Are high-quality businesses as overvalued as the broader markets and will that bode ill for our future investment returns?
Forty years of behavioral science research provides a more realistic framework for viewing investors and markets than does MPT.
As Baby Boomers heading into retirement pursue investment income, Leo Acheson of Morningstar says it’s important to have a good financial plan.
We are having a hard time finding high-quality companies at attractive valuations.
Given all the unusual factors attached to the current need to increase the debt ceiling, and the very unhealthy political climate, I could see a lot of turbulence in the markets just ahead. In a worst-case scenario, a debt ceiling crisis could even result in a new recession.
The financial markets continued to absorb major news events with surprising ease last week. Be it the tragedies in the U.K., the withdrawal from the Paris climate agreement, or the weakness in Friday's employment data, the stock and bond markets both continued to edge higher. Investors seem to have become conditioned toward individual isolated disappointments all while the bigger picture is toward one of global economic growth and relative stability.
In today’s Morning Tack, however, we are referring to “Better Call Shad,” not Saul, meaning Frederick “Shad” Rowe, the founder of Dallas-based Greenbrier Partners and also a “fixer of sticky situations.” The current short-term “sticky situation” would be the stock market flat-lining for a few weeks and in the process frustrating both bulls and bears alike. After our talk, I went back and re-read Shad’s April letter to shareholders. There were a few lines that really resonated with me.
The international markets have lower valuations, improving growth and possibly even more political certainty than here in the U.S. Foreign currencies are rising against the U.S. dollar as economic trade flows shift and investors want to diversify away from the United States. It is getting increasingly more difficult to make business and investment decisions with Washington D.C. policy proposals and reactions being so fluid. CEOs are confused, foreign leaders are confused and even I am confused whether buying an American made car without the Ford or GM logo on it is still a pro-American purchase.
Is time segmentation a superior investment strategy for retirees relative to total-return investing?
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.