The S&P 500 has endured a tough performance run since Liberation Day on April 2nd, falling -5.4 percent. It was worse last week, down -12.0 percent (not including the intra-day lows), but recovered more than half of the losses. Less well known but still covered in the financial press is that bonds are having a hard time, too. Since Liberation Day, the Bloomberg Aggregate bond index has fallen by -1.9… Read More
When we meet with clients to create or review a financial plan, there’s a section where we try to get a sense of risk tolerance. We’ll show an asset allocation and its long-term expected return, and then, in big red numbers, what this portfolio would have lost in the 2008 financial crisis. We show it in percentage and dollar terms, based on the portfolio size at that time. The idea… Read More
I listen to a lot of investment podcasts, and one of the ones I enjoy the most is Trillions, produced by Bloomberg. It stars two journalists, Joel Weber and Eric Balchunas (pronounced bal-chew-ness, as best I can tell), and a few other rotating cast members. I enjoy listening because the hosts are Generation Xers (like myself), who are funny and down to earth. They feel like friends who talk in… Read More
Last week, we received inquiries about our “55 Stocks Elite Community” and the “Event Driven Magic Seven.” Of course, we don’t have an elite community or magic anything. It was a scam, and we were being impersonated online. Someone posted market commentaries on WhatsApp, including my photo and others from Acropolis. These scams use well-known investors like Ray Dalio, Bill Ackman, and Cliff Asness. While I would typically be proud… Read More
There have been recent incidents of individuals and groups falsely claiming to be associated with Acropolis Investment Management, LLC. (ACR) on social media platforms. These imposters have engaged in a variety of unauthorized conduct, including soliciting customers to carry out trading activities with them, impersonating ACR using the genuine names of ACR senior executives or employees to offer investment opportunities, claiming to offer investment training courses that are supposedly provided… Read More
As noted above, the University of Michigan Consumer Sentiment index received much attention last week. The index is a monthly survey of at least 500 US households, who are asked about their current financial situation, economic expectations, and attitudes toward purchasing major household items. The consensus estimate for February was a reading of 63, which would have been a little lower than the January reading of 64.7. When the actual… Read More
The headlines have been volatile lately, leading to anxious calls from clients wondering if they should take action based on what they think might happen. If you want to make some changes at the margin, that’s probably okay, but a wholesale change at this moment probably says more about your political views than an unbiased investment outlook. When we set an asset allocation policy with clients, it’s usually in the… Read More
A longtime friend and reader asked me to explain how tariffs work. Of course, it’s a politically charged topic, but a simple description of how they function should be apolitical and straightforward enough. I will start with a made-up product, Wakanda’s Widgets, which are imported to the US. My made-up supply chain has three players: the manufacturer in Wakanda, a US importer that also acts as a distributor and the end retailer… Read More
Last week, I said that I would broadly explain hedge funds, but I was distracted by their high costs. I promise to stay on point today. Hedge funds are pooled investment funds that are less regulated than other types of pooled vehicles like mutual funds and ETFs. They are less regulated because their clients are wealthier, which presumes them to be more sophisticated (I’m not sure that’s true, but that’s… Read More
A few weeks ago, someone told me we’re halfway through the 2020s. I was caught off guard, but they were right. They went on to say that this 1920s is looking even better than the last round 100 years ago, so naturally, I went to the data. The chart below shows the growth of $1 invested in large-cap stocks 100 years ago (in green) and this century (in yellow). Somewhat… Read More
