Ever since ChatGPT launched at the end of 2022, conversations about what AI might mean for the economy and our portfolios have been hard to avoid. Even a major geopolitical shock like the 2026 Iran conflict proved to be a distraction measured in weeks. I don’t claim to be an expert on AI, but I use it every day in my work and have spent time with two of the… Read More
A few months ago, I read Coming into View: How AI and Other Megatrends Will Shape Your Investments by Joe Davis, Vanguard’s Chief Economist. It’s a thoughtful book that I recommend. It isn’t overly technical, and it frames the biggest questions investors face today: AI, debt and deficits, demographics, potential deglobalization, and—hardest of all to measure—geopolitical risk. The core question Davis keeps returning to is deceptively simple: can AI generate… 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
We often say that we eat our own cooking, and I think everyone understands what we mean: we personally invest in the same strategies and products that we recommend to our clients. As fiduciaries, we’re already required to put our clients’ interests ahead of our own. Technically, I suppose it’s possible to meet that obligation while investing differently ourselves, but it wouldn’t make much sense. What we’re really saying is… Read More
Many people are asking whether we’re in the middle of an AI bubble, and the answer, in my opinion, is probably yes. The much harder question is what to do about it. A recent analysis by Jason Furman, a Harvard economist and former Chair of the Council of Economic Advisers under President Obama, calculated that 92 percent of economic growth in the first half of 2025 was related to data-center… Read More
For several years, Morningstar has released its annual Mind the Gap study, which highlights the difference between what a fund returns and the returns investors actually realize. The study underscores a familiar struggle: investors chase performance—jumping into funds after the best gains have passed, or bailing out during a slump only to miss the rebound. The penalty for this behavior is steeper than many realize. Over the 10 years ending… Read More
Perhaps one of the longest-running debates in the investment industry is the so-called “active vs. passive” debate. Most people understand it this way: Will active managers who pick stocks (or bonds) fare better than index funds? The industry of stock-pickers says yes; the index fund companies say no way. The name “passive” is just terrible. It sounds like nobody is doing anything, when in fact index investing is a reflection… Read More
Last week, I described Vanguard’s take on growth and inflation, and it got me thinking about inflation. In general, I was comforted by their views, which I characterized as ‘Steady as She Goes,’ but the inflation number started to bother me a little bit. Their forecast is for core Personal Consumption Expenditure (PCE), which is the Federal Reserve’s preferred measure for inflation, and Vanguard projected 3.0 percent for 2025 and… 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 the stock market sold -10.7 percent in the three days following Liberation Day, a handful of clients called and asked, ‘Hold the course, right?’ They knew what I would say, and they all held on, and I was relieved. When President Trump paused his tariff plan the following week, the S&P 500 rose 9.5 percent. That wasn’t enough to offset the loss, but it went a long way. One… Read More
