Past investment performance is no measure of future returns

Article Abstract:

Investment performances should not be projected based on past performance because of the inconsistent influence of market inefficiencies. However, in general, stock market returns should be higher than fixed, low-risk investments over the long term because much of the fluctuations even out. Projections stating 10% stock returns are likely to be valid even though interest rate drops and other factors have damaged the market because technological innovation combined with low capital gains taxes are likely to stimulate the stock market.

Commercial Banks, Investment Banking and Securities Dealing, Portfolio & Funds Management, Methods, United States, Financial planning, Portfolio management, Stock price forecasting

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No nation is an island

Article Abstract:

The Clinton administration should avoid protectionist trade policies with the exception of new industries and anti-dumping laws because protectionism damages US competitiveness on the international markets. Short-term government subsidies for new industries or to matching unfair subsidies in other countries should be used carefully while extreme government intervention in business should be avoided. Government protection of one industry can cause job losses in another related industry while price protection increases consumer costs.

Analysis, Economic aspects, Industry regulations, International competition (Commerce), International competition (Economics), Government regulation of business, Trade regulation, Free trade

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The political business cycle

Article Abstract:

Political incumbents use their power to artificially stimulate the economy in election years at the expense of the future. This political economic cycle is evident in the 1992 election year and President Bush's economic stimulus plan. Bush proposes tax credits for home buying that will cause purchases to be made in 1992-93 that would have been made anyway in 1993 or later, taking the money away from those years. These types of economic stimuli will only cause higher interest rates and inflation in 1993.

Economic policy, Political aspects, United States economic conditions, Politicians, Business cycles

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