30 Week Investing Challenge for your HSA
Jan 03, 2023 7:28 am
Hi there,
Here's my weekly update for January 2nd, 2023 for Pre-Baby Investing with your HSA
This is the 1st of 30 investment specific topics to help you grow your HSA into Health Savings Nest Egg.
🗒️ Yield Curve Control Blues
The Bank of Japan surprised people with a change to its yield curve control (YCC) policy.
This has caused a mild sell-off in Japanese bonds, with the 10-year Japanese Government Bond (JGB) yield up 15 basis points on the month when I last checked.Although I think some of the usual suspects have tried to get excited about this — a harbinger of doom to Japan and/or the global fixed income complex!
— this is still in nothingburger territory.
(Note: people who discuss bond yield changes as a percentage of previous yields — e.
g.
, “bond yields rose by 100%!
” when the yields go to 0.2% from 0.1% — are innumerate clowns and are safe to ignore.
) Nevertheless, if the yield cap was raised by a lot more, there would be a lot of wailing and gnashing of teeth.One standard dodge of a forecaster is to say that this might be important for global bonds.
This makes one sound like a very serious forecaster with an eye on those darned black swans.
However, any number of things can cause global bond yields to rise.
If you want to be a yield forecaster (I don’t!
), at some point you have to put your money where your mouth is and either recommend long/short positions and/or option strategies (if you want to position for tail risks)....
🗒️ Lagging Economic Indicator Still Lagging
My feeling is that although it is too early to declare victory over high inflation rates, I think we are closing in on closer to “normal” dynamics — by the standards of the post-1990 era.
I believe that there are still areas of stronger pricing power, but some of the excesses have been unwound, so that we end up with more mediocre inflation prints.
At least we would if the housing component of CPI — constructed to be a very slow-moving series — settles down.
The market rent series that I have seen (but I do not have access to) suggest that it will settle down, but that will be a mid-2023 story.The chart above shows the 6-month annualised rate-of-change of the “commodities” (goods) component of the U.
S.
CPI....
🗒️ Banks, Securities Markets, And Risk
Large bank corporations now tend to have both traditional lending divisions as well as securities market divisions.
This was not always the case; regulators used to keep financial firms locked to specialisations — this was referred to as “the pillar system” in Canada.
However, ongoing deregulation eroded the pillars — I discuss part of the economic logic below.
It is possible to find banks that stick to a traditional loan/deposit structure (particularly in the United States, with a highly fragmented banking system), but those banks tend to be smaller.Editorial note: This is possibly the last of my series of articles on the theme “how do banks work?
” These articles would end up as a chapter in my banking primer.
The “elevator pitch” for my book is that I want to pour cold water on loopy fractional reserve banking stories — which requires some discussion of how banks operate in the real world....
🗒️ Is The US Economy Already In A Recession?
🗒️ Form 1099-B: What to Know for 2023
Tax season is right around the corner which means you should start receiving important documents – like your W2 – in the coming weeks.
If you bought and sold stocks or other assets throughout the year you can also expect to receive a from your brokerage firm, such as a 1099-B.
This article will cover …
The post Form 1099-B: What to Know for 2023 appeared first on Investor Junkie.
🗒️ QQQ vs. VOO: Which Is The Better ETF?
ETFs offer diversity and some sense of stability since you don’t have to worry about tracking the stock market daily.
Two of the best ETFs available are QQQ and VOO.
Both of these follow a different index, and they allow you to invest in some of the largest companies on the market.
Both QQQ and …
The post QQQ vs.
VOO: Which Is The Better ETF?
Enjoy,
frank
