Category: Investing


Trusting Consumer Price Index Inflation Numbers

Forum user Sophie was asking about a Consumer Reports article questioning the accuracy of the Consumer Price Index (CPI) for reporting inflation. The question boils down to: Does the CPI underestimate inflation? Yes, it probably does.  The CPI underestimates inflation for a very simple reason: It’s a government agency run by a political appointee that may be trying to make his/her boss look good. You don’t make your boss look good by reporting higher than actual inflation numbers, comrade. The CPI...

Donald Trump, Immigration, and Divesting from America

I normally don’t discuss U.S. presidential campaigns, but at this point I’m for Donald Trump for the simple reason that he is talking like he will get the immigration system under control: Donald Trump Immigration Reform Plan The preamble I could have written myself: Real immigration reform puts the needs of working people first – not wealthy globetrotting donors. We are the only country in the world whose immigration system puts the needs of other nations ahead of our own. That...

Market Volatility and Stop Losses

The market volatility we are seeing makes this a good time to re-post why I don’t recommend using stop losses: Stop Losses and the Permanent Portfolio The best way to deal with portfolio volatility is to have widely diversified assets (e.g. stocks, bonds, cash and gold). The other thing to do is ignore the market news and not get tempted to go in and start messing with things. At least, that’s what I’m doing and it has always worked for me.