Underdog Investors

Remember the days when the Federal Reserve and central banks were slashing interest rates and “printing money” to boost economies after the global financial crisis? Everyone worried interest rates would stay low forever. The Fed seemed concerned that the world’s largest economy wasn’t moving forward – with close to zero inflation, potential “double-dip” recessions, and consumers not spending as much as before. Fast forward to today, and the script has flipped. Now, markets worry that interest rates will stay high forever. It sounds strange, doesn’t it? Back then, Wall Street cheered any hint of a rate increase. Today, it boos at the mere thought of it. But here’s the big question: Does worrying about interest rates truly matter? Should we even bother? Key Takeaways Focus on What You Can Control: Interest rates are out of our control. Instead, focus on things you can control, like how much you save, the businesses you invest in, and expanding your knowledge. Consistency is Key: Success ...

The World's Favorite Currency The US dollar is the closest thing the world has to a global currency. It is the preferred choice for most international transactions and is held as a reserve currency by many countries, whether friendly or hostile to the US. The dominance of the dollar began in earnest after World War II when the US emerged as a global superpower. Investors trust the dollar and US assets, such as US Treasuries, because they are seen as safe places to store wealth in both good times and bad. This trust is underpinned by the strength and stability of the US economy and its laws. Why Is the Dollar So Dominant? 1. It’s Big The size of the US economy is a primary reason for the dollar's dominance. The US economy is massive, almost as large as the economies of China, Japan, and Germany combined. This economic heft is supported by the largest and most liquid capital markets in the world. US stock markets, home to many of the world's wealthiest and most innovative com...

What is the Stock Market, Anyway? Have you ever been to a market where people buy and sell fresh fruits, veggies, or maybe some cool handmade crafts? Well, the stock market is kind of like that, but instead of selling fresh apples or beautiful artwork, people buy and sell pieces of companies. These pieces are called "stocks," and the market where they're traded is what we call the "stock market." How Does the Stock Market Work? Imagine if your favorite lemonade stand in the neighborhood decided to grow bigger and needed money to do so. They might sell parts of their business to friends, family, or anyone interested in investing. In return, buyers would own a piece of the lemonade stand and share in its success. This is essentially what happens in the stock market. Companies sell parts of themselves in the form of stocks, and people buy them hoping the company grows so their shares become more valuable. Why Do People Invest in the Stock Market? To Make Money:  Ju...

Unlocking the Magic of Your Money Ever wondered what it would be like if your money could multiply while you sleep? That’s not just a dream—it’s the reality of compound interest! Imagine planting a single apple seed and, over time, not only does it grow into a tree full of apples, but those apples drop more seeds, growing even more trees. This is how compound interest works with your money, turning your initial investment into a growing orchard over time. What is Compound Interest? Simply put, compound interest is the interest you earn on both your original money and the interest that money has already earned. It’s like a snowball rolling down a hill; as it rolls, it picks up more snow, getting bigger and faster. When you invest money, compound interest ensures that your savings grow faster because you’re earning interest not just on your initial amount, but also on the interest that accumulates each year. How Does Compound Interest Work? Let’s break it down with a simple example. Imag...

What is Investing, and How is it Different from Saving? Imagine you’ve got a garden. In one part of it, you’ve dug a hole and buried your favorite coins, kind of like a treasure. That’s saving – you’re keeping your money safe, but it just sits there, not doing much. Now imagine another part of your garden where you plant seeds. These seeds grow into plants, and if you’re lucky, they might even sprout some fruit or flowers that you can sell. That’s investing – you're putting your money to work, hoping it grows over time and gives you more back than you started with. Investing is not just for the super-rich; it’s a powerful tool for anyone who wants to build their wealth. By investing, you take a chance by putting your money into things like stocks, bonds, or real estate, hoping that, over time, they will increase in value and make more money. Why Should You Invest? Let’s face it, we all dream about buying a cool car, owning a home, or maybe even traveling the world one day. To make ...