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Millbrook Advisors, LLC - a fee only financial planning firm - offers this blog on selected planning topics for the use of the general public. Millbrook is not an investment adviser and does not offer, for compensation, advice on the value of securities or the advisability of investing in securities.
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Financial planning tip for the day from Shakespeare!
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 Investigate the free, interactive and self-directed financial planning advice available on this website.
Complete a shortself survey to determine your financial risk tolerance and suggested asset allocation. Investigate the many benefits of the super IRA - a.k.a. health savings account. Analyze the rent vs. buy investment tradeoff for homes in your area. And more!
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The chart below presents key trends in the US stock market since we dumped the gold standard in 1972:
- The blue line is the S&P 500 index in log scale
- The violet line is the composite earnings of the S&P500 in log scale
- The shaded bars are the official recessions during the period
- The yellow X-factor line (right axis) is the difference between the actual S&P earnings yield and the S&P earnings yield estimated by a regression on the yield on AAA corporates and the inflation rate through 2023.
While the random walk theory is a powerful one, we at Millbrook Advisors nevertheless find the X-factor helpful. When it goes strongly negative, the market seems headed for trouble. During the quarter ended June 30, 2025 the X-factor jogged in place as a price increase was offset by an inflation downtick. The Fed kept rates on hold. Trump's tariffs are still up in the air, leaving the market outlook still uncertain.
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Recent financial news that we, with our contrarian bent, found worthy of note:
- Soft landing ahead? In order to control inflation, the Fed has forced a rapid and steep inverse yield curve. History has shown that this approach frequently results in a Fed induced recession with higher unemployment a resulting but needed corrective. Some months into this regime, however, unemployment has stayed low and corporate earnings are hanging in there. Mainstream economists have largely thrown in the towel and a predicting a soft landing.
- Is Gold the Real Deal? Keynes dismissed gold as a barbarous relic; gold bug is not usually offered as a complement. Yet the trailing 20-year average return for gold is 9.4 % as of 12/31/24. In 2024 gold - with an annual return of 25% - took first place among major asset classes and clobbered bonds.
- Is College Worth It? Absolutely. Although saving and paying for college is a huge challenge for many families, the payoff is high. Of CareerCast's Best 20 jobs for 2019, all require a college degree or more. These jobs are an eclectic and interesting mix.
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