A question has come up repeatedly over the past month, as markets reacted to the war in Iran and the associated spike in oil prices. The expectation, rooted in decades of experience, is straightforward: stocks fall, and defensive assets should step in to cushion the blow. This time, it didn’t work that way. Global stocks fell by -6.1 percent, as expected. The S&P 500 fell a little less, -5.0 percent…. Read More
I would estimate that I’ve spent less than an hour thinking about silver in my career, and most of it was preparing to write this. I had heard that silver was on a tear, as was gold, but even more so. I only looked at the last year, but the chart below shows that since early February 2025, ignoring Friday, gold has nearly doubled, and Silver was up 3.5x. The… Read More
I’m amazed that the year-to-date return for all of the non-US stocks are up 26.2 percent, and the S&P 500 is ‘only’ up 15.7 percent. It seems like a long time since global stocks have outperformed the S&P 500, so I decided to do some digging. I started with a slightly different index than what I use in the market summary. The summary is all non-US stocks, but for further… Read More
It’s not surprising that clients are inquiring about gold, as it has risen 25.3 percent so far this year. When we started this business in August 2002, I thought gold was a terrible investment idea. However, in the 273 months since then, it has handily beaten foreign stocks and bonds, and even eked out a small win over the S&P 500. That’s right, during this time frame, gold gained 10.9… Read More
When we meet with clients to create or review a financial plan, there’s a section where we try to get a sense of risk tolerance. We’ll show an asset allocation and its long-term expected return, and then, in big red numbers, what this portfolio would have lost in the 2008 financial crisis. We show it in percentage and dollar terms, based on the portfolio size at that time. The idea… Read More
I listen to a lot of investment podcasts, and one of the ones I enjoy the most is Trillions, produced by Bloomberg. It stars two journalists, Joel Weber and Eric Balchunas (pronounced bal-chew-ness, as best I can tell), and a few other rotating cast members. I enjoy listening because the hosts are Generation Xers (like myself), who are funny and down to earth. They feel like friends who talk in… Read More
As noted above, the University of Michigan Consumer Sentiment index received much attention last week. The index is a monthly survey of at least 500 US households, who are asked about their current financial situation, economic expectations, and attitudes toward purchasing major household items. The consensus estimate for February was a reading of 63, which would have been a little lower than the January reading of 64.7. When the actual… Read More
The headlines have been volatile lately, leading to anxious calls from clients wondering if they should take action based on what they think might happen. If you want to make some changes at the margin, that’s probably okay, but a wholesale change at this moment probably says more about your political views than an unbiased investment outlook. When we set an asset allocation policy with clients, it’s usually in the… Read More
Last week, I said that I would broadly explain hedge funds, but I was distracted by their high costs. I promise to stay on point today. Hedge funds are pooled investment funds that are less regulated than other types of pooled vehicles like mutual funds and ETFs. They are less regulated because their clients are wealthier, which presumes them to be more sophisticated (I’m not sure that’s true, but that’s… Read More
We’re only 10 days into the new year, and markets of all stripes are off to a rocky start. I think people intuitively understand that stocks are volatile, and after two years of 20+ percent gains for the S&P 500, a small “give-back” isn’t so hard. Bonds are another story. Most people quickly admit that they don’t understand them very well but know they are supposed to be the “safe”… Read More
