Latest news with #GreatFinancialCrisis
Globe and Mail
12 hours ago
- Business
- Globe and Mail
Investing Myth: Timing the Market. Here's Why Patience Beats Prediction.
Key Points The S&P 500 has returned an annual average of 9%, but short-term periods can be much more volatile. Warren Buffett has called timing the market a waste of time. Timing the market consistently is virtually impossible. 10 stocks we like better than S&P 500 Index › Many investors probably look at a stock chart and envision buying at the bottom and selling at the top. For example, you might imagine investing in the S&P 500 (SNPINDEX: ^GSPC) on March 9, 2009, when it bottomed out during the Great Recession, or when it hit its low after a plunge early in the coronavirus pandemic, on March 23, 2020. If you're looking at an individual stock chart, the opportunity can become even more mouthwatering. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » However, in reality, investing isn't like this. You don't know where a stock will go in the future, and no one knows when a stock is hitting a bottom or a top. Trying to buy a stock at the bottom or sell at the top is known as "timing the market," and it's impossible to do consistently. Warren Buffett, the Berkshire Hathaway founder and CEO, has said that trying to time the market is a waste of effort and that the stock market is a device for transferring money from the impatient to the patient. Why patience wins in the stock market The S&P 500 has an incredible track record of generating wealth, but you can only overcome the volatility inherent in the stock market by investing over the long term. Historically, the S&P 500 generates an average annual return of 9%, but over a shorter period of time, stocks can do much worse. For example, the 2000s are often considered a lost decade in the stock market, as the S&P 500 was essentially flat from its peak in 2000 to 2013 due to the dot-com bust and the Great Financial Crisis. Since then, the index has surged, ultimately rewarding investors who endured those twin crashes. Overall, staying invested can help smooth out the volatility that occurs over short-term periods. It also avoids the need to decide when to get back into the market if you sell, which can be much more difficult than simply looking at a stock chart and buying at the bottom. Should you invest $1,000 in S&P 500 Index right now? Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
Yahoo
5 days ago
- Business
- Yahoo
The UK's weak economic growth and Brexit: Is the worst over?
Nine years after the vote on Brexit, the latest UK economic indicators send a strong message about an ailing economy that is yet to emerge from the shadows of the 'leave' vote. According to experts, some of the negative impacts of Brexit will endure. GDP has been contracting for two consecutive months, coupled with rising inflation and unemployment, and accompanied by a highly uncertain geopolitical environment and trade wars. UK GDP grew by 0.7% quarter-on-quarter in the first three months of 2025, but monthly data shows that the output contracted 0.1% in May after a 0.3% decline in April. According to S&P Global Ratings, these figures put the economy on course for 0.1% GDP growth in the second quarter, if there is no growth in June. Inflation increased to 3.6% in June — up from 3.4% in May and slightly ahead of expectations. This ties the hands of the Bank of England, which is aiming for a 2% inflation target before it lowers the benchmark rate, currently sitting at 4.25%. These weak datasets indicate that the UK has 'little spare capacity to grow,' Marion Amiot, Chief UK Economist at S&P Global Ratings, told Euronews Business. Some hope that the UK will be able to boost its GDP through exports, supported by trade agreements, including the latest with the US. However, exports alone might not be enough to fix a fundamental problem: the UK is contending with cripplingly low productivity. According to Amiot, productivity woes partially stem from Brexit. 'It has contributed to reducing the UK's labour supply and pulled the brakes on investment on the back of uncertainty in the years following the referendum,' she said. She added that sluggishness in the key financial services sector has also been playing a role: 'Productivity growth in the UK has been particularly weak since the Great Financial Crisis, especially in the financial sector.' UK labour statistics are also signalling a difficult path ahead for the economy. The number of job vacancies has been falling since April 2022. Unemployment in the country has been on the rise since August 2024, and sat at 4.7% in May, the highest level in four years. Related What would a UK-EU thaw mean for financial services? Brexit impact keeps getting worse, economists warn As poor productivity limits wage growth, this is expected to slow inflation. 'Wage growth has slowed, and unemployment has risen again. For the Bank of England, this is a sign of growing slack in the labour market, which is likely to ease inflationary pressures, and means it can cut rates sooner rather than later,' said Sarah Coles, head of personal finance at Hargreaves Lansdown. Job vacancies have also been falling due to higher costs, partially attributed to the UK government's decision to increase national insurance contributions, a cost that employers pay for every person on the payroll. What Brexit really cost the UK Nine years after the referendum, the Office for Budget Responsibility (OBR) assessed the economic impact of Brexit. Researchers came to the conclusion that — since 2020 — withdrawal from the EU has led to reduced productivity, lowering GDP by 4%, and trade by about 15%, in both goods and services, compared to a 'remain scenario'. Brexit has also had a sizeable impact on shrinking investments. According to John Springford, an associate fellow at the London-based think-tank Centre for European Reform, Brexit has cost the state £40 billion (€46.1bn) since 2019. 'The 2019-2024 parliament raised taxes by around £100 billion, and if we take the OBR's 4% loss of productivity to be the true figure, £40 billion of those tax rises were needed because of EU withdrawal,' he wrote in a recent study. Is the worst over? 'Brexit is going to have a long-term impact on UK growth beyond the initial fallout seen in trade,' said Amiot, adding that 'with a smaller pool of workers and weaker competition leading to lower productivity, the capacity of the UK to grow will remain durably lower'. She clarified: 'That being said, most of the large impacts are likely behind us.' The years following Brexit came with an increased uncertainty for businesses, and left a sizeable impact on investment, which stagnated for five years, before it returned to growth. Investment is now rising again and has surpassed its pre-Brexit referendum levels. According to the Office for National Statistics (ONS), gross fixed capital formation (GFCF) and business investment both increased to record levels in the first quarter of 2025. Trade with the EU also struggled, but that could have been partially attributed to a range of other factors, including the impacts of the COVID-19 pandemic and the global slowdown of trade in goods. 'Although much of the initial economic disruption has likely faded as firms adjusted, Brexit still appears to be weighing on export levels and GDP,' Andrew Hunter, Associate Director at Moody's Analytics, told Euronews Business. He added that goods exports to the EU are still 16% lower in real terms, compared to the end of 2019 (before the pandemic and before the UK began leaving the EU). 'And goods exports to non-EU countries have actually performed even worse,' Hunter said. He added that the UK has significantly lagged behind other advanced economies in this respect, due to a 'broader hit to the export sector from Brexit-related trade barriers (with many firms choosing to stop exporting altogether due to the added costs and paperwork).' Many hope the recent trade deal with the US will improve the economy by attracting investment into the country. And the US-UK trade deal provides relief for certain industries in particular. While the EU is finalising its potential countermeasures, including a tariff on US aircraft imports, almost certain to attract a retaliation, the UK has secured free trade for its aerospace sector. Yet, experts are sceptical about the overall contribution of the trade deal to the UK economy. S&P Global Ratings estimates 'that US tariffs are going to represent a direct drag on UK GDP of around 0.1 percentage point this year and next,' partly due to weaker global demand. And other trade deals are also unlikely to boost exports too much. 'The UK government's recent 'reset' deal with the EU has eased some trade barriers, particularly for food and agriculture, but further progress is expected to be slow,' said Hunter, adding that he doesn't expect a strong export rebound in light of global trade uncertainty. According to Springford, Free Trade Agreements (FTAs) signed since Brexit have had a very limited impact. 'The macroeconomic benefit of the new FTAs the UK has signed is very small, only offsetting the 4% loss from Brexit by about 0.2%. Even if a full FTA were signed with the US, that would rise to about 0.35%.' Related UK decision to leave EU a 'disaster' costing thousands of jobs - Lord Mayor A clouded UK economic outlook In the short term, the currently ailing economic output has been fuelling expectations that the government will have to make up for the missing tax revenue by hiking tax rates in the second half of the year, further constricting GDP growth. In the long run, experts agree that the UK's growth will be slower than if it had stayed in the EU. This is due to the fact that the structural changes associated with losing access to the EU market have meant that the UK is missing out on workers, investment and trade opportunities. Looking ahead, the primary source of uncertainty and risk remains productivity, according to the Chief UK Economist at S&P Global Ratings. 'While most forecasts anticipate a rebound in productivity that could support stronger growth, the outlook is clouded by uncertainty around the implementation of government growth policies and the pace at which AI technologies will be adopted,' Amiot said. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Euronews
5 days ago
- Business
- Euronews
The UK's weak economic growth and Brexit: Is the worst over?
Nine years after the vote on Brexit, the latest UK economic indicators send a strong message about an ailing economy that is yet to emerge from the shadows of the 'leave' vote. According to experts, some of the negative impacts of Brexit will endure. GDP has been contracting for two consecutive months, coupled with rising inflation and unemployment, and accompanied by a highly uncertain geopolitical environment and trade wars. UK GDP grew by 0.7% quarter-on-quarter in the first three months of 2025, but monthly data shows that the output contracted 0.1% in May after a 0.3% decline in April. According to S&P Global Ratings, these figures put the economy on course for 0.1% GDP growth in the second quarter, if there is no growth in June. Inflation increased to 3.6% in June — up from 3.4% in May and slightly ahead of expectations. This ties the hands of the Bank of England, which is aiming for a 2% inflation target before it lowers the benchmark rate, currently sitting at 4.25%. These weak datasets indicate that the UK has 'little spare capacity to grow,' Marion Amiot, Chief UK Economist at S&P Global Ratings, told Euronews Business. Some hope that the UK will be able to boost its GDP through exports, supported by trade agreements, including the latest with the US. However, exports alone might not be enough to fix a fundamental problem: the UK is contending with cripplingly low productivity. According to Amiot, productivity woes partially stem from Brexit. 'It has contributed to reducing the UK's labour supply and pulled the brakes on investment on the back of uncertainty in the years following the referendum,' she said. She added that sluggishness in the key financial services sector has also been playing a role: 'Productivity growth in the UK has been particularly weak since the Great Financial Crisis, especially in the financial sector.' UK labour statistics are also signalling a difficult path ahead for the economy. The number of job vacancies has been falling since April 2022. Unemployment in the country has been on the rise since August 2024, and sat at 4.7% in May, the highest level in four years. As poor productivity limits wage growth, this is expected to slow inflation. 'Wage growth has slowed, and unemployment has risen again. For the Bank of England, this is a sign of growing slack in the labour market, which is likely to ease inflationary pressures, and means it can cut rates sooner rather than later,' said Sarah Coles, head of personal finance at Hargreaves Lansdown. Job vacancies have also been falling due to higher costs, partially attributed to the UK government's decision to increase national insurance contributions, a cost that employers pay for every person on the payroll. What Brexit really cost the UK Nine years after the referendum, the Office for Budget Responsibility (OBR) assessed the economic impact of Brexit. Researchers came to the conclusion that — since 2020 — withdrawal from the EU has led to reduced productivity, lowering GDP by 4%, and trade by about 15%, in both goods and services, compared to a 'remain scenario'. Brexit has also had a sizeable impact on shrinking investments. According to John Springford, an associate fellow at the London-based think-tank Centre for European Reform, Brexit has cost the state £40 billion (€46.1bn) since 2019. 'The 2019-2024 parliament raised taxes by around £100 billion, and if we take the OBR's 4% loss of productivity to be the true figure, £40 billion of those tax rises were needed because of EU withdrawal,' he wrote in a recent study. Is the worst over? 'Brexit is going to have a long-term impact on UK growth beyond the initial fallout seen in trade,' said Amiot, adding that 'with a smaller pool of workers and weaker competition leading to lower productivity, the capacity of the UK to grow will remain durably lower'. She clarified: 'That being said, most of the large impacts are likely behind us.' The years following Brexit came with an increased uncertainty for businesses, and left a sizeable impact on investment, which stagnated for five years, before it returned to growth. Investment is now rising again and has surpassed its pre-Brexit referendum levels. According to the Office for National Statistics (ONS), gross fixed capital formation (GFCF) and business investment both increased to record levels in the first quarter of 2025. Trade with the EU also struggled, but that could have been partially attributed to a range of other factors, including the impacts of the COVID-19 pandemic and the global slowdown of trade in goods. 'Although much of the initial economic disruption has likely faded as firms adjusted, Brexit still appears to be weighing on export levels and GDP,' Andrew Hunter, Associate Director at Moody's Analytics, told Euronews Business. He added that goods exports to the EU are still 16% lower in real terms, compared to the end of 2019 (before the pandemic and before the UK began leaving the EU). 'And goods exports to non-EU countries have actually performed even worse,' Hunter said. He added that the UK has significantly lagged behind other advanced economies in this respect, due to a 'broader hit to the export sector from Brexit-related trade barriers (with many firms choosing to stop exporting altogether due to the added costs and paperwork).' Many hope the recent trade deal with the US will improve the economy by attracting investment into the country. And the US-UK trade deal provides relief for certain industries in particular. While the EU is finalising its potential countermeasures, including a tariff on US aircraft imports, almost certain to attract a retaliation, the UK has secured free trade for its aerospace sector. Yet, experts are sceptical about the overall contribution of the trade deal to the UK economy. S&P Global Ratings estimates 'that US tariffs are going to represent a direct drag on UK GDP of around 0.1 percentage point this year and next,' partly due to weaker global demand. And other trade deals are also unlikely to boost exports too much. 'The UK government's recent 'reset' deal with the EU has eased some trade barriers, particularly for food and agriculture, but further progress is expected to be slow,' said Hunter, adding that he doesn't expect a strong export rebound in light of global trade uncertainty. According to Springford, Free Trade Agreements (FTAs) signed since Brexit have had a very limited impact. 'The macroeconomic benefit of the new FTAs the UK has signed is very small, only offsetting the 4% loss from Brexit by about 0.2%. Even if a full FTA were signed with the US, that would rise to about 0.35%.' A clouded UK economic outlook In the short term, the currently ailing economic output has been fuelling expectations that the government will have to make up for the missing tax revenue by hiking tax rates in the second half of the year, further constricting GDP growth. In the long run, experts agree that the UK's growth will be slower than if it had stayed in the EU. This is due to the fact that the structural changes associated with losing access to the EU market have meant that the UK is missing out on workers, investment and trade opportunities. Looking ahead, the primary source of uncertainty and risk remains productivity, according to the Chief UK Economist at S&P Global Ratings. 'While most forecasts anticipate a rebound in productivity that could support stronger growth, the outlook is clouded by uncertainty around the implementation of government growth policies and the pace at which AI technologies will be adopted,' Amiot said.
Yahoo
19-07-2025
- Business
- Yahoo
What if the Fed cut rates to just 1% like Trump wants? An analyst says it's ‘ludicrous' and may scare businesses
The federal funds rate currently sits at 4.25%-4.50%, but President Donald Trump has said it should go down to just 1%. A rate that low would boost inflation expectations and send long-term Treasury yields higher, but also send a signal that something extreme may be developing in the economy, according to a Wall Street analyst. Amid the White House's unrelenting pressure campaign on Federal Reserve Chairman Jerome Powell, President Donald Trump has not only demanded that the central bank to cut rates but to lower them all the way to 1%. The federal funds rate currently sits at 4.25%-4.50%, meaning a reduction of that magnitude would require a drastic move that goes well beyond the Fed's typical increments of a quarter point at a time (though it last cut by half a point in September). It's so extreme, Wall Street doubts it would actually happen, as it would trigger immense turmoil in financial markets and the economy. 'I don't think this needs to be taken too seriously, because it's so ludicrous, and in some ways cutting rates too low, too prematurely, too early would do exactly what you don't want to happen,' Jeffrey Roach, chief economist at LPL Financial, told Fortune. That's because long-term Treasury yields would spike as bond investors price in higher expectations for inflation that a 1% rate would stoke, raising borrowing costs for consumers and businesses. In addition, a rate that low is usually associated with an economic emergency like the COVID-19 pandemic or the Great Financial Crisis. So 1% may actually shock businesses into wondering if another calamity is lurking around the corner, prompting them to hunker down and wait rather than expand, Roach warned. 'As a big business owner looking at rates at 1% or 2%, I'm definitely saying, 'what do you know that I don't?'' he said. 'Hence I'm not going to respond by increasing capex and increasing operations to the company. I'm going to be even more concerned with what that signals.' A White House spokesman pointed to Trump's previous comments that the Fed always can and should raise rates again if inflation spikes after cutting them. For his part, Roach thinks there's probably room for rates to eventually drop to about 3.5% by the end of 2026, if inflation stays under control, and said Powell didn't raise rates soon enough when inflation was surged after the pandemic. Similarly, Infrastructure Capital Advisors CEO Jay Hatfield accused Powell of gross incompetence by being too late to raise rates but also blasted the idea of the Fed slashing rates to 1%. Treasury yields would initially drop in the immediate aftermath of a cut to 1%. But once inflation indicators start pointing higher, the fed funds rate would go back up to 4% to shrink the money supply, sending the 10-year yield to about 5%. After a mini-recession or a big pullback, the yield would end up around 3.75%. 'So it's horrible economic policy to do that,' he told Fortune. A fed funds rate around 2.75%-3% wouldn't stoke inflation or send the economy into a downturn, but keeping rates where they are now would trigger a recession, Hatfield added. A 1% rate, however, would require a massive expansion in the money supply. 'It's absolutely a ridiculous idea and will cause double-digit inflation,' he warned. This story was originally featured on Sign in to access your portfolio
Yahoo
14-07-2025
- Business
- Yahoo
2 Canadian Blue-Chip Stocks to Buy Before it's Too Late
Written by Chris MacDonald at The Motley Fool Canada When some investors think of the Canadian stock market, energy and resource companies may be the first that come to mind. Canada does have a very resource-centric economy, and as such, this is the sector that often gets the closest look from international investors looking to diversify into TSX-traded stocks. That said, there are a number of other high-quality blue-chip stocks I think are worth considering. In my view, the following two names are among the best options for investors looking for solid total returns over the long haul. These are companies that not only provide solid growth upside over the long term, but are also among the top dividend stocks I've got my eye on right now. I continue to hammer the table on utility giant Fortis (TSX:FTS) as a great long-term investment for those looking for rock-solid total returns. Given the company's core business model of providing essentials to its core residential and commercial customer base (no one can go without lights and heat for very long), Fortis continues to earn very stable cash flows that it returns to investors over time. Aside from being a classic defensive stock for investor portfolios, Fortis also has the backing of some very strong fundamentals investors can rely on for continued revenue and earnings growth. With the company's earnings per share rising to $1.00 from $0.93 in the same quarter the year prior, and revenue also increasing by a similar amount, this is a company which should provide roughly 10% overall growth investors can rely on. Over time, Fortis has delivered dividend growth in the 6% range for long-term investors, with an impressive 50-year streak of consecutive dividend hikes. I'd expect that track record to continue, making Fortis's current dividend yield of 3.8% much more impressive on an absolute basis. Another top blue-chip Canadian stock I think can get overlooked relative to other premium names is Brookfield Asset Management (TSX:BAM). The company's business model is a bit more diverse than many TSX-listed stocks. With a portfolio of global alternative assets in a number of in-demand industries, Brookfield has benefited from the rather robust global growth trends we've seen play out since the Great Financial Crisis. Of course, there's always the potential that another recession will be headed our way, and that could impact the company's business. However, Brookfield's historically impressive stability and its broad asset base provide some cushion and diversification for investors seeking such attributes. With a current dividend yield of 3.2%, Brookfield is no slouch in this department either. And with a market capitalization of more than $90 billion and margins of 57% (up from 54% the year prior), this is a stock I think investors can buy and hold with confidence in this current market environment. The post 2 Canadian Blue-Chip Stocks to Buy Before it's Too Late appeared first on The Motley Fool Canada. Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now. Claim your FREE 5-stock report now! More reading 10 Stocks Every Canadian Should Own in 2025 [PREMIUM PICKS] Market Volatility Toolkit A Commonsense Cash Back Credit Card We Love Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
