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News From the Control Tower - 2/9/2023 Thumbnail

News From the Control Tower - 2/9/2023

News from the Control Tower: Our weekly curated list of news stories affecting you and your finances.

This week: a number of articles about getting your house in order.  –Amanda Vaught

The always insightful Mohamed El-Erian leads us off, highlighting the different approaches that global central banks are taking. The US approach is beginning to diverge from the rest of the world. The Wall Street Journal had a pair of articles this week on individual investors – one on how great Americans were who kept contributing to their 401(k)s during 2022, and another on the amateur investors who got burned during the market downturn. The takeaway? An automated system, like deposits to a 401(k) plan, combined with hurdles to withdrawals, can make a huge difference in investment outcomes.

We cannot warn people enough about financial fraud. There are no risk-free investments that will post consistently positive annual returns. The Washington Post covers the ins and outs of a massive Ponzi scheme that preyed on members of the LDS Church. The scheme destroyed countless lives.

One person in England, though, did strike it rich, when he found a royal treasure linked to Henry VIII while out on a walk with his metal detector. He says he plans to help his son get a better education. We cannot endorse this enough.

1.       The paradox of financial conditions

A gap has emerged between the US central bank and its peers at a time when its policy signals have become at odds with financial conditions.

2.       The Market Tanked, but Americans Kept Piling Money Into Their 401(k)s

Most investors kept up their savings rate last year and resisted trading their retirement funds, Vanguard data show.

3.       The Retreat of the Amateur Investors

A pandemic boom attracted scores of Americans seeking gains. Now that some are backing away, the markets risk losing a key support.

 4.       An alleged $500 million Ponzi scheme preyed on Mormons. It ended with FBI gunfire.

In Las Vegas, a lawyer with huge gambling debts is accused of a financial fraud that left hundreds of victims in its wake.

5.       Metal Detector Hobbyist Finds a 500-Year-Old Pendant Linked to Henry VIII

Researchers say the jewelry, found in a field outside Birmingham, England, is an extraordinary piece of treasure.