This past week, the Nobel Prize in Economics was awarded to professor Richard Thaler. Thaler basically showed that we as human beings behave very irrationally when it comes to finances. We are basically a nation of procrastinators rather than a nation of portfolio managers. He predicted that given a choice to start contributing to a 401k most people would put off that decision indefinitely focusing on the next big purchase. Since the automatic enrollment to employer plans went into effect, it is estimated at least 15MM more people are now saving for retirement, and 90% stick with it once enrolled thanks in part to his research. His most famous comment, “what investors fear even more than losing money is having to say ‘What an idiot I am.”
In the markets this week U.S. stocks were little changed but foreign stocks had substantial gains. Treasury yields were down slightly and the dollar fell. The Euro gained based on Catalonia’s willingness to negotiate rather than immediately declare independence. Commodities in general were higher led by gold and oil.
In the numbers, this week:
- Eurozone industrial output rose 1.4% in August.
- The Labor Department reported
- Initial claims for unemployment in the prior week fell 15,000 to a seasonally adjusted 243,000 as the U.S. recovers from the hurricanes.
- Producer prices rose 0.2% in August. Most of the increase was due to higher gasoline prices. Excluding food and energy producer prices rose 0.1%
- Consumer prices rose 0.5%. Excluding food, energy and autos consumer prices rose only 0.1%.
- The Commerce Department reported:
- Retail sales rose a seasonally adjusted 1.6%. The gain was accelerated by higher gasoline prices and higher auto sales, both as a result of hurricanes. Still, excluding gas and autos retail sales rose 0.5%.
- The Energy Information Administration’s Weekly Petroleum Data report is here wpsrsummary (5).
- The Energy Information Administration reported
- Weekly field production of crude oil fell 81,000 barrels per day in the prior week.
- Natural gas in storage rose 87Bcf last week from the prior week.
- Baker Hughes reported that oil drilling rigs fell 5 to 743. Gas drilling rigs fell 2 to 185.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik Smith
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.