21 Aug 2017

Is Volatility Too High? Goldilocks Says it’s Just Right

Well, I am fresh back from vacation in Northern Michigan.  I had the pleasure of driving over the Upper Peninsula twice during this trip to pick up one of my daughter’s from camp.  That’s three trips over the UP this summer, but, sadly, only one pasty. From my perch up north, the big story for me was seeing volatility spike up for the first time in what seems like forever…. Read More

14 Aug 2017

Getting to Know Your Volatility

After a summer of historically low and realized volatility in the market, we finally saw a sharp spike in volatility as tensions rose between North Korea and the US last week. While the exact cause and timing behind the volatility could not have been predicted, we did know that the low levels of volatility would not continue forever. Whether or not volatility is back for a while, it is always… Read More

10 Apr 2017

Markets are Quiet, Enjoy Them for Now

The stock market has been unusually quiet this year.  For example, the S&P 500 didn’t fall by more than one percent until March 21st, just before the quarter ended. The Chicago Board of Options (CBOE) Volatility Index (VIX), which measures expected volatility, had the second lowest average reading for the quarter since the index was created in 1992. The chart below plots the VIX over the last three quarters in… Read More

30 Jan 2017

A Quote to Consider from Sir John Templeton

I am continually amazed by the huge number of thoughtful and apropos quotes that concern investing.  I’ve been writing and editing our quarterly newsletter, Portfolio Insights, for more than 15 years and I can still find plenty of great quotes without too many repeats. While I enjoy a great quote, I can’t say that any of them rise to the level of being an investing philosophy to live by, except… Read More

31 Oct 2016

Equity Risk Dominates Your Portfolio

When I describe ‘balance’ in a portfolio, here or in person, I am almost inevitably talking about an allocation that is somewhat evenly split between stocks and bonds.  I don’t have to specify that I am talking about how much money is in each allocation (forgetting for a moment all of the sub allocations). In recent years, however, some investment managers have pointed out that a portfolio that is evenly… Read More

17 Oct 2016

Buffett’s Wild Ride

Warren Buffett is rightly considered the most successful investor of all-time.  Not only has his holding company, Berkshire Hathaway, grown at a much higher rate than the overall market, he’s managed to earn exceptional returns for much longer than others who have also earned high returns. I was only able to pull data from 1987, but the last 29 years have been extraordinary for Buffett and his fellow shareholders.  Over this… Read More

12 Sep 2016

The End of Summer Break

The end of summer was notably quiet, but summer is over and judging from Friday’s market reaction, it appears that volatility may be back. The chart below shows the expected volatility priced in to options as measured by the Chicago Board of Exchange (CBOE) Volatility Index (VIX). You can see the volatility was high at the start of the year when we suffered a 10 percent correction.  Expected volatility cooled… Read More

25 Aug 2016

Dow Falls 1,000 (One Year Later)

Last year at this time, deep fears about China’s economy caused US markets to drop sharply.  The Shanghai market -8.5 percent one day drop spread to our shores and the Dow Jones Industrial Average (DJIA) fell -1,000 points in a single day. The week before, markets that had dropped by the massive one day plunge sent all of the stock market indexes into a correction, generally defined as a decline… Read More

24 Aug 2016

Investors Behaving Badly

Yesterday, when discussing the volatility of emerging market stocks, I have to admit that I was a little surprised by the year-to-date return, which is up 16.15 percent through yesterday as measured by the MSCI EAFE EM index. That’s pretty amazing because three months ago, the index was basically flat for the year – the entire return occurred almost exclusively since the Brexit (not that they are related – I… Read More

15 Jul 2016

Earnings Season is Upon Us

As you can see in the chart below, earnings season is upon us.  While 31 companies have already reported, a full 421 companies report in the next three weeks, leaving the last 48 companies to report during the rest of August and September. Analysts aren’t expecting much out of earnings season and think that earnings will decline by -5.6 percent. According to FactSet, it will be the first time that the S&P… Read More