27
Jun
2022
The Chance of Recession
Last week, I promised to discuss the odds of entering a recession in more depth and suggested that a financial crisis is less likely this time (but you never know). If you missed it, you can read it here. I also referenced a talk I saw by local Fed official Bill Emmons, who highlighted the possibility of a recession in 2018. He wasn’t right about that (well, he only said… Read More
21
Jun
2022
And Now: Some Good News
The most salient question today is whether or not the US and the rest of the world will enter a recession. The answer, of course, is that, at some point, we will enter a recession. I think that a much harder question is when we enter a recession. I’ve heard a few people say that we’re in one now because the first quarter’s Gross Domestic Product (GDP) was negative, and… Read More
13
Jun
2022
Inflation: A Deep Dive
I like to say that this newsletter is a mix of information on investing, financial planning, and economics. Regular readers know that I tend to focus most on investing, then financial planning, and economics is a distant third place. The current inflation environment, however, is forcing me to cover more economics, although the reality is that inflation materially impacts investing and planning. Today, I will look at inflation in isolation,… Read More
6
Jun
2022
The Second-Most Important Element of Retirement Planning
I’ve focused on bear markets for the last two weeks because the stock market briefly dipped into bear market territory a few weeks ago. Since then, markets have recovered some of what was lost, although there is still a way to go to get back to even. One of my colleagues pointed out that as long as your portfolio could reliably provide the cash flow that you need to live… Read More
31
May
2022
A Look at Bear Markets, Part II
What a difference week makes! Last week, with the market down -18.2 percent from its all-time high and dipping into bear market territory at some points during the day, it felt like a bear market was a sure thing. Of course, it may still happen, but with stocks now down -12.8 percent, it doesn’t feel as imminent. Last week’s article focused heavily on bear markets, almost to the point of… Read More
23
May
2022
A Look at Bear Markets
Even though the S&P 500 closed flat on Friday, it was down substantially in the middle of the day, down -2.3 percent in the late morning. At that moment, the S&P was down more than 20 percent from the all-time high set in January. Since a bear market is generally defined as a -20 percent decline from the recent peak (also called a drawdown), a lot of digital ink was… Read More
16
May
2022
Pricing Lessons from Private Investments
Investment strategies can be trendy. After the tech bubble, real estate investment trusts (REITs) were the rage. Then, just before the 2008 financial crisis, fundamental indexes, which weight stock positions by fundamentals like earnings, took hold. After the 2008 crash, managed futures and other alternatives were all the buzz. Then, it seems like the world couldn’t have enough factor funds. Now, the hottest thing going in the investment business are… Read More
9
May
2022
The Week When Not Much Happened?
The volatility last week was startling. The S&P 500 was up 2.99 percent on Wednesday but then fell -3.56 on Thursday. It was just as startling as the week before, when the S&P 500 rose 2.47 percent on Thursday, only to fall by -3.63 percent on Friday. Or the week before that, when stocks rose 1.61 percent on Tuesday and fell -1.48 percent on Thursday and -2.77 percent on Friday…. Read More
2
May
2022
Ben Franklin on Volatility
I’ll bet you know the old Ben Franklin saying that ‘the only things certain in life are death and taxes.’ While those things are certain, there is, thankfully, much more to life. A full life will mean different things to different people, but there are probably common elements that include family, friends, good health, prosperity, spiritual wellbeing, and fun, among other things. We also know that life can be difficult…. Read More
25
Apr
2022
Now Showing on Netflix: A Cautionary Tale
Although earnings were reasonably good overall last week, there were some standouts both to the upside and downside. But the winner for biggest earnings news went to Netflix (ticker symbol: NFLX). The company reported earnings of $3.53 per share, which was well better than analyst expectations of $2.91 per share, and the company’s own guidance, which was for $2.86 per share. But Netflix also said that they had lost subscribers… Read More