Good Samaritans Still Exist Show 37

David begins this show by sharing a story about a young lady who was involved in an auto accident. Fortunately, a good Samaritan came by and freed her from her car before it burst in to flames. The two are later connected. David shares the details of how it unfolded.

David then discuss an article CNBC published an article last year titled, The Fed is buying some of the biggest companies’ bonds, raising questions over why. The points the article covered are:

The Federal Reserve is continuing to buy corporate bonds, following up on a pledge it made in March.Corporate America titans such as Microsoft, Apple, Visa, and Home Depot have been among the beneficiaries.Questions have been raised over “moral hazard” as the Fed buys debt from companies that don’t seem to need the central bank’s help.Indirectly through exchange trade funds the government holds investments in companies like Apple and Goldman Sachs also.The government has even purchased bonds of speculative-grade.

So, what’s the government doing? The Federal Reserve seeks to stabilizes financial markets during periods of major economic volatility. This is commonly referred to as quantitative easing (QE), which is the technical name. America is currently in itself fourth installment of quantitative easing.

The government bought trillions of dollars of bonds after the Great Recession began from 2008 to 2014. During that time the Fed accumulated $4.5 trillion in assets. In September 2019, the Federal Reserve began conducting quantitative easing. This was six months before Covid 19 came to the forefront of most of our minds. 

March 2020 the government announced it would begin purchasing $700 billion in assets. And quantitative easing continues today. Some commentators are saying it will be permanent. Nobody knows if QE is sustainable or how long it will last. No one is privy to knowing the future. But what I do know is that our philosophy in how we manage money is incredibly beneficial in times like these.

Active management of stock market investments combined with buckets of money that are safe from losses may be beneficial for a retiree.  If you’re interested in learning more about how we build financial plans, please Click Here to schedule a call with David or call  our office at 864.641.7955.

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