Turkey: Contained or Contagion?
Market risks often come from the most unexpected places. Last week, a possible economic meltdown in Turkey rattled global markets. I wouldn’t have guessed that as recently as a week ago, and while I still think that Turkey won’t affect US markets too much more than they did Friday, I also wouldn’t have thought that problems in Greece would have created an existential crisis for the euro. I am not… Read More
More Tax Cuts to Come?
There’s apparently plan floating around Washington that would dramatically change capital gains taxes, in my opinion, for the better. I try to be impartial about political matters (not always successfully, according to some readers), so for now, I want to leave aside the debates about whether the plan only benefits the rich, inappropriately adds to the deficit or whether it should be an act of Congress or a rule change… Read More
Trade Wars and Interest Rates
Every day brings another headline (or Presidential tweet) about escalating trade tensions between the US and the rest of the world. What impact could these tariffs have on the bond market? The most popular narrative is that prices may increase due to tariffs being passed through to US consumers. Higher inflation should lead to higher long-term rates and the potential of a more hawkish Fed. This “cost-push” view of inflation… Read More
Whither Value? Ask Warren Buffett
I feel as though I’ve written this article a few too many times: value investing is struggling. Pioneered by Warren Buffett’s mentor Benjamin Graham, value investing is the method of buying stocks inexpensively, with the hope that the current problems that’s causing the cheapness pass, and the stock will rebound sharply. Decades into Buffett’s illustrious career, finance academics found that the process of buying cheap stocks led to higher than… Read More
What’s Your China Exposure Amid the Trade Skirmish?
One of the interesting things about the current trade skirmish (I’m not willing to call it a war yet), is that we are fighting on multiple fronts. Even though we have tariffs on aluminum and steel from Canada, Mexico, and the European Union, we all know that the primary combatant in this altercation is China. Even more interesting, perhaps, is that we have more exposure to China than ever before,… Read More
Bond Yields: Still Crazy After All These Years
To my surprise, it’s been more than three years since I wrote about negative yields on bonds throughout the world. In my article, which can be found here, I wrote that bond yields could go a lot lower than I ever thought since I thought that they were ‘zero-bound.’ A year later, I returned to the topic when the yield on 50-year Swiss bonds had a negative yield. The article… Read More
Participant Insights 2Q 2018
Click here to view Participant Insights 2Q 2018.
What Happened to International Stocks?
As we approach the halfway point of 2018, some things are looking very different from last year. Although it has been a bumpier ride compared to last year, US stocks are on track to have another good year as the S&P 500 is up more than 4.5 percent and the Russell 2000 Index is up more than 10 percent. But unlike last year, international stocks have effectively been flat, flipping… Read More
Changes are Coming to the S&P 500
In the old active-versus-passive debate, the S&P 500 serves as the champion fighter in the passive corner. That’s funny, because the S&P 500 is hardly passive. For example, it’s not a list of the largest 500 companies, but a curated list of stocks chosen by the index committee at Standards & Poor’s. Most of the differences between the index and the actual list of the largest 500 companies are relatively… Read More
Don’t Get Greedy!
I read an interesting thought experiment the other day. The question posed was simple enough: if you knew how much a stock was going to rise in a given year, how much would you bet on it? Taking it another step, if you knew that the stock was going double in a year, would you borrow money and leverage your return? If so, and forgetting margin requirements, how much would… Read More