Finance Friday #5: Risk

Just because the economy is good doesn’t mean you should act like it. If you load up on debt to buy stuff, you are taking a huge risk. Debt is the spending of future earnings plus interest. What if those future earnings don’t happen?

Quote of the Day

"People no longer are responsible for what happens in the market, because computers make all the decisions.” –Michael Lewis, Flash Boys

Chart of the Day

The economy is great and gasoline prices have been cheap (until the last few months), so Americans have forgotten how difficult it was to drive an SUV during the recession:

Autos v. Trucks

Tweet of the Day

Investment of the Week

The Schwab US Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index. Its top holdings include Exxon Mobil, Intel, Home Depot, Pfizer, Verizon, Procter & Gamble, Walmart, IBM, Pepsi, and Union Pacific. While many dividend funds are trading around 20x earnings, SCHD’s P/E is 15.62. The fund’s expense ratio is only 0.07%. Morningstar gives is a 4-star rating.

Read

Goldman warns machines will ugly up next selloff—but here’s your silver lining
Barbara Killmeyer, Market Watch, 05.23.2018

Qualcomm’s $10 Billion Stock Buyback Looks Smart
Ashraf Eassa, The Motel Fool, 05.22.2018

Why Caterpillar can’t keep up with a boom in demand
Timothy Aeppel & Rajesh Kumar Singh, Reuters, 05.23.2018

‘Everything’ in Argentina is 20% to 30% overvalued and a crisis is on the way
Michael Selby-Green, Business Insider, 05.10.2018

European Stocks: More Expensive Than You Think
Daniel Lacalle, Seeking Alpha, 05.22.2018

Keep calm and carry on in Emerging Markets
Richard Turnill, Blackrock Blog, 05.22.2018

Listen

The Best Program to Get Out of Debt
The Dave Ramsey Show, 05.22.2018

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