Investment Insights

Latest Investment Insight - 10/24/14
A Macro View – Mid-Term Election Years and Small Cap Underperformance 
Much has been made of the poor performance of small caps relative to large caps this year. The Russell 2000 Index of small cap stocks has underperformed the Russell 1000 Index of large cap stocks by 10.6% (~1060 basis points) on a year-to-date basis through 10/23/14. A significant...
Latest Investment Insight - 09/24/14

When it Comes to Interest Rates, Who Says What Comes Down Must Go Up?

We are, at long last, nearing the end of one of the great central banking experiments: the U.S. Federal Reserve’s policy of quantitative easing, which began in the wake of the financial crisis of 2008-2009. While the unwinding of the monthly purchases of billions of dollars of mortgage-backed securities and other bonds has been going on for many months, markets are now increasingly attuned to what comes next. And the primary question is quite simple: will interest rates rise and if so, by how much and when?

08/25/14

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.

08/14/14

The World is in Crisis...the Markets are not

Markets have been gyrating for the past months in the face of a wave of geopolitical crises. But the chance of any of these crises dramatically altering the behavior of markets beyond the short-term is very, very slight.

07/21/14

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.

07/17/14

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?

07/16/14

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.

07/07/14

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.

07/07/14

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...

06/12/14

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.