Stocks and Bonds Rising in Sync for Now

A 60/40 mix of U.S. stocks and bonds generated a 13.6% return through the first six months of this year, “the best start for this portfolio since the first half of 1997,” according to a recent article in Fortune by Ben Carlson. The article notes that this was just the eleventh time such a portfolio began the first half of the year with a double-digit return. “This relationship might not make sense to those who… Read More

In a Stock and Bond Twilight Zone, Balance is Key

Falling premiums on speculative-grade bonds against lofty equity valuations suggests that, “beneath the surface of the S&P rally that equity and debt investors are placing opposing bets on the business cycle,” according to an article in Bloomberg. The article reports that, according to Goldman data, U.S. firms with solid financials are trading close to the highest valuation relative to their “fragile peers since the dot-com era of 2003.” It’s unclear how long this divergence will… Read More

How Much Longer for This Bull Market?

A recent article in The Wall Street Journal recalls the adage that bull markets don’t die of old age. “Nine years into an extraordinary run for U.S. stocks, it’s easy to buy into the idea that the only things that can halt the market are a recession or the Federal Reserve.” But this statement, it argues, “is only half right,” adding that “with the economy now appearing to be in the last phase of the… Read More

Stocks Are Cheaper, But Not Much

While the sell-off earlier this month led to lower share prices, according to a recent article in The Wall Street Journal, “they are still far from cheap.” The article points out several factors that led to the S&P 500’s dip, including “worries over how much the Federal Reserve will have to raise interest rates,” and “the wipeout in products that bet against volatility.” It argues, however, that the market’s valuation was at the center of… Read More

The “Near Perfect” Investing Environment May End Soon

For the past two decades, government bonds have moved in the opposite direction of equities in the short run but have produced similarly strong gains in the long run, representing a nearly “perfect” investment, according to a recent article in The Wall Street Journal. From the beginning of 2000 to the end of 2017, the article says, “holding the latest 10-year Treasury and reinvesting coupons returned 155%, the S&P 500 with dividends 158%, while a… Read More