From agrarian economy to global superpower in half a century—China’s transformation has been an economic success story unlike any other.
Today, China is the world’s second-largest economy, making up 16% of $86 trillion global GDP in nominal terms. If you adjust numbers for purchasing power parity (PPP), the Chinese economy has already been the world’s largest since 2014.
The upward trajectory over the last 70 years has been filled with watershed moments, strategic directives, and shocking tragedies — and all of this can be traced back to the founding of the People’s Republic of China (PRC) on October 1st, 1949.
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Benjamin Franklin famously observed, “The only two things you can count on in life are death and taxes.” To which an unknown wag offered the sardonic and almost equally famous rejoinder, “That may be true, but at least death doesn’t get worse every time Congress reconvenes.”
Let’s start by belaboring the obvious and note that high taxation makes it challenging to create and accumulate wealth. Sure, everyone should contribute a fair amount toward the functions of government, but even most patriotic Americans could feel just as patriotic while paying a whole lot less. Unfortunately, it is generally difficult to escape the long reach of the (tax) law; fortunately, however, there is one specific tax-reduction tool widely available to all U.S. taxpayers, namely, the Roth IRA and its kissing cousin, the Roth 401(k).
The sales pitch for a Roth IRA is compelling: Money is contributed to the account on an after-tax basis, meaning that people do not get a current income-tax deduction for the contribution. But once the money is invested, it can go into almost any investment activity you please (subject to the limitations imposed by the custodian of the account), and all income earned from those investment activities—whether interest, dividends, or capital gain—is excluded from current federal income tax (and typically state income tax) at both the IRA level and at the taxpayer level. Moreover, when it comes time to distribute funds from the Roth IRA in the future, these distributions are likewise fully exempt from federal (and usually state) income taxation. Thus, the Roth IRA allows taxpayers to enjoy a tax-free investment that earns a full market rate of return. All in all, a very sweet deal.
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After nearly a decade of outperformance for growth stocks, fueled by low inflation and near-zero interest rates, value stocks staged a comeback in 2022, outperforming by 20%.
Nearly halfway through 2023, growth leads value by more than 15% with the tech-heavy Nasdaq Stock Market up nearly 20%.
Why should investors maintain and possibly increase exposure to value?
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Harry M. Markowitz, an economist who launched a revolution in finance, upending traditional thinking about buying stocks and earning the Nobel in economic science in 1990 for his breakthrough, died on Thursday in San Diego. He was 95.
The death, at a hospital, was caused by pneumonia and sepsis, MaryMcDonald, a longtime assistant to Dr. Markowitz, said.
Until Dr. Markowitz came along, the investment world assumed that the best stock-market strategy was simply to choose the shares of a group of companies that were thought to have the best prospects.
But in 1952, he published his dissertation, “Portfolio Selection,” which overturned this common sense approach with what became known as modern portfolio theory, widely referred to as M.P.T.
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