Investment Insights

Latest Investment Insight - 09/12/14
A Macro View – Post-Labor Day Stasis
Well here we are. The operating assumption for much of August was that the end of summer post-Labor Day would lead to a renewed attention to markets after a relatively calm few months. The first week of September, however...

Webster defines inversion as reversal of the usual order of words, as in the placement of the subject after an auxiliary verb in a question. Bet you forgot that one from high school English. No fear. Wall Street has come up with a new meaning: a company re-incorporating in a country outside the US, primarily to avoid paying our high (35%) corporate tax rate. This could be anywhere in the free world.


Market Valuations and The Theory of Relativity

Depending on what metric you use to assess the stock market, equities could be cheap, expensive, or anywhere in between. Try not to be swayed by simplistic arguments based on selective analysis of historical valuations, patterns or averages. Advisors and investors should keep in mind that with so few opportunities today to find yield and appreciation, if long-term gains are to be had, stocks are where such gains are likely to be found.


Despite some unsettling events both domestically and abroad, the first half of 2014 resulted in relatively calm markets and extraordinarily low volatility. Will the markets close out the year quietly or strike back with a major correction? Should portfolios remain positioned for uncertainty and risk?


Stop already with the economic data. It's enough to choke a horse. We don't mean to disparage economists as they do a service in filtering through the data in an attempt to project the direction of the stock and bond markets. A case in point is the June jobs report. Private enterprise created 288,000 new jobs in June. That number used to be enough for most investors. It indicated that the economy is recovering and that the trend of job growth was accelerating. Then someone decides that that is not enough.


It is said that water only runs downhill. With the spring thaw we are having a melt-down. But, any good plumber can make water run uphill. Just like investors can make stocks run uphill no matter what the obstacles. This stock market is in the midst of a melt-up. Almost every day it ekes out a new high and most corrections are short lived.


The domestic economic landscape in the second quarter remained mixed, after the effects of severe weather in the first quarter lingered. The Bureau of Labor Statistics lowered its third estimate of first quarter gross domestic product (GDP) to -­‐2.9%, reflecting a broad-­‐based contraction in many areas of the economy, including consumer spending, exports and business investment. It was the largest decline in GDP in five years. The employment situation continued its trend of modest improvement...


Separating Risk from Reality

Unless the global financial system implodes or panic engulfs the system, investments such as high-yield bonds and emerging market debt may be less risky than many believe.