31 Jul 2015

Acropolis Dodged a Bullet

One of the hottest trends in investing over the past five to ten years has been investing in master limited partnerships (MLPs). As the name states, an MLP is a limited partnership that is somehow engaged in the natural resources business.  MLPs engage in the exploration and development (upstream), processing and transportation (midstream) and distribution and marketing to end consumers (downstream) of products like timber, coal, minerals, oil natural gas… Read More

30 Jul 2015

Get Out Your Smelling Salts: The Fed Speaks

As expected, the Federal Reserve Open Market Committee (FOMC) left short-term interest rates unchanged yesterday. Their statement yesterday along with other comments from Fed officials imply that the Fed is on course to raise rates later this year, citing solid job gains and lower unemployment. Specifically, the statement yesterday added the word ‘some’ to a key phrase: ‘The Committee anticipates that it will be appropriate to raise the target range… Read More

29 Jul 2015

When the Index is Wrong

When you buy an index fund, it’s natural to expect that your fund will earn basically the same return as the index. In a perfect world, you should expect an index fund to earn the index returns minus the cost of the index fund.  If an index fund charges 0.1 percent annually and an index earns 10 percent, you should expect to earn 9.9 percent. There are other reasons why… Read More

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28 Jul 2015

Bear Markets in Oil and Energy

Oil entered another bear market after falling approximately 21 percent from the recent high in May, although you can see that the current bear market for oil is nothing like the one that occurred at the end of last year. The rout in Chinse stocks is partly to blame because China is the world’s largest oil importer and second largest oil consuming country and an economic slowdown would further cut… Read More

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27 Jul 2015

Diversification in Today’s Market

One of the bedrock ideas behind Modern Portfolio Theory (MPT) is that diversification lowers risk. A simple view of that concept is that a portfolio of many stocks is less risky than a portfolio that contains one stock because the impact of a failure like Lehman Brothers or Enron won’t blow apart your whole portfolio.  Of course, all stocks can go down substantially, like they did in 2008, so diversification… Read More

15 Jul 2015

Portfolio Insights

We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: Protect Yourself From Fraud Inside the Economy Stock Market Summary Maximizing Social Security Is Janet Yellen Bluffing? Click here to read this issue: 2015 Q2 Portfolio Insights

8 Jul 2015

When Bubbles Burst: China Edition

While Greece is getting all of the headlines, the bubble in mainland Chinese stocks that I wrote about in April and June is now bursting (click here or here for refreshers).  The Shenzhen index is down -38.5 percent from its peak on June 12th through yesterday and the Shanghai index is down -27.9 percent over the same time period. The following shows these two indexes in yellow and orange compared to the S&P 500 in blue… Read More

7 Jul 2015

How Investors See the Greek Problem in Two Charts

While I’m dying to take a break from the ongoing financial crisis in Greece, I also want to show how the calamity isn’t destabilizing markets so far. Importantly, US stocks barely budged yesterday in response to the news, although stocks overseas didn’t fare as well.  The FTSE Developed Markets ex North America index fell by -1.61 percent while the FTSE Emerging Markets Index dropped -1.98 percent. While prices tell us… Read More

6 Jul 2015

Greece to Creditors: Heck NO

In what could easily be described as one of the highest stakes showdowns in the world today, the Greek people resoundingly voted ‘no’ to accepting conditions set by their creditors for a third bailout.   More than 60 percent of Greek voters rejected terms for additional aid set forth by what is colloquially known as the ‘Troika,’ a triumvirate made up of the European Central Bank (ECB), the International Monetary… Read More

2 Jul 2015

Doing Well by Doing Good

The end of the second quarter is always a relief for me because for the past six years, it has meant that we are finally through getting our CEFEX certification. As you probably already know, we serve our clients in a fiduciary capacity, which means that we are required to act in the best interest of our clients.  You may think that everyone in the financial services industry has to… Read More