Halfway Between Double or Nothing

The official numbers aren't in yet but it looks like 2015 ended without a bang for US markets.  The S&P 500 managed somewhere around 1% total return and the Barclay's Aggregate ended up about .5% -- nothing worth getting excited over. Of course, across the globe and everywhere in between there were substantial divergences in … Continue reading Halfway Between Double or Nothing

Full Swing Voting

Following a choppy third quarter, global markets have made a comeback.   Since October 1, the S&P 500 and EAFE have both rebounded over 5%, and emerging markets have bounced by more than 8%. Strangely enough, the same fears that stoked the sell-off also seem to be fueling the rally.  Investors who disliked the uncertainty … Continue reading Full Swing Voting

Never a Wrong Time

Market volatility picked up significantly in August and US stocks have been teetering in and out of correction territory ever since.  Uncertainty is pervasive and investors' nerves are rattled.  At times like these, it's more important than ever to manage expectations and maintain appropriate expectations. A market correction is generally defined as a pullback of … Continue reading Never a Wrong Time

Mid-Year Summary

Despite a surprise slowdown of US economic growth in the first quarter, the stock market has continued to climb higher. The S&P 500 is up by over 7% year-to-date. US equity REITs have been especially strong, already returning more than 17% so far in 2014. Meanwhile, the benchmark 10 year US Treasury yield has fallen … Continue reading Mid-Year Summary

A Complicated Relationship

Many people talk about how interest rates can affect bond prices.    However, rates can also affect stock prices.  Here's a quick summary of the reasons behind that relationship Interest Expense: Interest rates represent an expense for any company that uses credit. As interest rates rise so do the costs of borrowing. All else equal, … Continue reading A Complicated Relationship

Hot or Not

Bonds continue to be unpopular among professional investors.  Over the past year, many well-known investors including John Paulson and Warren Buffet have expressed their preference for stocks over bonds. It's easy to understand why. The current 2.45% yield on a 30 year Treasury is not only historically low but is practically negative when adjusted for inflation.  At least stocks have the … Continue reading Hot or Not

Patient Trigger Finger

So what did the stock market think about S&P's downgrade?  We got an answer today, in bright flashing red.  The Dow sank 634 points today - the sixth largest single-day drop in history. To be fair, the sell-off wasn't rooted entirely in the downgrade (which was widely expected).  Rather, as I have written before, it looks like the market is … Continue reading Patient Trigger Finger

There’s a Forest Up There

Last week in San Francisco, the weather forecast was calling for a slight chance of showers north of the city, most likely around noon.  In the heart of the city, while grabbing my morning cup of coffee, I was getting drenched because I thought I wouldn't need an umbrella.  That got me thinking about "Navigate the Noise," a book by Richard Bernstein.  He wrote that people seem to pay … Continue reading There’s a Forest Up There