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

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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

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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

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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

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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

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30 Oct 2015

New Budget Curtails Social Security Maximization Strategies

It was announced on Tuesday that the House of Representatives passed a budget deal that is expected to move through the Senate largely unchanged and make it to the President’s desk in time to avoid a fiscal crisis and a possible government shut down. Although that’s news unto itself, I was interested to see that this budget clamps down on two of the most popular Social Security maximizing strategies in… Read More

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29 Oct 2015

Fed Wake Up Call: December is on the Table

While the Fed kept interest rates at zero as expected, they did send two notable signals for investors to think about. First, they removed the language that first appeared in the last statement, which said that ‘recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.’ While they said that they will be monitoring global… Read More

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27 Oct 2015

Efficient Markets: Fact and Fiction

For almost 50 years, one of the most controversial ideas in finance is that markets are efficient as presented by Gene Fama’s Efficient Market Hypothesis (EMH) in 1966. Let’s start with a simple definition of EMH: Current market prices incorporate all available information and expectations and are the best approximation of intrinsic value. In some ways, it’s such a simple statement that it’s a little surprising that it’s so controversial…. Read More

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26 Oct 2015

Jack Bogle Doesn’t ‘Do” International Investing

Jack Bogle, the founder of Vanguard, is one of my heroes.  Earlier this year, there was a petition to award him the Presidential Medal of Freedom (that I asked you to sign) and he wasn’t even close to getting enough signatures for the President to consider the petition.  I was both surprised and disappointed. I’ve read several of his books and whenever I see him interviewed, I pay attention.  A… Read More

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22 Oct 2015

Profits Are Falling (Again)

Someone once told me that the price of a stock should only change four times per year – when investors receive new financial information about the business in the form of an earnings release. Obviously, it doesn’t work like that, but it’s an interesting idea. In any case, earnings season is upon us and based on the third quarter data so far from FactSet, it doesn’t look pretty.  While only… Read More

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