The Retired Investor: Gold as a Safe HavenBy Bill Schmick,
05:55PM / Thursday, March 23, 2023 | |
This week, gold briefly climbed above $2,000 per ounce. The precious metal is commonly thought of as an inflation hedge, but also serves a different function in times of financial stress. Gold can be a safety trade.
Gold is a highly speculative asset in the best of times. But, unlike bonds and stocks, it has one redeeming factor in times of economic slowdown, financial instability, and geopolitical tension. It does not carry the risk of an issuing entity collapsing, such as a bank or a government. There have been many examples of this throughout history.
The latest example was back in February 2022, during Russia's invasion of Ukraine. Gold spiked to 0 Comments
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The Retired Investor: U.S. Treasuries Not Risk FreeBy Bill Schmick,
04:11PM / Thursday, March 16, 2023 | |
The recent calamity in the banking sector is complicated, but one issue stands out. Even the safest of investments have risk.
Understanding the relationship between bond prices and interest rates is extremely important. Bonds, overall, are considered safer investments than stocks and history indicates that bonds have been less volatile than stocks most of the time. However, when interest rates rise, bonds can get hurt for a variety of reasons, and credit risk is at the top of the list.
Credit risk refers to the possibility that a corporation (or a government entity) could default on a bond they have issued. That happens when the issuer fails to pay back the 0 Comments
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The Retired Investor: Pet Clothing a Billion-Dollar BusinessBy Bill Schmick,
04:06PM / Thursday, March 09, 2023 | |
Coats to protect your pets from severe weather, or orange safety vests during hunting season are fairly common but today, the fashion industry has embraced the concept and taken pet clothing to new heights.
Canine couture is a big business. The pet clothing business market is growing by 4.5-5 percent per year, and by 2030 should exceed $9.15 billion annually, according to Brainy Insights, a research firm that tracks sales in the pet industry. The U.S. accounts for 30 percent of global sales and hit almost $2 billion in 2022.
I divide the pet clothing market into two segments: clothes that are practical, and clothes that are indulgent. Practical items have a 0 Comments
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The Retired Investor: U.S. Treasuries Beginning to Look Attractive.By Bill Schmick,
04:40PM / Thursday, February 23, 2023 | |
It may not be the 1970s when interest rates offered investors double-digit returns, but 5 percent on a six-month U.S. Treasury bill isn't bad.
We last saw that kind of return in 2007. To be sure, the rate still comes up short when compared to the 6.4 percent annual rate of inflation right now. Yet inflation is declining and has fallen for seven months in a row.
The dilemma investors faced last year was that there simply was no haven to park their cash. The stock market was treacherous and falling. The Federal Reserve Bank was hiking interest rates on an almost monthly basis to combat inflation, and most bond prices were falling almost as much as 1 CommentRead More >> |
The Retired Investor: The Debt Ceiling DramaBy Bill Schmick,
04:39PM / Thursday, February 16, 2023 | |
In a few months, be prepared for politicians of both parties to turn up the heat as the June debt ceiling deadline approaches. Normally, the stock market responds with increased volatility. The question is should investors pay attention at all?
That may sound like heresy given that we are talking about the full faith and credit of the United States of America. If the government defaults on its debt, the global repercussions of such an event would be momentous. Currencies would plummet, stocks would crash, and interest rates would soar. Armageddon would reign, or at least that's what is predicted to happen, but no one knows for sure because the U.S. has never defaulted 0 Comments
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