In the short term, many factors can influence the direction of stock prices. We discussed central planners impacting the markets just last week. However over the long term, it's earnings that drive stock prices higher or lower. This is a simple concept to understand. If a company loses money year after year, it will struggle to stay in business. Not many people will choose to invest in a losing operation so the stock price will go down. On the other hand, if a company delivers consistent high levels of growth, it will attract many investors driving the stock price higher. This concept can also be applied to the broad market indices like the S&P 500. Therefore it makes sense to look at S&P 500 earnings estimates.
Academy Award Winning Investment Advice
Ever since listening to the intensely popular Serial podcast, I have continued to be hungry for informative, entertaining, audio content that is on-demand whenever I want it. Without boundaries to my curiosity, I've been enjoying everything from Planet Money to This American Life to The Advanced Selling Podcast to Sodajerker to The Nerdist. Better 10 years late to the podcasting bandwagon than never!
Does My Financial Advisor Need To Be Local To My Area?
With visitors to this website/blog representing all 50 US states and 145 countries over the last 12-months, this is a question that we hear quite often. There is no doubt that the world is shrinking and the way that we consume products and services is changing.
Case in point, without leaving my desk in New Jersey, I recently worked with a mortgage broker in Minnesota, printed brochures in Tennessee, and bought a ski helmet from Utah. Thomas L. Friedman, author of The World Is Flat, writes, “”The simple definition of globalisation is the interweaving of markets, technology, information systems, and telecommunications networks in a way that is shrinking the world from a size medium to a size small.”” Financial advisors do not operate in a vacuum so it only makes sense that the way clients are selecting and working with their financial advisors is also changing.
Top 10 Blog Posts of 2014
If you do not have time to read everything that we publish, at least read these 10. “Best” is rarely the same as “popular,” but here we let the market decide. According to our readers, these are the best Runnymede blog posts of 2014:
Show Me the Money: Where did the Fed’s QE money go?
Most people believe that when the stock market is going up, the economy must be doing well. The argument was generally true in the 20th century. Now a days, things are different in the era of the New Normal. So far in the 21st century, when both the bond and stock markets are cheering, the economy may actually be slowing or operating below trend.
What does Irving Fisher’s Equation of Exchange tell us about 2015?
Irving Fisher, who was one of the well-known economists of the early 1900’s, came up with the “Equation of Exchange” concept. In its time, it became a landmark theory and today, many people still consider the equation to be one of the most important theories of economics.
That equation was MV=PT to explain the key relationships as to how these variables interact with each other and the economy. M is the money supply. V is the velocity of money. Essentially this says how quickly the money supply is turned over. P is the price level. T is the aggregate transactions. So MV = PT means that the total transactions at the current price level is equal to the total money stock multiplied by how often it is turned over.