Common Sense
by Ben Carlson
1w ago
A reader sent me the following chart asking for my thoughts: I honestly don’t know who the creator of this chart is. I don’t know the intention of it either but the fact that the title contains the word collapse makes it sound scary. Knowing that housing prices in the U.S. are at all-time highs makes this chart seem suspect, but the data checks out. I looked at Federal Reserve data to for the median new home ..read more
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