Inflation is defined as an increase in the price of goods and services that results in a decrease in the buying power of money. Depending on the conditions, inflation might benefit both borrowers and lenders. Prices can be directly affected by the money supply; prices may rise as the money supply rises, assuming no change […]
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You have a sizable emergency fund. Always try to save enough money to cover three to six months’ worth of living expenditures, with the latter end of that range being preferable. If you happen to be there and have any spare cash, feel free to invest it. If not, make sure to set aside money
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Most investors should avoid investing in highly leveraged, cyclical, or speculative companies during a recession, as these companies have the highest likelihood of doing poorly during difficult economic circumstances. Investing in well-managed companies with little debt, high cash flow, and robust balance sheets is a superior recession strategy. In a downturn, counter-cyclical equities do well
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A zero-sum game occurs when one party loses and the other gains, resulting in a net change in wealth of zero. Futures and options are zero-sum games in financial markets since the contracts represent agreements between two parties, and if one investor loses, the money is transferred to another. Because the eventual result might benefit
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Raising the minimum wage, in theory, forces business owners to raise the pricing of their goods or services, causing inflation. Is it true that increasing the minimum wage causes inflation? As inflation reaches historic highs, lawmakers and analysts are debating the causes, which include pandemic-related shocks as well as government-imposed limitations and swings in consumer
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Stock futures are more of a bet than a prediction. A stock futures contract is an agreement to buy or sell a stock at a specific price at a future date, independent of its current value. Futures contract prices are determined by where investors believe the market is headed. What is the status of futures?
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A recession is a long-term economic downturn that affects a large number of people. A depression is a longer-term, more severe slump. What is the average length of a typical recession? The National Bureau of Economic Research (NBER) keeps track of the average length of US recessions. According to NBER data, the average recession lasted
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Inflation is still alive and well. Recent supply shocks, on the other hand, have shifted wage and price inflation to a lower level. Inflation can only stay this low, according to a revalidated, conventional model of US inflation, if the jobless rate climbs to between 5.5 and 6% during the following year. Is inflation on
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Inflation, according to economists, occurs when the supply of money exceeds the demand for it. When inflation helps to raise consumer demand and consumption, which drives economic growth, it is considered as a positive. Some people believe inflation is necessary to prevent deflation, while others say it is a drag on the economy. Some inflation,
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When inflation is high, value stocks perform better, and when inflation is low, growth stocks perform better. Why do equities fall when inflation rises? Consumers can buy fewer things when inflation rises, input prices rise, and earnings and profits fall. As a result, the economy slows until the situation stabilizes. High interest rates and price
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