The Swiss National Bank (SNB) revaluation of the Swiss franc caused me to look at The Economist magazine’s ‘Burgernomics’ website (which can be found here). While it may not be popular with high minded economists, the Burgernomics site attempts to put a fundamental value on currencies from around the world by looking at the cost of buying a Big Mac in each country. In theory, a Big Mac ought to… Read More
It seems like only yesterday that the tax issues were finally settled after years of uncertainty, although it was actually 2012. Judging from the President’s State of the Union address last night, it appears that taxes may be in flux again. First, a quick and dirty background on the estate tax law as it stands today. For those that pass away in 2015, there is no federal estate tax unless… Read More
Over the summer, the California Public Employees Retirement System (CalPERS) announced that it was eliminating its exposure to hedge funds. CalPERs is making headlines again by saying that they are going to substantially cut their exposure to private equity, the other major strategy that falls under the ‘alternative investment’ umbrella. I’ve made the case for a decade that we can do almost anything a very large institution can do on… Read More
In September 2011, Switzerland’s central bank, the Swiss National Bank (SNB) decided that it didn’t want the Swiss franc to become too valuable against the Eurozone common currency, the euro. For better or for worse, the Swiss franc has been considered a safe haven and during the sovereign debt crisis a few years ago, money poured into the franc. That was a concern for the SNB since it could have… Read More
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. This issue is particularly exciting because it features an entirely new look and feel for the same great content that we’ve been creating for the last dozen years. Table of Contents: Evaluating Global Stock Exposure Predicting Interest Rates Review of 2014 The Allure of Market Timing New at Acropolis Six Financial Planning Myths The US Dollar… Read More
As recently as Christmas Eve, the market believed that there was a 92.4 percent chance that the Federal Reserve would raise interest rates in 2015. The probability is based on prices for Federal Funds futures price contracts at the Chicago Board of Trade (CBOT). In the first few weeks of this year, I started hearing market chatter that the Fed may have to push off raising interest rates until 2015… Read More
Last year, the Barclays Aggregate bond index (the Agg) gained 5.97 percent. Overall, our bond portfolios earned less than that – not a lot less, but less (it varies among clients, so I will be intentionally vague here). Also, while our returns were less on a relative basis, we are happy with the absolute number – mid-single digit returns are not too shabby for bond investors in the current interest… Read More
Which sector returns were better last year, healthcare stocks or utilities? There’s no question that both had great years, up 25.26 and 28.94 percent respectively, compared to 13.66 percent for the S&P 500. The question, though, asks which is better, and I think the answer depends a little on what you care about. If the answer is straight performance, then clearly, utilities won by 3.68 percentage points. The following chart… Read More
The Bureau of Labor Statistics (BLS) reported Friday that the labor market improved in December and for 2014 as a whole. In December, payrolls increased by 252,000 and over the course of the year, 2.95 million new jobs were created, the most added in a single year since 1999. The newly created jobs were one of the key elements in the falling unemployment rate, which started the year at 6.7… Read More
In my judgment, the biggest stories of 2014 were falling interest rates and oil prices. I’ve written that most people expected interest rates to rise and no one expected a major drop in oil prices. The combination of those two things, plus the unexpected rise in the U.S. dollar (a big story, but not as big as the first two) means that inflation expectations have fallen dramatically in the U.S…. Read More
