US Consumer Price Index (CPI) Inflation – April 2010 Update

The above chart shows the US Consumer Price Index (CPI-U) to April 2010 courtesy of the US Bureau of Labor Statistics. Year on year the US CPI inflation index has risen from 213.24 to 218.009 which equates to 2.2% today (down from 2.3% last month). Annualising the last 6 months has inflation at 1.7% and annualising the last 3 months has inflation running at 2.4%.

UK Inflation – May 2010 Update

The Office for National Statistics has reported the April 2010 UK Consumer Price Index (CPI) as 3.7% up from 3.4% and the UK Retail Price Index (RPI) as 5.3% which is up from 4.4% last month. Regular readers of Retirement Investing Today will I’m sure not be surprised by this at all as the Bank of England have clearly positioned themselves to let inflation run.

A History of Severe Real S&P 500 Stock Bear Markets – May 2010 Update

Looking at the first chart which shows the real (inflation adjusted) S&P 500 (or its predecessor) stock market I have identified three historic severe stock bear markets. These I am defining as stock markets where from the stock market reaching a new high, they then proceeded to lose in excess of 60% of their real (inflation adjusted) value. These are best demonstrated by the second chart which shows each of these stock bear markets and the fall in percentage terms from the peak. So briefly what were these bear markets (full details here).

US (S&P 500) stock market including the cyclically adjusted price earnings ratio (PE10 or CAPE) – May 2010 Update

To try and squeeze some more performance out of a retirement investing strategy that is heavily focused on buy & hold and asset allocation I am using a Cyclically Adjusted Price / Average 10 Year Earnings (PE10 or CAPE) ratio for the S&P 500 to value the US (specifically the S&P 500) stock market. The method used is that developed by Yale Professor Robert Shiller however I also incorporate earnings estimates up to the PE10 month of interest. Background information here.

GDP per capita – BRIC vs PIGS vs UK, USA, Germany

We hear every day about the gross domestic product (or GDP) of countries. For example, it is always seen as negative if GDP is decreasing (by definition the UK enters a recession if there are 2 quarters of negative GDP) and positive if GDP is increasing. For the Average Joe on the street though I think GDP is not as important as GDP per capita which just doesn’t seem to ever discussed in the media or by government. For example:
- In an extreme I think if GDP started to fall but the population (through migration for example) fell at a faster rate then it is very possible that a person’s standard of living could actually be increasing. This is because the average persons GDP per capita would be increasing meaning that they should also be increasing their salary.

Australian Property Market (Alternate Data) – May 2010 House Price Update

The Brisbane and Australian Eight Cities (Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin & Canberra) House Price Index published by the Australian Bureau of Statistics (ABS) catalogue 6416.0 suits my requirement to track Australian house prices as part of my retirement investing strategy.  It however has a big flaw for me by only publishing the housing data quarterly.

Australia, UK, US and the PIGS (Portugal, Italy, Greece and Spain) government 10 year bond yields – May 2010 update

I continue to monitor the 10 year government bond yields of three countries (Australia, United Kingdom and the United States) to try and understand when interest rates on savings and mortgages may start to rise with my datasets shown in today’s chart. In addition with all the excitement that is occurring with the PIGS I have decided to also dedicate a monthly chart to ‘Club Med’ (Portugal, Italy, Greece and Spain) also.

UK Mortgage Rates and Mortgage Approvals – May 2010 Update

Today I present two regular charts that as with last month continue to give me little information on what could be occurring in the housing market. The first shows the monthly interest rate of UK resident banks and building societies sterling standard variable rate mortgage to households (not seasonally adjusted) and highlights that for this data set rates remain at near record lows at 4.04% for April 2010 (actual low was 3.82% in April 2009). Compare this with the retail price index (RPI) of 4.4% and the average mortgage is better than free money with a negative real interest rate.

Investing mistakes I’ve made – shorting the stock market

As I’ve travelled down my chosen road of taking full responsibility for my retirement investing strategy I’ve made plenty of mistakes that have cost me money (and I’m sure I’ll make plenty more). I’d therefore like to share some of these with you over the coming months. Previously I covered contango & exchange traded commodities (ETC’s) and today I’m going to cover shorting the stock market.

Proud member of the Yakezie Challenge

When I first started this blog 6 short months ago I did so for a couple of reasons. The first was to hold myself accountable. I set myself an investment strategy based on strategic asset allocation with a tactical asset allocation mixed in to try and squeeze some extra performance and I thought that by publishing the strategy along with regular updates that I would stick to the plan. Well so far it seems to be working however only time with tell if my retirement investing strategy was successful.

The Bank of England continues with their unpublished strategy – UK Bank Rate held at 0.5%

The Bank of England today held interest rates at 0.5% for the fifteenth month in a row and decided to do no more quantitative easing (QE) for now. Meanwhile in the real world the retail prices index (RPI) has risen from 3.7% to 4.4% and the measure supposedly followed by the Bank of England, the consumer prices index (CPI), has risen from 3.0% to 3.4%. The banks must be enjoying every minute of this. It gives them the chance to rebuild their balance sheets by borrowing short term at what are effectively negative interest rates. They also don’t seem to need savers so give us two fingers through low interest rates on our savings.