2017 seems to have flown by. Personally, I welcomed the birth of my son, renovated and moved into a house that was previously being used to sell methamphetamines, and also managed to sneak in a short visit to India. On the whole, quite an eventful year! Looking at the markets, we were surprised by the continued strength. I mentioned in July that while we were close to the end of this bull market, we shouldn’t quit on it just yet. And sure enough, the SP 500 index (which measures the performance of the largest publicly traded companies in the US) …
What You Need To Know About The Coming Market Melt-Down
Everyone knows it’s true – the market is due for major correction. It’s coming practically any day now. Clients, friends and family members – they’re all voicing their concern over the length of this bull market. After all, 2008 was nearly 10 years ago. And we all know bull markets don’t go on forever. The talking heads on the TV are all worried about how overvalued the stock market is. Using regular or cyclically-adjusted price-to-earnings ratios, or various other metrics, it’s easy to see how expensive stocks have become. And the popular investment gurus are all predicting a major market …
Q1 2017 Market Recap
The first quarter of 2017 is over. The talking heads on TV have been calling for a drop in the stock market for the past five years. And yet it keeps chugging along. The 10-year US treasury spiked from a low of 1.3% last July to 2.6% this year, on the anticipation of Trump’s tax cuts and infrastructure spending. It’s since fallen to 2.3%. This decline is notable since it occurred AFTER the Federal Reserve actually raised short-term interest rates last month. While it is widely believed that interest rates (and also mortgage rates) are heading higher over the long …
Investment Lessons of 2016
2016 was a wild ride! What if, at the start of the year, you had a crystal ball and you knew January and February would see severe stock market declines leading to the worst start of any year, Britain would shock the financial markets by voting to exit the European Union, and Donald Trump would be elected President? Would you have changed anything? Would you have sold all your stocks for the safety of bonds? If you had, you would have traded some spectacular gains in the stock market for losses in the bond market! After the decline in January …
What’s Next For Trump?
What an eventful November it’s been! The month started out with a shock, as Donald Trump was elected President. None of the polls had him winning, and I doubt anyone seriously believed he would win. It’s possible Trump himself was shocked at his own victory. As we saw with Brexit earlier this year, the popular (logical/obvious?) vote was not the outcome we got. On the eve of the election, and also leading into the results, several of you reached out asking if your portfolios were well-positioned for the election outcome. And as I mentioned my last post, we let process …
Happy Labor Day!
Summer is almost over. Just two months ago the market was reeling from the effects of the Brexit. Following the steep declines in January and February, it was enough to shake the confidence of many investors. Hopefully you weren’t one of them. After a brief decline, the stock markets have since rallied strongly. Stock markets will always be volatile – but panicking never helps. Despite all the volatility over the past 12 months, those that stayed the course have seen their portfolios go up. At least they should have gone up if they had a globally well-diversified portfolio. And even …
Should You Worry About the Brexit?
By now, you probably heard of Britain’s decision to exit the European Union. Financial experts and book-keepers all thought Britain would vote to remain, so the results came a shock. Global markets dislike surprises and reacted accordingly. The British pound dropped 10%, the largest move ever. European and Emerging markets dropped 6-8% and even the S&P500 was down nearly 4%. Ironically, British markets (FTSE 100 Index) were down only 3%, presumably because the decline in the British Pound will make British exports cheaper, actually helping British companies in the near term. Meanwhile, US Bonds held up and Gold popped 5% …
All Asset Classes Turn Positive
Tax season is finally over! Tax time is stressful for most people. It’s a tedious annoyance, that reminds us how much money we’re sending to Uncle Sam, our silent partner in all our profitable ventures. Hopefully, you’ve finished filing your 2015 taxes and there were no unpleasant surprises. Only pleasant ones, like a bigger than expected tax refund. One pleasant surprise in the markets is the revival of Commodities, and the continued performance of gold. As I mentioned last month, I expect we’re in the beginning stages of a gold rally. Gold is now up 21% for the year, and our Gold Miners ETF is up …
Gold Shines in 2016
Wow! It’s been a roller-coaster ride of a first quarter! After dropping like a stack of bricks during the first six weeks of the year, the market staged an incredible comeback during the last six. The S&P 500 rallied 14% since it’s February lows, ending the quarter up 1.5% for the year. This is probably the strongest rally I can remember (outside of the tech rally in 1999). Luckily our value and quality-based strategy did even better, outperformed the market by about 5 percentage points. After last year’s performance, where mostly low-quality, unprofitable company stocks went up, and value/quality-strategies performed …
Economics Explained in Rap Format
I came across this amazing rap video which talks about boom and bust cycles, effects of low interest rates and government spending. Basically everything you ever wanted to know about the economy! So whether you believe in Austrian economics, or you’re a Keynesian, you’ll enjoy this video.