Economics is a social science. Unlike researchers in the natural sciences, economists generally do not have the luxury of conducting controlled experiments. Instead research is based on data observed in actual markets as it is generated. Among the challenges this poses is the ability to distinguish meaningful outcomes from those that occur simply due to […]

The area shaded light green in the chart below traces the hypothetical fate of a dollar invested in the S&P 500 between January 2008 and June 2011. This period spans the stock market’s historic collapse, precipitated by the subprime mortgage crisis, and its subsequent rebound. A disciplined “all equity” investor would not have lost any

Capital markets are reflecting bad news throughout the global economy. In the U.S. aggressive monetary and fiscal policy has served to stimulate fears of inflation and growth of the national debt, but little else. European policymakers face a debt crisis that threatens the viability of the European Union, and now growth in China appears to

Those of us who attended economics classes dutifully recorded in our notebooks that the returns on obligations of the U.S. Treasury were the “proxy for the risk-free rate of return.” They provide a foundation to which “risk premiums” could be added in order to approximate higher expected rates of return for the universe of inherently

AIER recently published research regarding silver as a potential component of an investment portfolio. Silver was found to have several desirable attributes, but the evidence does not support its inclusion among our recommended asset classes at this time. The emergence of exchange traded funds could have a profound impact on the silver market. We will

U.S. Treasury securities have long been regarded as the best proxy for a theoretical risk-free asset. Their payments are backed by Congress’s unique power to tax an economy that accounts for a quarter of the world’s entire economic output. But this risk-free reputation is now in question; as U.S. gross debt approaches 98 percent of

Patient investors were amply rewarded in 2010, but it was a rough ride (see our chart on page 6). Investors who adhered to the principles below would have avoided impetuous decisions that so often spell disaster for individual investors. • I will understand my own circumstances and formulate an investment plan based on my needs,

As of this writing, Congress and the President were still wrangling over how to avoid the “fiscal cliff” that will bring dramatic tax increases and spending reductions if no action is taken. While we avoid conjecture when it comes to pending tax policy, we can offer guidance, including prudent measures investors can take now, regardless

The Federal Reserve has doubled down and in so doing has forced investors to follow suit. To keep interest rates low, the central bank announced plans to buy as much as $85 billion of mortgage-backed securities per month through year-end and expressed willingness to keep rates low through mid-2015. This leaves savers with slim chances

This month we continue our series on income in retirement. In the following pages we assess reverse mortgages and preferred stocks, and we will assess other sources of income coming months. However, readers should keep in mind that ideally their savings will constitute their primary source of cash flow. Spending from savings, however, requires discipline.