One of the immediately obvious results of the election is that the tax code is going to change. Republicans have had several plans in the works for years that differ from what Trump has proposed on the trail, so the final result won’t be known for a little bit even though changes are a priority for the President-elect and both houses of Congress. Income Taxes For the sake of simplicity,… Read More
It’s not a stretch to say that 2016 has been full of surprises! One of the big surprises from our perspective up until the election was the decline in interest rates and corresponding strong return that bonds delivered. I wrote about the surprising decline in yields as early as February and was going a little bananas as yields throughout the world went negative (here, here and here). We never went… Read More
At this point, my view is that most of the market activity since the election can really be broken down into two distinct categories. The first category are stock sectors that clearly stand to win or lose from expected changes in government policy. The most obvious winner is bank stocks, which will benefit from lighter regulation. The big loser is hospital stocks that will lose Obamacare related revenue. The second… Read More
One of the interesting elements of yesterday’s trading was that small cap stocks continued to pop, jumping 1.59 percent. I don’t have a particular explanation for this movement, but it’s significant enough that I think it’s worth mentioning and it’s an example of positive volatility. Too often we think of volatility to the downside, but the movement in small cap stocks in the past few days is a good reminder… Read More
Most people probably caught the wild swings in the Dow and S&P 500, from a five percent drop in futures trading overnight to a 1.1 percent higher close, with most of the action in the 30 minutes before the market opened. Small cap stocks, which gained 3.1 percent during the trading session are particularly interesting because their relative performance to large cap stocks can be viewed as a signal of… Read More
Just as markets were surprised when British voters elected to leave the European Union, markets wrongly expected Clinton to win last night. When it first became apparent that Trump had a credible path to victory around 10:30 pm CST last night, markets turned negative with futures on the Dow Jones showing a decline of -750 points. In addition to falling stock prices, bond prices rose sharply, with the yield on… Read More
When I describe ‘balance’ in a portfolio, here or in person, I am almost inevitably talking about an allocation that is somewhat evenly split between stocks and bonds. I don’t have to specify that I am talking about how much money is in each allocation (forgetting for a moment all of the sub allocations). In recent years, however, some investment managers have pointed out that a portfolio that is evenly… Read More
One of the more popular categories of mutual funds over the past few years have been so-called ‘alternative’ funds. Alternative investments, broadly defined, are strategies that seek returns that are uncorrelated from traditional investments like stocks and bonds. While alternative investments were once largely confined to private partnerships, they are now popular in mutual funds, or what the industry refers to as ’40 Act Funds. Following the 2008 financial crisis, alternative… Read More
Warren Buffett is rightly considered the most successful investor of all-time. Not only has his holding company, Berkshire Hathaway, grown at a much higher rate than the overall market, he’s managed to earn exceptional returns for much longer than others who have also earned high returns. I was only able to pull data from 1987, but the last 29 years have been extraordinary for Buffett and his fellow shareholders. Over this… 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 Bulls, Bears, Donkeys & Elephants The Big Picture and Fast Facts Click here to read the issue: 2016 Q3 Portfolio Insights
