Second quarter earnings season is well underway with Big Tech stocks leading the charge as investors look to see any signals that could change the market trajectory. The Federal Reserve has announced that interest rates will stay the same for now, but a cut in September is looking more likely.
Well, I want to get to our phrase of the day here because it kind of ties into what the fed is doing and that is reinvestment risk and I'll tie it all together.Reinvestment risk is a possibility that the income from an investment like bond interest will have to be reinvested at a lower rate than the original investment.This means you might earn less on new investments if rates go down.
So the writings on the wall and that's important to differentiate because if the, if the recession is already here, they're cutting 100 basis points. Um I think this kind of gets back to Wall Street versus Main Street and I'm with you, Brian, that I, I look at the economic data every day. So if you can do that in a virtuous way which the Federal Reserve is trying to accomplish, then it's, um, you know, it does not have to be a disaster for the economy.And, and so inflation is in the comfort zone and now, um the economy is slowing just what they wanted.And when you think about how Americans, how investors should perceive these tech earnings and you know, translate into their own portfolio.
And you know, in essence, there's two components of economic activity, there's labor force growth and there's how productive the labor force is.We've all most countries around the world.And so what you need is the productivity gains and for people waiting for cyclicals or value, things like energy financials, different parts of the market to rise to the fore, you likely need a new, higher sustainable level of growth.
And as a result of that contemplate what market leadership should be, nobody has ever once said to me also include who the president of the United States is going to be. Do you think it's better for people picking stocks or is it better for those who are dollar cost averaging their 401 Ks with plain vanilla S and P 500 funds?Uh when you, when you approach your own investments or just talk to clients.
So that's why I mean even coming out of the global financial crisis, slow growth, any time, it looked like things would re accelerate during the 20 tens, we kind of stubbed our toe with European debt crises and trade wars and pandemic. How does an investor take into consideration that, you know, individual companies investing in, say a Chipotle or mcdonald's based on how they're doing versus say, hey, maybe I should go into a mutual fund or an ETF et cetera.
Now, you know, if you have a particular level of expertise or you feel strongly about that, um certain companies, you know, certain consumer businesses or, you know, my, you know, a daughter could walk into Costco and be like, I love this place.
And so, you know, in my job, I study history in my job, I write about history and, and I, you know, I get to do, you know, things that hopefully are entertaining. Yeah, I don't know how to exactly describe it, but it's of significant interest to me and definitely shapes you as a person.Uh, believe it or not, 24 minutes has passed since we began and as we wind things down, just want to thank you again, Brian for stopping by here along with Brooke.OpenMP ARB Releases Public Comment Draft of OpenMP 6.0
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