David Dunham once said, “Efficiency is intelligent laziness.” Have you ever reached the last bite of food on your plate and really savored it? Did you wish you had done the same with all the other bites? At that point, you might realize that it was your other tasks (television, filing your taxes, or chatting on the phone) that distracted you from realizing how great a meal your wife had cooked.
Have you ever heard anyone mention the yield curve and wondered what on earth they were talking about? It’s really not as complicated as it sounds. More importantly, you can make better financial and investment decisions if you have a basic grasp of what the yield curve is and what it might be telling us. There are 3 main things you need to know about the yield curve:
1. What Is It?
Ralph Seger once said, “One way to end up with $1 million is to start with $2 million and use technical analysis.” I find this quote amusing. A lot of people feel very strongly that technical analysis is about as useful as voodoo for helping you figure out the best investments for your money. I happen to disagree, but before I tell you why, let’s take a look at some of the differences between fundamental and technical analysis of investments.
There’s an interesting poem by Robert Fulghum from a book called All I Really Need to Know I Learned in Kindergarten. I first came across it while I was training to be a teacher. Working in a number of kindergarten classrooms made me realize that there was a lot of truth in the poem, but I didn’t fully appreciate its message until I had children of my own.
With the economy having thrown many of us for a loop over the past couple of years, there is more demand than ever for quality, unbiased financial information. People have a lot of questions about personal finance, investing, and basic economics.
Some of them are very simple: How can I save more money? How much debt is too much? Should I save for retirement or pay down debt? Some are more sophisticated: What’s the safest place for my money right now? Is it realistic to expect the stock market to deliver average annual returns of 7% or better over the next 10 years? How will economic trends and central bank policy affect my job, my investments, and my life?