18
Nov
2015
What Retirees (and Pre-Retirees) Worry About
One of the interesting (but less than encouraging) data points in the inflation data is that medical care service costs increased 3.0 percent in the 12 months ending in October while core inflation was 1.9 percent (core inflation excludes volatile food and energy costs). Everyone at Acropolis knows that retirees and pre-retirees worry a lot about healthcare costs. A recent UBS study of 1,849 high net worth individuals with an… Read More
17
Nov
2015
A Big Bet on Emerging Markets
For most of last week, I was in Boston at Schwab’s IMPACT conference – my fourteenth pilgrimage that includes prominent speakers, workshops and a football field size area of vendors pitching everything under the financial services sun. This year featured more academics than usual, which I found particularly engaging. One of the sessions was actually a debate between academic Roger Ibbotson (who also manages some money) and Rob Arnott, a… Read More
16
Nov
2015
We Stand with France
Like the rest of the world, we are all shocked and saddened by the horrific terrorist attacks in France. I’m reminded of my first days with Acropolis, although technically, we were everTrade Advisors back then. My first official act was to write a letter to clients in the days following 9/11. I don’t think I had been on the job more than a week or two when it happened. There wasn’t… Read More
12
Nov
2015
Navigating Bond Market Holidays
Yesterday was Veterans Day. A Federal holiday in the US where we honor those who have served in our country’s military during wartime and peacetime. But it also makes for something a bit strange in the financial markets. If Veterans Day falls on a weekday, the stock market is open while the bond market is closed. Because we are sensitive to transaction costs and realizing capital gains in our client’s… Read More
10
Nov
2015
When Hedge Funds Come and Play
One of the ongoing fall soap operas in Wall Street right now concerns Valeant Pharmaceuticals (ticker symbol: VRX), which develops and manufactures a range of specialty generic and branded drugs. The stock had been one of the darlings of Wall Street after it had risen from around $35 per share in 2010 to over $260 per share in August. Yesterday, the stock closed at $85 per share, a decline of… Read More
9
Nov
2015
Jobs Report Gives Fed Ammunition
All markets were driven Friday by the Labor Department report which showed that US employers added jobs in October at the fasted past so far this year while wages rose at the fastest rate since 2009. Nonfarm payrolls rose by a seasonally adjusted rate of 271,000 last month and revisions for August and September added 12,000 more jobs than previously estimated, bringing the monthly average of 206,000. The newly created jobs… Read More
6
Nov
2015
New Data Helps Planning for College
It seems like it was only yesterday that I was pouring over US News & World Report magazines and the Princeton Review book ‘best colleges.’ Of course, it’s obvious that it was a while ago because I’m referring to magazines and books. Today, everything you need is online. In fact, the volume and quality of the data just got a little better in my opinion thanks to the new College… Read More
5
Nov
2015
Interest Rates May Head Higher
Yellen’s comments yesterday definitely had an impact on the markets view of what could happen to interest rates in December. The chart below shows what markets think are the odds of a rate hike at the December meeting since the beginning of the year. You can see that at the beginning of the year, markets thought that the odds of a hike were not particularly high, ranging from 20 to… Read More
3
Nov
2015
Value Stocks Don’t Party Like it’s 1999
I haven’t seen or read much about it, but this is a very tough time for value investors. In fact, to my surprise, it hasn’t been this bad for value investors since the late 1990s tech bubble. Although you can find the same thing if you look at commercial indexes from companies like S&P, Russell and MSCI, the following data from academic Ken French tells the whole story. While useful,… Read More
2
Nov
2015
Rocktober in Three Charts
The teacher from The Simpsons would have you believe that there is no such month as Rocktober, but looking at the returns from last month, I have to disagree! Stocks have recovered all of their losses from the August/September correction, are now positive for the year and within a few percent of the all time highs set in May. You can see that the nervousness that struck markets sharply in… Read More