3 Things 8-4-25

 Thing One

For Or Against Investing In Stocks In 2025?

(The following are exerpts from an article on yahoofinance.com about investing in stocks in today's market enviroment)

“…For: Strong Economic Growth Supports StocksThe U.S. economy is expected to grow steadily in 2025, with forecasts around 2% GDP growth, driven by consumer spending and corporate earnings. Strong earnings, especially in tech (projected to grow 15% for S&P 500 companies), can justify high P/E ratios if companies keep delivering profits. For example, a company with a high P/E might be worth it if its earnings growth rate is high and seems durable.  It’s like buying an expensive phone that lasts longer. This growth potential makes stocks attractive, especially in sectors like technology or consumer discretionary, where companies are reinvesting for future gains.

For: Policy Changes Could Boost MarketsExpected policy shifts, like lower corporate taxes or deregulation under the current administration, could increase company profits, supporting stock prices. Lower taxes mean companies keep more money, which can boost earnings and make high P/E ratios more reasonable. Think of it like a store cutting prices after getting a tax break—it attracts more buyers. Additionally, anticipated Federal Reserve rate cuts this fall could keep borrowing cheap, encouraging business expansion and stock market rallies. These tailwinds suggest that stocks could continue to climb, even if they seem pricey now.

For: Long-Term Investing Beats Timing the MarketHigh P/E ratios don’t always predict crashes. Historically, markets with elevated valuations can still rise if fundamentals like earnings growth remain strong. Trying to wait for a “perfect” entry point is risky—you might miss gains. For instance, the S&P 500 has delivered positive returns in most bull market third years, despite high valuations. Investing small amounts regularly, like $100 a month, can reduce risk and build wealth over time, making today’s high P/E less concerning for long-term investors.

Against: High P/E Ratios Signal OvervaluationHigh P/E ratios, like the S&P 500’s current one at 25, suggest stocks are overpriced, meaning you’re paying a lot for each dollar of earnings. If earnings don’t grow as expected, stock prices could drop, like buying a fancy car that breaks down soon after. The Shiller P/E ratio, which smooths earnings over 10 years, is also high, hinting at lower future returns (around 1.5% annually for the next decade). This makes stocks riskier, especially for short-term investors.

Against: Tariff and Inflation RisksNew tariffs in 2025 could raise costs for companies, especially in sectors like manufacturing or logistics, squeezing profits and lowering stock prices. Imagine a grocery store raising prices due to import taxes—you’d buy less. Inflation, projected at 2.66%, could also push the Federal Reserve to keep interest rates high (around 4.25-4.5%), making borrowing costlier and slowing growth. These factors could trigger market volatility, making high P/E stocks vulnerable to sharp declines.

Against: Geopolitical and Policy UncertaintyGlobal tensions, like the Israel-Iran conflict or U.S.-China trade disputes, add uncertainty to markets. Sudden policy changes, such as aggressive tariffs or Federal Reserve shifts, could spook investors, causing sell-offs. It’s like planning a picnic but canceling due to a sudden storm. With stocks already expensive, these risks could lead to a correction, where prices drop 10% or more, hitting investors who buy at today’s high valuations.

Conclusion: Balance Risk and OpportunityWhile high P/E ratios, tariff risks, and geopolitical uncertainty suggest caution, investing in in the stock market today offers potential rewards to investors willing to accept those risks. Strong growth and policy tailwinds support buying stocks, especially for long-term investors who can ride out volatility…”

Surprise, surprise.  If you’re in it for the long term, investing is stocks is still a good idea.

Thing Two  

Shopped Your Car Insurance Lately?

If you haven't looked around lately to see if you're gettign the best deal on your car insurance, as we've suggested often, perhaps the following analysis of the current top three by price will inspire you to take a look.

"..The three least expensive car insurance carriers in the United States in 2025, based on average premiums, are GEICO, State Farm, and Auto-Owners. These insurers consistently provide competitive rates across various driver profiles, making them top choices for budget-conscious consumers. This summary draws from 2025 analyses by sources like MoneyGeek, Bankrate, and NerdWallet, which evaluate average premiums, customer satisfaction, and financial stability. Their affordability stems from robust discount programs, streamlined operations, and tailored coverage options. However, a key caveat applies: the low rates often reflect liability-only policies, which provide minimal coverage and may not meet the needs of drivers requiring comprehensive or collision protection, potentially leading to higher out-of-pocket costs in accidents.

GEICO is renowned for its affordability, particularly for liability-only policies, with average minimum coverage premiums around $43 per month, well below the national average of $807 annually for such policies, according to MoneyGeek’s 2025 data. It remains competitive even for high-risk drivers, offering rates as low as $80 per month for those with a recent ticket. GEICO’s digital-first approach, with an efficient online quoting system and discounts for vehicle safety features, good students, and defensive driving, enhances its cost-effectiveness. However, liability-only policies exclude coverage for the policyholder’s vehicle damage, which could be a significant drawback for drivers with newer or high-value cars. Additionally, GEICO lacks certain add-ons like gap insurance or rideshare coverage, limiting its appeal for some.

State Farm ranks among the cheapest, with an average full coverage premium of $134 per month, though its liability-only policies are notably affordable, per ValuePenguin’s 2025 findings. With over 19,000 agents nationwide, State Farm excels for drivers who value personalized service alongside low costs. It offers discounts like the Steer Clear® program for drivers under 25 and up to 25% off for good students, making it ideal for families with teens. State Farm’s high J.D. Power customer satisfaction scores and 2025 Bankrate Award for Best Auto Insurance Company for Safe Drivers highlight its reliability. However, liability-only policies may leave drivers vulnerable to repair costs for their own vehicles, and State Farm’s rates can increase significantly for high-risk profiles.

Auto-Owners offers the lowest average premiums for liability-only coverage among major carriers, particularly for drivers with clean records, according to Bankrate’s 2025 analysis. Operating in 26 states, it provides competitive rates for various driver types, including high-risk ones, and includes add-ons like accident forgiveness and gap insurance. Discounts for bundling, on-time payments, and safety features can reduce premiums by up to 20%. Auto-Owners also boasts strong J.D. Power satisfaction scores and an A+ (Superior) AM Best rating for financial stability. The caveat with its low-cost liability-only policies is their lack of coverage for personal vehicle damage, which may not suit drivers needing broader protection. Its limited geographic reach also restricts availability.

While GEICO, State Farm, and Auto-Owners offer some of the lowest average rates, individual premiums depend on factors like location, driving history, credit score, and vehicle type. Liability-only policies, while cheaper, cover only damages to others, leaving policyholders responsible for their own repair or replacement costs. Drivers should weigh this limitation against their needs and budget, potentially opting for full coverage if they own valuable vehicles. Comparing quotes and leveraging discounts—such as bundling policies or using telematics programs—can further lower costs. GEICO suits tech-savvy drivers, State Farm is ideal for those seeking agent support, and Auto-Owners is a strong choice in its service areas for robust yet affordable coverage..."

Thing Three

Just A Thought  

""Time will multiply whatever you feed it.

Good habits make time your ally. Bad habits make time your enemy."" - James Clear