17 Mar 2025

Sentiment Shifting

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

By David Ott Tags: , , , , , ,
10 Mar 2025

Nobody Likes Volatility

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

By David Ott Tags: , , , , ,
3 Mar 2025

How Do Tariffs Work?

A longtime friend and reader asked me to explain how tariffs work. Of course, it’s a politically charged topic, but a simple description of how they function should be apolitical and straightforward enough. I will start with a made-up product, Wakanda’s Widgets, which are imported to the US. My made-up supply chain has three players: the manufacturer in Wakanda, a US importer that also acts as a distributor and the end retailer… Read More

By David Ott Tags: , ,
3 Feb 2025

The Roaring 20s

A few weeks ago, someone told me we’re halfway through the 2020s. I was caught off guard, but they were right. They went on to say that this 1920s is looking even better than the last round 100 years ago, so naturally, I went to the data. The chart below shows the growth of $1 invested in large-cap stocks 100 years ago (in green) and this century (in yellow). Somewhat… Read More

By David Ott Tags: , , ,
27 Jan 2025

The Cutting Room Floor (Part 2)

Last week, I promoted tonight’s 7th Annual Investor Social by showing some of the slides that I had to cut from the presentation. Since we are at capacity for the ballroom, I was scolded and told to do it again, but I’m breaking the rules because I said I would show more today! Plus, I think it’s okay to come to the show as long as you’re okay standing in… Read More

By David Ott Tags: , , , ,
6 Jan 2025

Ring in the New Year with Market Statistics

There are many articles about where markets ended in 2024 and where they might go from here. This isn’t one of those articles, but we will send our quarterly newsletter out shortly that does and will host an in-person event, our Investor Social, at the end of this month. One factoid I read was that it was the best two-year return for the stock market since the 1990s, or in… Read More

By David Ott Tags: , , , , ,
16 Dec 2024

Final Insight of 2024!

The late Thanksgiving and my usual Christmas-denial meant that I was surprised to see that this is effectively the last Insight for the year. Yes, I could send one on Christmas Eve and another on New Year’s Eve eve, but returns have been so good this year, that I thought we could all take a break and enjoy the holidays. Before I go, however, I thought I would show what… Read More

By David Ott Tags: , , , , ,
2 Dec 2024

Chance of Recession? About Average

A year ago, the consensus was that the US economy would likely enter a recession within a year. The yield curve was inverted, the index of leading economic indicators was in the tank, and it wasn’t clear when the Fed would start cutting rates. I often look at Bloomberg’s survey of economists, which asks the probability of a recession in the next year. It’s an imperfect measure, but economists should… Read More

By David Ott Tags: , , ,
18 Nov 2024

Are Rates Rising or Falling? Both.

Last week, I talked to a client who said something like, “My bonds aren’t doing well because yields are going up, but the Fed just cut rates. I don’t understand.” I can understand, and the answer is that the industry is lazy when discussing yields and rates. Let’s start at the beginning, though. The first part of the statement states that bonds aren’t doing well because the yields are going… Read More

By David Ott Tags: , , , , ,
28 Oct 2024

Why Not All Tech?

Over the last ten years, the oldest technology ETF I could find, the Select Spider Tech fund (ticker symbol XLK), has made more than 20 percent per annum through September 30th. A $10,000 investment in that fund would have been worth $64,172 at the end of last month. Even though I know better than to drive forward while looking out through the rearview mirror, I can’t help it: I want… Read More

By David Ott Tags: , , , , , ,