26 Jun 2017

Buying China

Quick – name the country with the second largest stock market in the world! Obviously, we know that the US has the largest stock market in the world.  But did you guess Japan, Great Britain or France?  Those are good guesses since they are the three largest developed markets in the world. Maybe you guess China, which is the fourth largest market in the world as measured by the weight… Read More

3 Oct 2016

Two Lessons from the Third Quarter

Even though the first day of fall was on September 22nd this year, it’s only when we enter the fourth quarter that I start to think about the changing leaves, shorter days, corduroy pants, flannel sheets and raking the leaves. I do love summer, which I mentally compartmentalize into the third quarter and 2016’s was particularly enjoyable given the strong market performance across the board. The chart below includes the… Read More

1 Sep 2015

Deconstructing the Dow Jones Industrial Average

In last week’s market turbulence when the Dow Jones Industrial Average (DJIA) fell by 1,100 points in a single day, I had to talk about something that I don’t like talking about: the DJIA itself. For the most part, I’m able to avoid talking about the DJIA, which is nice, because I think the index is pretty much an almost worthless relic of history. That said, when markets are volatile and… Read More

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29 Jul 2015

When the Index is Wrong

When you buy an index fund, it’s natural to expect that your fund will earn basically the same return as the index. In a perfect world, you should expect an index fund to earn the index returns minus the cost of the index fund.  If an index fund charges 0.1 percent annually and an index earns 10 percent, you should expect to earn 9.9 percent. There are other reasons why… Read More

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19 May 2015

Dow 36,000

Seeing the DJIA at 18,000 reminds me of a book published at the peak of the internet bubble titled, ‘Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market,’ by James Glassman and Kevin Hassett. At that point, the DJIA was about 11,000, so it only had to little more than triple to hit the 36,000 mark.  I had graduated from college in 1995 when… Read More