11 Oct 2021

Before You Invest in Alternatives

Over the past few years, one of the more popular categories of mutual funds has been so-called ‘alternative’ funds. Alternative investments, broadly defined, are strategies that seek returns that are uncorrelated from traditional investments like stocks and bonds. While alternative investments were once largely confined to private partnerships, they are now popular in mutual funds, or what the industry refers to as ’40 Act Funds. Following the 2008 financial crisis, alternative mutual funds… Read More

27 Sep 2021

Is China’s Evergrande Our Lehman Brothers?

The big selloff last week centered around a massive Chinese real estate developer, Evergrande, which is almost certainly insolvent. Although not many folks around here (including me) had ever heard of Evergrande, the company is the second-largest developer in China and ranks 122nd on Fortune’s Global 500. According to Wikipedia, in 2020, Evergrande reported revenues of $78.4 billion and profits of $1.25 billion, which is a fairly slim profit margin… Read More

13 Sep 2021

Inflation and the Price of Milk

The inflation that we all worried about earlier this year is showing up in the monthly numbers. It’s too early to say whether the higher readings are transitory, as the Fed would say, or here to stay. The most recent reading showed that inflation for the 12-months ending in July is 4.2 percent for ‘core’ inflation, and 5.3 percent for headline inflation. What’s core inflation? It’s the headline number but… Read More

9 Aug 2021

The Fed and the Long Term

Over the weekend, I watched a Front Line documentary on PBS that came out in July, called The Power of the Fed. You can watch it here, although you may have to be a member (like me!). The documentary chronicles the power of the Federal Reserve, with particular attention to the bond-buying program called quantitative easing that followed the 2008 global financial crisis. The documentary makes the case that the… Read More

12 Jul 2021

When You Think One Thing, Think Again

Over the past few months, markets and investors were worried about the possibility of inflation coming back. And, there was and is good reason for concern: the economy is rebounding quickly, finding examples of labor shortages is easy, there is still massive monetary stimulus in place, and there are discussions of even more fiscal stimulus to come. I’ve personally been a little bit skeptical, mostly because I remember all of… Read More

6 Jul 2021

Happy Birthday America!

Over the last few months, I’ve been bothered by what’s happening to Jack Ma, the co-founder of the Chinese version of Amazon, Alibaba, and Ant Financial, the massive digital payments company that boasts the largest money-market fund in the world. I genuinely don’t understand how a Communist country has billionaires, but Jack Ma’s fortune is estimated to be almost $50 billion. Last October, Ma gave a speech that criticized Chinese… Read More

21 Jun 2021

Federal Reserve Changes its Tune

As noted above, the Federal Reserve took center stage last week as they signaled that change is afoot with short-term interest rates. While they did not change interest rates and did not adjust their $120 billion monthly asset plan purchases, they did indicate through their ‘dot plot’ that more members see interest rate hikes in 2022 and 2023. Although I don’t have a picture of the dot plot, I made… Read More

24 May 2021

Betting Big on the Future

Some of the hottest exchange-traded funds (ETFs) over the past few years come from the ARK family of funds, founded and run by famed investor Cathy Woods. The ARK funds are a series of theme-based ETFs that seek to find the early companies in a variety of emerging fields including robotics, space exploration, genomics, fintech, and 3D printing, among others. I can’t say that I’m very familiar with the ARK… Read More

17 May 2021

Inflation Data Spooks Market

Markets were caught off guard last week by several inflation data points last week, and the biggest surprise came from the core inflation rate which was expected to come in at 0.3 percent for the month but was 0.9 percent instead. Most of the time stocks and bonds move independently of each other, but stock and bond prices fell on the inflation news because it could prompt the Federal Reserve… Read More

3 May 2021

Biden’s Tax Proposal

President Joe Biden outlined his tax proposals in his address to Congress on April 28th and issued an 18-page fact sheet, which can be found by clicking here. There are many proposals, but here are some of the items of note for individual investors: The top tax bracket would increase to 39.6 percent from 37.0 percent. In 2021, the top bracket began at $523,601 for single individuals and $628,301 for… Read More