Author: Money Mechanics

Key Takeaways Brokerage commissions, bid-ask spreads, and taxes steadily erode your returns, even when your stock picks look smart on paper. Buffett’s decade‑long $1 million bet proved the point. A low‑cost S&P 500 index fund beat a hand-picked basket of hedge funds by almost four‑to‑one between 2008 and 2017. Skill is rare, costs are certain. While some research suggests frequent trading can be rational, Buffett counters that “the great majority of managers who attempt to over‑perform will fail.” You may have heard that most day traders lose money over time, and that passive index investing is the way to go.…

Key Takeaways Airline earnings are set to kick off this week with results from Delta. United Airlines, Alaska Airlines, and others are set to follow later this month.Investors and analysts are likely to focus on their outlooks for 2026, and what executives have to say about the state of travel demand. Investors could get an early peek into the outlook for travel demand this year as major airlines start reporting earnings this week. Delta Air Lines (DAL) is set to lead the way with its results on Tuesday. Several others will follow later in the month, with United Airlines (UAL)…

Key Takeaways Gold rose to a record-high $4,640 an ounce on Monday morning following news the Justice Department has launched a criminal investigation related to testimony by Federal Reserve Chair Jerome Powell.The investigation renewed investor concerns about the independence of the Fed, which has long been insulated from the influence of elected officials.President Donald Trump on Sunday denied knowledge of the investigation. Gold prices surged to a record high Monday as investors turned to the traditional safe haven amid fresh concerns that the independence of the Federal Reserve could be jeopardized. The Justice Department on Friday threatened Fed Chair Jerome…

Key Takeaways AI-driven shopping experiences present new revenue opportunities for fintech companies, according to Oppenheimer’s fintech analysts.Mastercard and Visa are the analysts’ top large-cap picks. Artificial intelligence could soon transform online “window shopping.” That could bode well for some fintech stocks. As AI agents start to manage the shopping experience—from prompt to payment—within a single chat or app, Mastercard (MA) and Visa (V) are among the firms that stand to benefit, according to Wall Street analysts, with a leg up over companies like PayPal (PYPL), Stripe and Adyen. The opportunity in “agentic commerce” depends on stable consumer spending, which has…

Key Takeaways Adults who experienced adverse childhood events end up with a net wealth 44% to 77% less in their 50s and 60s, according to a recent study.Lower earnings, higher unemployment, and less stable marriages help explain why these early-life experiences can undermine long-term wealth and retirement security.Catch-up contributions, finding work that’s sustainable later in life, and delaying Social Security can help narrow the savings gap. Enduring childhood abuse or a parental divorce often has negative consequences for a person’s wealth later in life, says a recent report from the Center for Retirement Research (CRR) at Boston College. And that…

Key Takeaways A DOJ investigation involving Fed Chair Jerome Powell hasn’t changed expectations for the Fed’s next interest rate decision.Markets still put the odds of a rate cut at about 5% for the Fed’s Jan. 28 announcement, essentially unchanged since the news broke.Rate decisions are made by a committee following a set process, and there’s no sign that the probe will alter that path. What’s Happening With the DOJ Probe—And Why It’s Catching Attention The Justice Department (DOJ) has opened a criminal probe involving Federal Reserve Chair Jerome Powell, an unusual development arriving just weeks before the Fed’s next interest…

Key Takeaways Mortgage rates are back near their lowest level since fall 2024, offering buyers some relief after months of elevated borrowing costs.Trying to time a rate lock by waiting for signals, like Fed rate cuts, often backfires because mortgage rates don’t move on any single cue.For many buyers, locking in when you’re financially ready matters more than chasing the lowest rate. You can always refinance later. Mortgage Rates Have Dropped to Their Lowest Level Since Fall 2024 If you’ve been keeping an eye on mortgage rates, this week may have finally felt like a small break. After hovering at…

Key Takeaways Money market funds have been the most popular investment of the last couple years with total assets in them reaching a record $7.8 trillion as of early January. As inflation becomes less of an issue for the Federal Reserve, yields can move lower, Manulife John Hancock’s Roland said. Money market funds might offer less bang for your buck this year. Emily Roland, Manulife John Hancock Investment Management’s co-chief investment strategist, in a Monday interview with CNBC advised investors to “lock those yields in,” with the firm forecasting money market accounts’ returns to decline over the course of the…

(Image credit: Getty Images)Stocks opened lower Monday as news that the Department of Justice is investigating Federal Reserve Chair Jerome Powell shook market sentiment. However, the main equity indexes found their footing by lunchtime as participants turned their attention to this week’s key inflation data and the start of fourth-quarter earnings season.Late Friday, the Fed was issued subpoenas that threaten criminal indictment for Chair Powell over his testimony to the Senate Banking Committee last summer regarding renovations to the central bank’s buildings.In what is being called an “extraordinary” step, Powell released a video statement on Sunday night that calls the…

Key Takeaways Bank stocks fell Monday after President Donald Trump said over the weekend that credit card interest rates should be capped at 10% for at least a year.How a cap would be put in place and why for only a year remains unclear. A number of banking and financial stocks slumped Monday after President Donald Trump over the weekend suggested capping credit card interest rates. Trump posted on social media late Friday that Americans are being “ripped off” by interest rates of 20% to 30%, and said that effective Jan. 20 he would be calling for a one-year cap…