The late Thanksgiving and my usual Christmas-denial meant that I was surprised to see that this is effectively the last Insight for the year. Yes, I could send one on Christmas Eve and another on New Year’s Eve eve, but returns have been so good this year, that I thought we could all take a break and enjoy the holidays. Before I go, however, I thought I would show what… Read More
A year ago, the consensus was that the US economy would likely enter a recession within a year. The yield curve was inverted, the index of leading economic indicators was in the tank, and it wasn’t clear when the Fed would start cutting rates. I often look at Bloomberg’s survey of economists, which asks the probability of a recession in the next year. It’s an imperfect measure, but economists should… Read More
Last week, I talked to a client who said something like, “My bonds aren’t doing well because yields are going up, but the Fed just cut rates. I don’t understand.” I can understand, and the answer is that the industry is lazy when discussing yields and rates. Let’s start at the beginning, though. The first part of the statement states that bonds aren’t doing well because the yields are going… Read More
In June, I wrote that the S&P 500 had become a growth index by Morningstar’s definition (you can refresh your memory here). I like Morningstar, especially its stock analysis, but it confuses investors by oversimplifying complex topics. While that is a laudable goal (and I try to do the same thing), they go too far. Well, Morningstar saw the problem that the investment community could see and changed their rules!… Read More
Over the last ten years, the oldest technology ETF I could find, the Select Spider Tech fund (ticker symbol XLK), has made more than 20 percent per annum through September 30th. A $10,000 investment in that fund would have been worth $64,172 at the end of last month. Even though I know better than to drive forward while looking out through the rearview mirror, I can’t help it: I want… Read More
Like many industries, the wealth management business has many rules and regulations. Many of the rules make good sense and were created after real-world problems occurred. I have one rule on my mind this week, and it concerns one of the ways that we communicate with you: texting. Acropolis is regulated by the Securities and Exchange Commission (SEC), and one of its rules concerns maintaining our books and records. At… Read More
An Arizona State professor, Hendrik Bessembinder, wrote a fascinating paper detailing something that we intuitively sense: a small handful of stocks have created almost all of the wealth over time, and most stocks don’t provide much in the way of returns. It’s one of the reasons we want hot tips (even when we know they aren’t likely to be hot). The paper’s provocative title is “Do stocks outperform Treasury bills?”… Read More
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: Stock Market Summary Bond Market Review Big Tech vs. The World Inside the Economy Optimization Overload The Big Picture Click here to read the issue: 3Q 2024 Portfolio Insights
People started asking me about a year ago what the election would do to stock prices. I didn’t know then, and I still don’t. Over the years, I’ve read many articles describing how markets fare under Democratic and Republican administrations. I’ve also done the research myself and written several of those articles. Last year, I even wrote about what happened in the year leading up to the presidential election because… Read More
When we launched Acropolis over 22 years ago, I thought understanding optimizations would be the key to our success. If we could just figure out “the” optimal allocation, we would be well ahead of everyone else. Of course, that’s true, but figuring out “the” optimal allocation wasn’t possible because you can’t tell in advance. My memory (which could be better) is that the software package we used then suggested a… Read More
