9 Oct 2014

When The Fed Speaks, The Market Listens

Unlike most central banks, the Federal Reserve has what is known as a dual mandate: to foster full employment and stable prices. Generally speaking, doves are thought to focus more on full employment at the expense of inflation and, theoretically, hawks are more willing to accept higher unemployment for the sake of stable prices. Of course, in reality, everyone is in the middle somewhere, since no one wants high unemployment… Read More

By David Ott Tags: ,
22 Sep 2014

What if You Called The Bond Market Perfectly?

It’s an interesting question. The ability to call the tops and bottoms with perfect accuracy is considered the “holy grail” of bond market investing. We spend a great deal of effort talking to clients about the risk of trying to make speculative calls – the risk of being wrong of course. Just as an exercise I thought it would be neat to imagine what it would be like if we… Read More

By Cliff Reynolds Tags: , , , , , ,
20 Sep 2014

Why Aren’t Interest Rates Higher?

With a lot of focus being put on the coming end to the Federal Reserve’s quantitative easing campaign, this article will delve into some of the other factors impacting interest rates in the US. The Federal Open Market Committee (FOMC) has maintained a steady course ever since Chairman Bernanke first hinted at the end of quantitative easing in the spring of 2013. The “Taper” which is scheduled to complete this… Read More

By Cliff Reynolds Tags: , , , , ,
17 Sep 2014

ALM Insights – September 2014

ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: What if You Called The Market Perfectly? The Impact of Fed Tightening Why Aren’t Interest Rates Higher?

By Cliff Reynolds Tags: , , , , , , , ,
16 Sep 2014

The Naked Truth About Actively Managed Mutual Funds

Twice per year, Standard & Poor’s issues a report that compares the performance of actively managed mutual funds to corresponding S&P indexes. The most recent report, the S&P Indexes Versus Active, or SPIVA, can be found here. It’s a great report because it provided high quality, continuous evidence in the ongoing debate about active versus passive management. The debate, which has being going on for 30+ years, centers on who… Read More

By David Ott Tags: , , ,
8 Sep 2014

Markets React to Disappointing Jobs Data

The employment situation in the US was worse-than-expected in August, according to new data from the Bureau of Labor Statistics. The headline unemployment rate fell from 6.2 to 6.1 percent, but as it is often the case, the headline rate doesn’t tell the whole story.  For starters, one of the largest contributors to the decline can be explained by a lower unemployment rate among teenagers and other less-educated workers. The… Read More

By David Ott Tags:
5 Sep 2014

Why We Avoid Junk Bonds

The Wall Street Journal had a headline yesterday that I couldn’t resist: Junk Bonds Deserve a Place in Investors’ Portfolio. I like to read articles where I agree with the fundamental proposition, but I REALLY like to read articles where the premise completely contradicts my view, or the view of Acropolis. This article falls in the second category since we believe that junk bonds don’t deserve a place in your… Read More

By David Ott Tags: , , ,
3 Sep 2014

Falling Dollar Fallout

Five years ago, dire predictions were a dime a dozen. It was, after all, a very scary time fraught with uncertainty. Amid all of the dreadful forecasts, one bothered me a lot less than the others: the US dollar would collapse leaving Americans pushing around wheelbarrows of worthless cash in order to buy just one loaf of bread like in Germany’s Weimar Republic. The idea was that the Federal Reserve… Read More

By David Ott Tags: ,
19 Aug 2014

Not All Indexes Are Created Equal

Acropolis will turn 12 in less than 10 days and I can’t help reflect on what has changed over that time and what has stayed the same. Since the beginning, we’ve used index funds, but the way we use them has changed fairly dramatically in some cases. Take small cap stocks, for example. A dozen years ago, we used exchange-traded-funds (ETFs) as the core component of our small cap allocation… Read More

By David Ott Tags: ,
7 Jul 2014

Unemployment Report Does’t Disappoint

The fireworks started a day early on Thursday with the Bureau of Labor Statistics announcement that employment increased by 288,000 in June and that the April and May numbers were revised upward by a combined 29,000 jobs. June marked the fifth month where more than 200,000 jobs were added per month and averaged more than 250,000, a streak that we haven’t seen since the late 1990s. Furthermore, the unemployment rate… Read More

By David Ott Tags: