The single best move to make money in stocks

Stocks closed out 2019 in stellar fashion. That should be cause for celebration. But there’s one group that has missed out on much of the market’s gains–millennials. Just 49% of millennials in the United States (those ages 23 to 39) held stock at any given time in the last two years. Because a much larger percentage of Americans in the same age range held stocks before the Great Recession, observers say that stock performance in 2008 is the main reason that many millennials steer clear of equities. Who can blame them for being a little gun shy? In 2008, the S&P 500 plunged more than 38%. But holding on to that kind of trauma can be dangerous. The turmoil that shaped the economy during millennials’ formative years has kept them away from recent market successes. The timing of the Great Recession meant that a group of millennials started their careers in a tough job market, and those who found jobs faced wage stagnation in the early years of their careers, making it less likely that they would have extra money to save and invest and therefore harder for them to accumulate wealth. According to a report by the Federal Reserve

January 7, 2020 No Comments

Are you a risk taker? If you invest, the answer is yes.

For each individual, the word “risk” evokes a different image or experience. A person’s perception of risk can be shaped by past experiences, recent stories in the media, the latest investment-related study, and incidents recounted by friends and associates. Too often, it’s these factors and not actual probabilities that shape an individual’s expectations for the future. “Recency” is the tendency to place more weight or significance on recent and current events than on past events. From a recency perspective, when the market is going up, investors project that it’s going to keep going up, and therefore invest more money. When the market is declining, investors don’t invest — or they sell — because they project that the market is going to keep declining. In the excitement of sustained bull markets, such as the exceptionally strong bull market of the late 1990s, investors become overly optimistic and underestimate or ignore risk altogether. Ironically, at times like those, many investors view the level of risk as being very low. Actually, it’s the opposite. It’s only when things go badly that investors realize they should be thinking about risk. Sometimes, they discover they are not as willing to take on as much risk

February 12, 2019 No Comments

Is it time for a reckoning in stocks?

Is it time for stocks to sell off? In light of the 10th anniversary of the collapse of Lehman Brothers last month, we should remember that it’s a mistake to be complacent about what could happen in markets. Extreme economic and financial events are far more likely to occur than we like to believe. But the real lesson of Lehman is not so much that very bad things can occur — it’s that anything might. Investors should be mindful of the risk of further crises, but they should also keep in mind the possibility that things might turn out just fine. This is hard to do. It’s far easier to think of ways that things might soon go wrong. The U.S. stock market is the most expensive stock market in the world currently, according to renowned Yale economist Robert Schiller. The economy has enjoyed a long expansion — maybe too long. The S&P 500 hit its market bottom in March 2009, and since those lows, it has rallied 334 percent in the longest stretch on record since World War II without dipping into a bear market. Perhaps the Federal Reserve will tip it into recession. The trouble in emerging markets

October 8, 2018 No Comments

Fatima Iqbal: Reflecting on 10 years with Azzad

Ten years ago, Fatima Iqbal joined Azzad as a financial advisor and the company’s first CERTIFIED FINANCIAL PLANNER™. She joined while the Global Financial Crisis was unfolding, just a few weeks before Lehman Brothers declared bankruptcy and a couple of months before President Bush signed into law the Emergency Economic Stabilization Act of 2008, which included the $700 billion asset purchase program to bail out financial institutions. Markets bottomed out on March 6, 2009, but immediately began to bounce back, beginning the historically long bull market that we’re enjoying today. In 2010, the economy started adding jobs on a consistent basis. In fact, the U.S. hasn’t had a single month of job losses since October 2010 — the longest stretch of job gains on record, according to the Bureau of Labor Statistics. As we look back on the last 10 years, we asked Fatima to share her reflections on how Azzad responded to the financial crisis and how the company developed new products to meet the needs of American Muslim investors. I joined Azzad at the end of July 2008. At that time, the markets were volatile and investors were on edge. Some may think it was the worst time

September 10, 2018 No Comments

How the Fed impacts your portfolio

Since September of last year, the Federal Reserve has been buying $85 billion in bonds every month, aiming to lower long-term interest rates and boost economic growth. Overall, the U.S. central bank has bought more than $2 trillion of government bonds, private debts, agency housing debts and other bond instruments dating back to the Financial Crisis. It has paid for these purchases by crediting funds to the reserves of private banks, which is commonly referred to as “money printing.” Liquidity trap The Fed began printing money because, in its view, the crisis plunged the country into a “liquidity trap,” a situation in which many people hoard cash due to uncertainty and the lack of good options for a decent return. America spent most of the 1930s in a liquidity trap; Japan has been in one since the mid-1990s; and the Fed is operating as if the U.S. is in one now. Economists who study liquidity traps, including Fed Chairman Ben Bernanke, argue that some of the usual rules of economics don’t apply as long as the trap lasts. Budget deficits, for example, do not drive up interest rates in a liquidity trap, and printing money does not have the same inflationary

June 11, 2013 No Comments