24 Mar 2015

Fund Manager Beats Market for 40 Years

The most recent issue of Bloomberg Markets magazine featured a photo of a stately gentleman with a blazing headline that read, ‘This Fund Manager Has Consistently Beaten the S&P 500 for 40 Years.’ The article highlights the performance of The Nicholas Fund (ticker: NICSX), a $3.6 billion mutual fund run by Albert Nicholas, who started the fund in 1969.  The article says that he has outperformed the S&P 500 by… Read More

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23 Mar 2015

The Fed’s New Drug of Choice

Even though I was out of town last week on vacation, I generally keep my ear to the ground for market news and last week that was especially true because the Fed was expected to move one step closer to raising interest rates. For at least a year, the Fed has maintained that they would be ‘patient’ about the timing of raising rates.  I assumed, like most people, that the… Read More

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13 Mar 2015

Women and Investing

Despite being married with two daughters, I am not an expert on women. For a long time, I couldn’t figure out why women might want or need different financial advice from advisors. A few years ago, Dannelle Ward set me straight and pointed out that women do face different financial circumstances that sometimes require different advice. Here are some statistics: • At birth, the life expectancy for women is 81.3… Read More

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12 Mar 2015

What Corporate Bond Yields are Telling Us

It should not come as a surprise to anyone that markets have performed very well over the past five years. The S&P 500 has earned 16.12 percent per year in the five years that ended in February. Few investors realize that corporate bonds have also done very well over the past five years. For the five years that ended in February, the Barclays US Corporate Bond index has earned 6.22… Read More

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11 Mar 2015

Currencies and Candy

The falling euro appears to be the primary culprit for yesterday’s market jitteriness and clearly seems headed for ‘parity’ with the US dollar, which means an exchange rate of 1:1 between the two currencies. The euro traded at 1.2 US dollars per euro at the beginning of the year and now trades at around 1.07 dollars per euro. Moving to a dollar per euro would represent a 20 percent decline… Read More

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10 Mar 2015

A Bear Market Strategy

When I was a senior in college, and just starting to take some finance classes, my professor expressed deep concerns about the stock market’s valuation at the time. Of course, at the time I had no idea what he was even talking about, let alone an opinion about whether he was right or not. Using my trusty Bloomberg terminal, I can see that the price-earnings (PE) ratio for the S&P… Read More

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9 Mar 2015

It’s Good News that Good News is Bad News

The Bureau of Labor Statistics (BLS) offered some good news regarding the employment situation on Friday. The economy added 295,000 new jobs in February, far better than the consensus expectations of 240,000 and the unemployment rate fell from 5.7 to 5.5 percent, a new low since the 2008 financial crisis and the peak unemployment rate since then of 10 percent in 2009. Part of the reason for the decline in… Read More

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6 Mar 2015

Another New Normal?

A few weeks ago, I wrote about negative interest yields on bonds as long as ten years in Europe. (Click here for a refresher) The main point that I was trying to deliver (other than that it’s a crazy mixed up world) was that we really can’t say where yields in the US are going with much confidence. While that’s not a new argument coming from me, the idea that… Read More

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5 Mar 2015

Vanguard Changes Course

I’m a big fan of Jack Bogle and Vanguard, so I was interested to see that Vanguard has made some fairly substantial changes to their Target Date Funds (TDFs). A TDF is a mutual fund that is designed for working people who know roughly when they will retire. For example, if I want to retire at 67 when my Social Security payments begin, I would buy a 2040 TDF. As… Read More

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4 Mar 2015

Another Internal Market Correction

A correction is defined as a 10 percent peak-to-trough decline and a bear market is defined as a 20 percent peak-to-trough decline. With those definitions in mind, it’s worth noting that the utilities sector entered correction territory yesterday after falling 10 percent from their highs at the end of January. Energy stocks are down more than 20 percent since their high last summer, and have been in bear market territory… Read More

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