23 Sep 2015

What Investors are Anxious About

Although there was no specific catalyst for yesterday’s trading action, investors are clearly worried about global growth.  The chart below shows the most recent Forecasts from the International Monetary Fund (IMF) that were produced in July. While the global growth picture is flat and advanced economies are growing, according to their projections, emerging markets and China are slowing down.  This isn’t news: the market volatility that we’ve been dealing with… Read More

By Tags:
22 Sep 2015

Don’t Worry, Be Happy and Live Longer

When we look at our financial planning model, a lot of clients say something like, ‘well, I’m never going to make it that long anyway.’ According to Society of Actuaries, more than half of Americans underestimate their life expectancy and that their financial planning time horizons are too short. When asked how long a person their age and gender was expected to live, 40 percent of respondents gave answers that… Read More

By Tags:
21 Sep 2015

Bonds Funds at 84 Cents on the Dollar

One of the smaller, but still very interesting types of securities are closed-end funds (CEF).  While traditional mutual funds (technically called open-ended funds) are much larger, the CEF market dates back to 1893 – 30 years before the first mutual fund. The major distinction between the two fund types (ignoring exchange-traded funds, or ETFs) is that mutual funds continuously create new shares as new investors come into the fund and shares… Read More

By Tags:
18 Sep 2015

Now That’s What They Call Dovish

Well, we’ve got at least a few more months of the Fed’s ongoing ‘will they or won’t they’ drama about when they will raise short-term interest rates. Although markets did not expect a rate increase, it’s really impossible to know until the announcement because it really boils down to the judgment of the 12 Federal Open Market Committee (FOMC) members. You might think we don’t know anything more than we… Read More

By Tags:
17 Sep 2015

Puzzling Hedge Fund Returns

We all know that stocks had a tough August with the S&P 500 down -6.03 percent.   Things weren’t better in other parts of the world either as the MSCI ACWI ex US index, which is basically the rest of the world outside of the US, fell by -7.59 percent. Even the bond market, as measured by the Barclays Agg lost money, fell -0.14 percent. If stocks and bonds lost money,… Read More

By Tags:
16 Sep 2015

The Secret Sauce Behind Value and Momentum

One of the interesting market developments so far this year is the relative performance of momentum versus value in large cap stocks. Earlier this year, I wrote a primer on each strategy (found here and here) and at the end of the momentum article, I pointed out that value and momentum work especially well together. While both strategies have enjoyed higher returns than the overall market, they do so at different times, which… Read More

By Tags: ,
15 Sep 2015

A New Fed Plot Twist?

I thought I had heard every possible outcome of this week’s Fed meeting, but I heard an interesting new scenario yesterday from a bond specialist at the largest asset management firm in the world. Right now, we all say that interest rates are at zero and that the Fed is engaged in a ‘zero interest rate policy,’ or ZIRP.  That’s not quite true though, the fed funds target rate, as… Read More

By Tags:
14 Sep 2015

St Louis Stocks Shine

The other day, Michael and I were talking about stocks based in St. Louis and I remembered that Bloomberg had created an index of St Louis stocks. When I loaded the track record on the screen, Michael and I were pretty impressed: St. Louis stocks have done extremely well!  The chart below shows the growth of $1 invested in the Bloomberg St. Louis index compared to a $1 invested in… Read More

By Tags:
11 Sep 2015

Debt Ceiling, Here We Come (Again)

Earlier this week, Ryan Craft and I went to Washington DC for a full day of presentations put on by Macroeconomic Advisors. We heard from some of the country’s top economists, including the Director of the Congressional Budget Office (CBO) and the Chairman of the White House’s Council of Economic Advisors (who also happened to be Hollywood superstar Matt Damon’s freshman roommate at Harvard). While I plan to share some… Read More

By Tags: