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In 2008, the Financial Sector brought the country to its knees with insufficient regulation, over-leveraged balance sheets, and predatory lending practices developed to take advantaged of Americans and our non-existent financial education system. The leverage imploded, billion-dollar firms were acquired or disappeared in the middle of the night, and Americans were charged with picking up the pieces and the tab. The country healed and out of the rubble grew the Consumer Financial Protection Bureau (CFPB) to ensure it never happened again. The CFPB’s mission is to empower consumers making financial decisions, take action against predatory companies breaking the law, and educate Americans on finance from childhood through retirement; help we desperately need!

2017 CFPB accomplishments include suing Navient Corp. and Citibank for systematic student loan failures that harmed borrowers, taking actions against Prospect Mortgage, LLC for illegal kickbacks on mortgage referrals, filing complaints against Corinthian College for predatory lending schemes, and suing Federal Debt Assistance Association, LLC for illegally posing as federal government debt-relief. A complete review of CFPB’s enforcement actions indicate it is successfully carrying out its mission objectives, which is why it is incomprehensible that Mick Mulvaney who called the bureau "a joke, in a sick, sad way” earlier this year and supported eliminating it was just named the Director. His appointment is a blatant attack on consumer financial protection and an indication that the 2008 Financial Crisis has been officially forgotten by politicians, and thus may be repeated.

A common metric to evaluate investments is the Price to Earnings Ratio (PE Ratio). Imagine buying a company that makes $10,000 a year for $100,000. The PE Ratio would be 10 because a price of $100,000 divided by earnings of $10,000 is 10. If an investor paid $200,000 for the same company, the PE Ratio would be 20 and the possibility for overpayment would have increased. On a historic basis, the stock market (S&P 500®) trades at 15 to 17 times earnings. The fact that the stock market now trades at 25.75 times earnings implies market optimism and an expectation that earnings will increase, corporate costs will decrease, future tax codes will be more favorable, or some combination of positive changes that supports the third highest PE Ratio in 157 years. So is the stock market overvalued? If you are concerned with this question you haven’t thought out your investing strategy enough, are too exposed to the stock market, or improperly hedged to weather the storm. Maybe the optimism is well-founded, maybe next year the market will be flat and earnings will catch up to the recent price appreciation, or maybe the market will revert back to 17 times earnings and drop 41.74%. In the end, a consistent investment strategy is more important than an opinion and building a portfolio with optionable investments gives you options.

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