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Building a robust portfolio, Tim debuts his Investing 101 series, Bennett explains how the Fed Funds Rate is actually set, Jon shares new Knowledge Base articles.

01. See you Sunday!

From Nate Hoskin, Founder & Lead Advisor

The focus of March is building a community of people who have made financial independence a priority. Since you subscribe to this newsletter, I know you have already made it a pillar in your life.

We’re getting a group of people together on Google Meet for 45 minutes this Sunday, March 5 at 4pm EST. This is designed to be a space for us to answer any questions you have and share our insights on the stormy markets this year.

Topics we are planning to discuss:

• Why risk management is a great way to improve your own portfolio

• How portfolio optimization works and how to use it yourself

• How CAPM and Beta can help you uncover weakness in your portfolio

Claim the last five seats below.

RSVP and Learn More

02. Investing 101

From Tim Frenzel, Head of Data Analytics & Research

03. “When your only tool is a hammer”

From Bennett Fees, Economic Research Associate

“…you tend to see every problem as a nail,” as the saying goes, but what exactly does this mean when commentators apply it to monetary policy? While the ‘nail’ in this phrase is inflation, which, as we’ve discussed, requires specific measures to find, the ‘hammer’ in this saying is less clear.

Considering short-term rates, the mechanism by which the Federal Funds Rate is adjusted (or the construction of the ‘hammer’) has changed dramatically since Great Financial Crisis with the shift towards an ‘ample-reserves’ approach. In this new system, the interest rate on reserves (IOR) is the primary way the Fed sets the Federal Funds Rate (FFR) and affects short-term interest rates as banks have little incentive to lend reserves at rates lower than the IOR.

Additionally, the overnight reverse repurchase agreement rate (ON RPP) is a supplementary tool for financial institutions that do not have access to the interest paid on reserves. Long-term rates, however, are consistently a game of the Fed convincing investors that their hammer is indeed big enough.

This is why the hammer analogy misses a key part of the picture: not only is it about finding the nail and having a hammer that is constructed properly (measuring inflation and how the FFR is adjusted), but it’s equally about conveying to people that your hammer is big enough to do the job!

You can read my full workup for free below.

Read the Article

04. New to the Knowledge Base

From Jon Scott, Lead Author

We have some exciting new additions to the Knowledge Base over the past two weeks. If you haven’t already, become a member to check out these great articles:

1. Active vs. Passive Investing by Jon Scott

   1. What is active investing

   2. What is passive investing

   3. Different types of active investing (strategic vs tactical)

   4. When is active investing better? When is passive investing better?

   5. How to pick which is right for you

2. Introduction to Impact Investing by Jessica Dosseh

   1. Impact investing reflects your personal values.

   2. It's possible to focus on social impacts while also making competitive financial returns.

   3. Socially responsible (SRI) and environmental, social, and governance (ESG) investing are two different approaches to impact investing.

   4. It's important to do your research and select investments that have clearly identified intentions to avoid greenwashing.

3. Net Worth: How to calculate, manage, grow by Roshan Pourghasemi

   1. Strategies on how to view your net worth

   2. What are common parts of your net worth that will grow/what assets will be added as you advance in your career?

   3. How to measure liquidity

4. How much should you have saved for retirement by Jessica Dosseh

   1. The two most important factors to consider when saving for retirement

   2. Baseline goals for the amount of money you will need to retire comfortably

   3. The accounts and assets you will need to utilize to maximize the money saved for retirement

   4. How social security compliments your retirement savings

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What do you want to learn about next?

Which retirement accounts to use

Using AI to accelerate your career & portfolio

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“The key is to keep company only with people who uplift you, whose presence calls forth your best.”

- Epictetus

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