2
Jan
2018
My Prediction for 2018
One thing that you can count on at the start of every new year is a fresh set of predictions from those of us in the investment business. Last year, one of the most widely discussed and accepted views for 2017 was that the dollar would continue to gain strength, as it had for the previous three years. Instead, our currency lost about 10 percent, widely defying the consensus views…. Read More
29
Dec
2017
Participant Insights 4Q 2017
Click here to view Participant Insights 4Q 2017.
18
Dec
2017
The Tax Overhaul Details (In English)
Late Friday evening, Congressional Republicans released the final version of their tax reduction and simplification plan. Although many elements match the House and Senate versions, there are some differences worth noting. I should point out, though, that the following is a broad summary – I haven’t read all 1,100 pages of the proposed law. Furthermore, this summary only covers the changes for individual filers, not corporations or partnerships. Lastly, you… Read More
11
Dec
2017
Efficient Markets Fact and Fiction
For almost 50 years, one of the most controversial ideas in finance is that markets are efficient, as presented by Gene Fama’s Efficient Market Hypothesis (EMH) in 1966. Let’s start with a simple definition of EMH: Current market prices incorporate all available information and expectations and are the best approximation of intrinsic value. In some ways, it’s such a simple statement that it’s a little surprising that it’s so controversial…. Read More
4
Dec
2017
The Crazy Thing? Stocks Could Go Much Higher
Long time readers know that I’ve been cautious on US stocks for some time, calling them overvalued in 2014. Last year, I referred to a quote from Sir John Templeton, who famously said that ‘Bull markets are born on pessimism, grow on skepticism, mature on optimism and die in euphoria.’ I said then that I could see the rally continuing on for years but that we were probably moving from… Read More
22
Nov
2017
The Curve is Falling… The Curve is Falling!
The yield curve has been a very hot topic lately in the financial news media. Multiple times a day, there are commentators pointing to the yield curve as a sign that markets are on the verge of imploding. Is it time to panic? The Federal Reserve has continued to push short term rates higher throughout 2017. Long term rates have responded by falling 10 bps. This has led to a… Read More
20
Nov
2017
The Bucket Approach
In my mind, the word ‘bucket’ should be banned from the investment industry because it brings to mind the ‘bucket shops’ where unlicensed hacks in boiler rooms cajole unwitting investors into pump and dump schemes. Despite my view about this word in this industry, it seems to be what we as a group have settled on for a particular retirement planning strategy (I’m not a fan of smart beta either,… Read More
13
Nov
2017
The Canary in the Bond Market?
The recent poor performance of junk bonds received a lot of attention last week, culminating in an article in the Wall Street Journal that asked, ‘Are High Yield Bonds the Canary in the Coal Mine?’ The two largest junk bond ETFs, HYG and JNK, saw their largest weekly pullbacks since August, falling just short of a percent each on unusually large volume. There are several reasons for the selloff: Barron’s… Read More
6
Nov
2017
The Fault in our Stars
In 2014, one of the breakout movies of the year was The Fault in Our Stars, a romantic drama based on a book written in 2012. I didn’t see the movie or read the book, but I did notice the box office receipts of $307 million compared to the production budget of $12 million – now that’s a solid return on investment! I also liked the sound of the title,… Read More
30
Oct
2017
How the Fed Could Change
According to reports Friday, President Trump is expected to announce his choice for Fed Chair sometime next week. Sources in the White House say the list of candidates has been narrowed down to three, current Fed Chair Janet Yellen, Fed Governor Jerome Powell and Stanford University economics professor John Taylor. The “Taylor Rule”, named after the same Taylor who is being considered by President Trump, was first introduced in an… Read More