Month: March 2015

Cable TV cord cutting has reached its tipping point

I'm calling it right now. 2015 is the year that cable TV cord cutting finally reached its tipping point. For so many years, consumers have been complaining about the rising costs of cable TV and the terrible customer service from cable providers. However the options for cutting the cord were few and far between. But just in the last few months, the options have leapt forward with HBO Now, Sling TV, Sony's PlayStation Vue, CBS All Access, Starz Play, Cinemax MAX Go and Encore Play offering viable alternatives to cable TV; and rumors are that Apple will launch their own streaming subscription service by mid-year. Combined with Netflix, Amazon Prime and Hulu, the options for cord cutters are getting better by the day.

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Will the Fed raise rates in 2015? Don’t count on it

Yesterday, the Federal Reserve removed its “”patient”” language, as expected, but Fed Chair Janet Yellen delivered her best quote yet:

Just because we removed the word ‘patient' from the statement, doesn't mean we're going to be impatient.

With many investors still expecting a first rate increase in 2015 (perhaps in September), you shouldn't count on it. Why? It's actually quite simple. Yellen repeatedly tells the market that the Fed's decision is data dependent on whether it will raise rates or not. So if you look at the data, there is nothing in the data telling us that a rate increase will come in 2015 at all. Let's look at the numbers.

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Building an Investment Portfolio That Sparks Joy

This week, I continue from where I left off in The Life-Changing Magic of Tidying Up… Your Investment Portfolio. What I like about the KonMari method is its simplicity. Keep the things that spark joy and dispose of the rest. There is also a specific order to the decluttering madness: clothes, books, papers, komono (miscellaneous), and finally mementos. Basically, you start with the low hanging fruit. I quickly reduced my collection of 100 t-shirts that no grown man needs. The idea is to work through each category, carefully honing your skills so that you're ultimately prepared to sort through your toughest opponent, keepsakes and sentimental belongings. Why stop there? I suggest that you keep going.

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How low can you go? Bond yields are going negative!

Negative interest rates are a fascinating topic for professional economists as well as the investing public. Using conventional wisdom, one would think that interest rates earned on investments are never less than zero because investors could just stuff their money under their mattresses for free.

Why would anyone want to pay for the privilege of owing a government bond? Generally nominal rates are positive but negative rates come at times of extreme fear, uncertainty and turmoil, with investors fleeing risk assets to perceived safer assets. We saw this in 2008 when Treasury bill auctions tipped into negative yields. The Treasury market saw this again several times in the weak recovery and as recently as September 2014 with T-bills dropping slightly into the red.

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