Archive - November 9, 2010

1
What Does the Federal Reserve Not Understand?
2
What’s Driving This Stock Market Rally?
3
What Investors Should Do Now With the Pending Capital Gains Tax Increase

What Does the Federal Reserve Not Understand?

It is really hard to resist taking potshots at the Federal Reserve; they present such a large, slow-moving target. Everyone from the German Finance Minister to various commentators and money managers are making fun of Bernanke, who responds with a daily attempt to explain himself in op-ed pieces or speeches.

One of the less obvious consequences of the Fed’s policy to keep short-term interest rates at zero is the possibility for virtually risk free profits for banks (i.e. another bank bailout). Banks can borrow from the Federal Reserve essentially for free. The Fed hopes that banks will then lend out …

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What’s Driving This Stock Market Rally?

What a great couple of weeks it has been in the stock markets! We just had the mid-term elections, an important Federal Reserve Meeting and the October 2010 monthly jobs report.  Most were expecting this past week to be one where the markets took a breather and pulled back a bit. Instead, the markets powered higher to levels not seen since 2008 and better than our April 2010 highs.  The NASDAQ market is up by double digits for the year and the DJIA and S&P500 indexes are near double digits.  With the announced quantitative easing (QE2) by the Federal Reserve …

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What Investors Should Do Now With the Pending Capital Gains Tax Increase

In case you didn’t realize it, in 2011 there is an impending increase in capital gains tax to 20% – presently it’s 15% (or 0% if you’re in the 10% or 15% brackets). It might make a great deal of sense to take your gains now… that is, unless the capital gains rate is extended with tax legislation before the end of the year.

If you happen to hold positions in mutual funds or stocks that will result in capital gains if sold, you might be able to avoid a significant amount of tax if you sell your position (or …

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