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.
Have We Turned A Corner?
Previously, (in Should you Worry About Market Declines, and Staying the Course), I advised readers to ignore the news media and recent stock market declines and stick to their long-term investing goals. This was in response to several client calls worrying about an impending market collapse. After the volatility of the last six months of 2015, and the near 10% losses in the first 6 weeks of 2016, it’s easy to get spooked and yearn for the safety of the sidelines. But then, as often happens, the markets turned right around and rallied for the past 2 weeks, with nearly all asset …
Staying The Course
The market’s been quite volatile over the past several months. The talking heads on TV have been proclaiming it’s a bear market, with 2008-esq declines on the horizon. In this environment, it’s easy to lose your nerve and consider bailing on your investment strategy, or at least curtailing your monthly investment contributions to your retirement accounts. But the truth is hard to swallow – volatility is the just price you pay for investing in the stock market. While it’s a rollercoaster ride, especially in terms of emotions, historically you would have earned 8-11% in a well-diversified portfolio over long periods of time. …
Should You Worry About The Market Declines?
The market celebrated the New Year by dropping 9% right out of the gate… It’s the worst start to a year ever… And the market is now at its lowest level since late 2014. It’s natural to worry when the stock market has been down nearly everyday this year. But regardless of how long you’ve been investing, it’s hard to accept that nothing unusual is happening in the market. Declines of 10%-20% don’t signal the end of prosperity. They are normal market movements. And so long as you you hold high-quality, long-term investments in your investment accounts, you have nothing …