Judging the quality of your decisions can be one of the most challenging aspects of investing. The process can seem simple on the surface because every investing decision you make produces a measurable result in the performance that it generates, but performance is not the obvious yardstick that many investors think it is. The correct decisions in investing sometimes don’t generate the best results. The reason is that investing is not just a game of… Read More
A recent article by Bloomberg columnist Mohamed El-Erian discusses the implications of the robust rebound in U.S. stocks that occurred earlier this month, noting that it “raised several questions related to market behavior, policy and economics,” adding that how these questions are answered will “prove consequential not only for market prospects but for the global economy.” El-Erian argues that the equity rebound in the first week of June stood in contrast to two other market… Read More
An article in CFA Institute shares the opinion of Fundstrat Global Advisors co-founder Thomas Lee, CFA, that “major economic shifts occur in tandem with generational milestones.” “Generations drive markets way more than we appreciate,” Lee told an audience at the CFA Institute Equity Research and Valuation Conference last year, noting the following correlations: The demographic peak year of the Greatest Generation was 1930, just after the beginning of the Great Depression. The generation that followed… Read More
A small percentage of stocks account for most of the market’s gains, putting pressure on investment managers. This according to a recent article in The Wall Street Journal. “Fear of being left behind is a powerful force among fund managers,” the article says, “even if it means taking big risks.” The article notes that in the first six months of this year, technology shares accounted for all of the S&P 500’s gains, adding that “managers… Read More
The stock market has “some things going for it right now,” says a recent article in The Wall Street Journal, citing rising corporate earnings and economic growth as contributing factors. However, it adds, “what they hadn’t anticipated were the other risks that would weigh on stocks,” such as an aggressive Fed, slowing growth overseas and looming trade conflicts. Policy makers are leaning toward two more rate hikes this year, the article reports, and increasing inflation… Read More
It’s harder than ever for stock investors to beat an index fund because of what has become a “Winner Take All” economy in which relatively few large players are dominating the market–and such companies are increasingly hard to find. This according to a recent article in MarketWatch. Over the past year alone, the article reports, the number of publicly traded U.S. corporations has dwindled by more than 100 to a total of less than 3,500.… Read More
In a recent Wall Street Journal article, columnist Jason Zweig talks about the growth in tech stocks and the outlook for their continued upward trend. “At their lows this week,” writes Zweig, “the technology shares that have until recently been the stock market’s darlings—Facebook, Amazon.com, Netflix, Google’s parent company Alphabet and other giants—had fallen more than 17% since March 13. Over the same period, U.S. stocks overall fell 8%.” Although Zweig points out that the… Read More
A recent article in U.S. Chamber of Commerce Foundation discusses the capital market conditions behind the now nine-year-old U.S. bull market, including the shrinkage in the number of publicly-listed firms to “just one half what it was in the mid-1990s.” Over the past twenty years, the article reports, “U.S. companies bought back vastly more stock than they issued,” to the tune of $3.6 trillion. IPOs have also dropped off considerably, the article points out, citing… Read More
Just because market corrections are normal, that doesn’t mean they’re painless. This according to a recent article in Bloomberg. The article points out that the present bull market has seen five corrections before the most recent one, and “it’s taken around seven months on average for equities to climb out of their hole. Based on that path, the current jitters won’t be fully eradicated until August.” Since 2009, the article reports, the average correction in… Read More
Now isn’t the time for investors to get comfortable, says a recent article in The Wall Street Journal. The underlying economic environment, it says, is “muddier” than it was in January, with some survey data suggesting that growth may have peaked while inflation is “likely to pick up.” The article suggests that investors should learn from the past market events, specifically the “credit correlation blowup of 2005” when auto makers Ford and General Motors were downgraded… Read More