The Investment Strategies Channel

How to Make Time Segmentation Work in Practice: Three Options for Extending a Bond Ladder

For time segmentation to work, there must be a clear procedure for how to extend the bond ladder. Unfortunately, with its varied implementation, that procedure is often overlooked. I will examine the potential for time segmentation by considering three different ways to implement it.

What Does the Health Care Decision Mean for Stocks?

There is plenty of “upside risk.” Earnings growth is improving, even in the environment of modest growth. The recent market strength could go on for years without any policy changes. If some of the Trump agenda (probably with Democratic support) becomes law, it could mean a spike in both economic growth and profits. We already see improved business and consumer confidence.

The Climb

I spent last week climbing the mountains of Idaho and Utah, seeing accounts and doing presentations for our financial advisors and their clients. In my absence, the stock market did some climbing of its own...

Households' Equity Ownership Reaches 30%. It's Statistical Noise

Households have 30% of their financial assets in equities, the same proportion as they held at bull market peaks in the 1960s and in 2007. Does this mean another bear market is imminent? No.

What’s the Difference between a TAMP and a Robo?

Are “robos” nothing more than the latest version of TAMPs – turn-key asset management platforms?

You Can’t Time The Market?

Since the markets were closed on Monday, there really isn’t much to update from this past weekend’s newsletter. The markets remain clearly and undeniably overbought and the risk of a short-term correction outweighs the potential for reward.

Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator

With the latest release of Q4 Z.1 data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 125.3%, up from 123.1% the previous quarter. It is off its 129.7% interim high in Q1 of 2105.

Evaluating the Trump Effect on Global Equities

US economic policies have always mattered to international investors. While President Trump’s agenda is still taking shape, equity investors can already map out broad guidelines for identifying winners and losers among companies outside the US.

Moving Averages: February Month-End Update

Valid until the market close on March 31, 2017

The S&P 500 closed February with a monthly gain of 3.72% after a gain of 1.79% in January. All three S&P 500 MAs are signaling "invested" and four of the five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), Vanguard REIT Index ETF (VNQ), and PowerShares DB (DBC) — are signaling "invested".

Weighing the Week Ahead: Have Stock Prices Lost Touch with Reality?

It is a big week for economic data and the first address to Congress from the new President. Most of the punditry is engaged in a collective head-shake about overbought conditions. Even if the data flow remains strong.

Were Fama and French Right about Value and Size? An Ex-Post Test

Fama and French’s 1992 seminal research, which identified the value and size factors, was met with skepticism. Even the authors questioned the underlying economic rationale for their findings. With a quarter century of data, let’s look back and see if the skepticism was justified. Have value and small-cap outperformed?

Weekly Market Summary

All of the US equity indices made new all-time highs again this week. Treasuries were the biggest winner. A drawdown of at least 5-8% in SPX is odds-on before year year end, but there are a number of compelling studies suggesting that 2017 will probably continue to be a good year for US equities.

Trending

The term “trend” now has a broader use. Trending is a term used in reference to the buildup of posts on social media. And we find ourselves in a day and age when the leader of the free world is posting using stream of consciousness—annoyingly against a department store that no longer supports his daughter’s line of clothing or worse, tweeting against judges who disagree with his policies. This is a trend we shouldn’t miss.

Weighing the Week Ahead: Will Trump Policies Extend the Business Cycle?

We have another holiday-shortened week with little fresh data. While there are some Fed speakers on tap, it is not enough to feed the avaricious punditry.

Trump V. Yellen Round One

I expect to see little change in Fed policy. The new President will wind up appointing people with traditional credentials, but perhaps with different policy viewpoints. He will not reappoint Yellen, although people forget that the Fed Chair is often appointed by Presidents of both parties.