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Money Talk Quiz, September 2021

Dollar Question

Through articles on the Money Talk page and discussions during the weekly Money Talk Podcast, Landaas & Company advisors offer insights into the ever-changing financial markets. They help long-term investors make sense of what is going on and what it means to their portfolios. To see if you’re paying attention, try to provide the context for a sample of what advisors have talked about recently.

1.

“We’re seeing a changing environment leading to a change in leadership within the equity market.”

What was Chris Evers talking about when he shared that comment on the July 30 Money Talk Podcast? (Choose one.)

  1. A recent push to issue public stock while market valuations are high
  2. An unusually swift back-and-forth in outperformance between growth stocks and value stocks
  3. Turnover among the top executives at the major stock exchanges
  4. Increasing interest in stocks that might benefit from concerns about climate change

(See correct answer below.)

2.

“One of the first things I learned in managing money decades ago was ‘Don’t fight the Fed.’ It took me a while to fully understand that, but I’m a believer after 45 years: Don’t fight the Fed.”

In his remarks during the Aug. 13  Money Talk Podcast, what did Bob Landaas mean by “Don’t fight the Fed?” (Choose one.)

  1. For every investment decision, foremost consider federal income tax consequences.
  2. Always trust the federal government to have investors’ best interests at heart.
  3. Ignore federal deficits at your own risk.
  4. Stocks remain attractive in part because the Federal Reserve says it will keep interest rates low in the near term.

(See correct answer below.)

3.

“Considering all the money you’ve made over 2019, 2020 and even up to now, you’re still going to be way ahead from where you were a year or two ago.”

What was the broader context of these remarks Mike Hoelzl made in the Aug. 13 Money Talk Podcast? (Choose one.)

  1. Back-to-school spending is likely to take a big bite out of household savings.
  2. Investors should put taxes in perspective.
  3. Occasionally the stock market incurs a sell-off, but investors tend to prosper over time.
  4. Long-term investors can afford to consider more charitable giving.

(See correct answer below.)

4.

“You really need to understand the risk of an investment before you make a decision to participate. Beyond just understanding it, I think it’s also then important to evaluate, ‘Am I being compensated properly for the amount of risk that I’m taking?’”

Although sound advice in general, what particular investments was Dave Sandstrom commenting on during the Aug. 20 Money Talk Podcast? (Choose one.)

  1. High-yield bonds
  2. Small-cap stocks
  3. Meme stocks
  4. Treasury Inflation-Protected Securities

(See correct answer below.)

Answers

1.

b. An unusually swift back-and-forth in outperformance between growth stocks and value stocks

“Leadership is normally maintained for a while,” Bob Landaas said in response to Chris. “That’s why the expression ‘the trend is your friend’ became popular. It really speaks to the issue of how important it is to diversify your stock holdings, because it’s difficult to figure out exactly at what point in time which asset class will outperform.”

Learn more
Value & Growth: Going deeper, a Money Talk Video with Brian Kilb and Marc Amateis
Talking Money: Growth vs. Value, by Paige Radke
Investors and the business cycle, a Money Talk Video with Dave Sandstrom

2.

d. Stocks remain attractive in part because the Federal Reserve says it will keep interest rates low in the near term.

Learn more
Earnings, interest rates and valuationsa Money Talk Video with Brian Kilb
Uneven recovery early suggests balance, by Kyle Tetting
Federal Reserve holdings: What to know, a Money Talk Video with Marc Amateis

3.

c. Occasionally the stock market incurs a sell-off, but investors tend to prosper over time.

Learn more
Lessons from the quick sell-off of 2020, by Kyle Tetting
Keeping balance in unnerving times, by Bob Landaas
Corrections: A normal part of investing, a Money Talk Video with Marc Amateis
The importance of humility in investing, a Money Talk Video with Art Rothschild

4.

a. High-yield bonds

In the same discussion, Kyle Tetting referred to a report of a record pace of so-called junk bond issues, despite historically low yield spreads: “It may be a sign that investors are more willing to reach for potential yield, more willing to reach for potential returns, than what we might otherwise advise.”

Learn more:
Higher yield, junky risks, a Money Talk Video with Brian Kilb
Bond investors: Look at credit quality, spreads, a Money Talk Video with Marc Amateis
What Are High-yield Corporate Bonds? from the Securities and Exchange Commission
Allocation to optimize reward vs. riska Money Talk Video with Dave Sandstrom
Investor trade-off: Risk vs. return, a Money Talk Video with Paige Radke

Previous Money Talk Quizzes
Money Talk Quiz, August 2021
Money Talk Quiz, July 2021
Money Talk Quiz, June 2021
Money Talk Quiz, May 2021
Money Talk Quiz, April 2021
(initially posted September 2, 2021)

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