FINRA has released new data for margin debt, now available through May. The latest debt level is down 2.6% month-over-month.
The S&P 500 opened Friday higher than its Thursday close and stayed steady throughout the day. The index is up 3% from Thursday, is 18.5% below its record close, and is down 17.9% YTD.
Two forecasting methods predict a 54% stock market loss in 2022. Someday the stock market bubble will burst. But the data says we have not seen the worst of equity market declines.
Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.
Crypto meltdowns. Tech implosions. The biggest rate hike in decades.
I often say that it is a market of stocks and not a stock market.
The better ARK performed, the more money flowed into its main ETF, ARKK. It used this money to buy more sci-fi ARKK stocks, pushing up the prices of its holdings. This created a vicious cycle that has now reversed.
With stocks down around 20% year-to-date, it is important for investors to know what kind of bear they are dealing with.
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
Rising inflation, rate hikes, supply-chain problems and the Russia-Ukraine war have contributed to growing recession fears.
I have identified a few opportunities within my portfolio and wealth management practice that prompt consideration for your own strategies as you plan for large estates.
Wall Street is afraid to buy the dip this time around. Even amid this latest leg of the stock market selloff, equities still aren’t fully reflecting the risks facing corporate earnings...
With the Q1 GDP Second Estimate and the May close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 205.1%, down from 216.4% the previous quarter.
New research shows that positive returns to ESG portfolios from 2018-2020 were attributed to increased demand for “green“ stocks, raising the question of whether that outperformance will be sustained.
Energy has been on quite a run.
Those who are familiar with my articles know that I see market crashes in stocks and bonds occurring in this decade, combined with serious inflation. Readers ask how I recommend protecting. This is it.
I have been doing this long enough to know that the economy is a complex, self-adjusting mechanism, and thus the grim picture I have painted in this and previous articles may not play out.
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns.
Academics argue that there are three proven factors of investing: Value, quality and momentum.
We are excited to start sharing the thought process of Erlanger Research on Advisor Perspectives as perspectives and unique views are something that there is no shortage of in our shop
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $15,778 for an annualized real return of 9.2%.
Here is a summary of the four market valuation indicators we update on a monthly basis.
New research quantifies the implicit cost that investors incur when index funds, such as those tracking the S&P 500, are rebalanced. Those costs may be avoidable by adopting trading strategies that introduce the possibility of tracking error.
Note: This update includes May close data.
Is long-term strategic investing out the window? To earn returns in today’s market, you need a team that will rethink your investment philosophy and strategy.
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month.
Sharp, countertrend rallies may continue this year, but aggressive Fed policy, the turning of the liquidity tide, and slower economic growth will likely keep pressure on stocks.
Welcome to another subscriber request where I will cover 42 stocks.
A fascinating aspect of the financial markets is that long-term returns are driven almost entirely by math, while short-term returns are driven almost entirely by psychology.
Last week’s rising stock prices suggested that many investors are still wishing the Federal Reserve will step in to counter downward pressures on the market. Hopes for this “Fed put,” however, may be confusing the Fed’s willingness to act with its ability to do so.
Quick take: At the end of May the inflation-adjusted S&P 500 index price was 131% above its long-term trend, down from 151% above the previous month.
About the only certainty in the stock market is that, over the long haul, over performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.
The tale of Bear Stearns’ rally and investors' myopic vision in the spring of 2008 is a valuable lesson for today.
Was the March 2009 low the end of a secular bear market and the beginning of a secular bull?
Valid until the market close on June 30, 2022.
The S&P 500 closed May with a monthly gain of 0.01% after a loss of 8.8% in April. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — Vanguard REIT Index ETF (VNQ), iShares Barclays 7-10 Year Treasury (IEF) and Vanguard All-World Index ex-US ETF (VEU), and Vanguard Total Stock Market ETF (VTI) — unchanged from last month's quadruple "cash" signal.
Investors in Bitcoin and other digital assets have been pummeled recently by the longest losing streak since 2011.
There are costs to living a virtuous life; It requires going without.
They are creations of easy credit, beneficiaries of central bank largesse. And now that the era of unconventional monetary policy is over, they’re facing a challenge like never before.
High inflation has captured the headlines as of late particularly as CPI recently hit the highest levels since 1981.
There’s a silver lining to the current bear market…
Our fiscal deficit, as measured by the debt-to-GDP ratio, has grown to levels that could impede growth, as predicted by financial theory and confirmed by empirical evidence. Moreover, new research shows that our burgeoning deficit could increase risk premiums for both stocks and bonds.
The disinflationary impact of Fed policy on equities is coming.
The war in Ukraine will pour more gasoline on the already raging inflationary fire, threatening to send the global economy into stagflation. Stagflation is a slowdown of economic activity caused by inflation.
Investors’ expectations that interest rates will not rise much may be very misguided.
With the Federal Reserve releasing minutes from its latest meeting on Wednesday, traders are looking for further details on the plans to let billions of dollars worth of bonds to mature each month without replacing them.
Recent warnings from corporate executives and rapidly declining regional manufacturing surveys make me wonder if a recession has already started.
Treasury Inflation-Protected Securities, or TIPS, can help protect against inflation over the long run, but in the short term their performance may be dictated more by price declines in the secondary market.
In the face of bad news, what, if anything, should you do to adjust your long-term portfolio management strategy?
U.S. equities are trading lower in afternoon action with the markets unable to extend yesterday's solid gains.
Liquidity is the lifeblood of the capital markets. It is the ease at which an asset can be turned into cash without disrupting the price of that asset. This was never really a concern in the US, whose markets are prized for being the deepest, most liquid in the world. It’s one reason why the dollar is the world’s dominant reserve currency.
Russia’s blockade of Ukraine’s ports is a “declaration of war” that threatens to trigger mass migration and a global food crisis, a United Nations official said, adding to the dire warnings on the opening day of the World Economic Forum in Davos.
Value investors love recessions because they intelligently recognize that recessions bring opportunity.
Scott Minerd, Guggenheim Partners Global CIO, joins CNBC to share his views on the consequences of aggressive Federal Reserve tightening.
"The bear is coming! The bear is coming!" Indeed, it is. Should you be worried?
Stocks start the week higher following recent bearishness.
Investing during a recession can be a very difficult, and often dangerous, prospect.
Policymakers and forecasters were slow to change their mindset about inflation.
At least a couple of major retailer stocks got clobbered last week as investors sold on reports that they missed earnings estimates.
While conventional wisdom says that rising interest rates are bad for stocks, it’s more accurate to say that rising rates tend to be bad for certain types of stocks.
Shiller’s CAPE ratio is the most-cited predictor of long-term equity returns. But new research shows that the “Buffett” indicator does a good job of forecasting, and both ratios predict subdued, long-term returns for stocks.
Volatility is the standard measure used by advisors to measure risk. It has been useful but has limitations. There are ways that volatility will not provide an accurate representation of the risk of an investment portfolio.
Wherever you get your news, there's no escaping the perception that rising prices are breaking the US economy. Recession is almost a foregone conclusion on the Bloomberg terminal, which aggregates 150,000 news sources with every bulletin categorized and counted. Headlines with the word “inflation,” increased 345% to 186,000 times a month since the beginning of 2020, while “strong economy” declined 48% to 1,766 times monthly.
The US economy is starting to show signs of strain under the weight of decades-high inflation and climbing interest rates -- raising the risk of a downturn.
A fatal shortcoming lies beneath the academic papers that have relied upon “back-testing” to promote the 4% rule. Use our Premium membership service to add your logo and send this to clients.
There are thousands of mutual funds that offer to select stocks and bonds for your portfolio. But which ones are right for you? Use our Premium membership service to add your logo and a note from you and forward it to your clients.
Tesla has grown into a $735 billion company on the back of its breakthrough electric-vehicle engineering. Its own carbon footprint is a small fraction of its peers, and its success in the market has pushed the industry overall away from gas-powered vehicles.
Take a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite since 2000. We've updated this through the April 29, 2022 close.
Historical data shows that stock markets have reacted poorly when the Fed has contracted its balance sheet and reduced liquidity – and the effect is more pronounced when Fed actions deviate from what the market expects.
The launch of the S&P 500 ESG Index in April 2019 signaled an evolution in sustainable investing. The S&P 500 ESG Index was built to underlie strategic, long-term mainstream investment products. Intentionally broad, the index seeks to maintain similar overall industry group weights as the benchmark, while providing an improved sustainability profile.This paper outlines the following index characteristics:
In 1995, Treasury Secretary Robert Rubin asserted that a strong dollar is in the US national interest, a mantra repeated by each of his successors. They’re partially correct since the effects of the robust buck, which has soared this year, help some while harming others.
Surging inflation showed little sign of abating last month, indicating that grocery bills will keep going up, markets will remain volatile and investors will continue to feel pain in their 401(k)s.
The latest US inflation report should be a reality check for Wall Street, but many investors are still wearing rose-colored glasses. Bond yields ticked slightly higher Wednesday after the Labor Department reported that consumer prices rose more than forecast last month, but they are still nowhere near reflecting the monetary policy path it may take to rein in inflation.
The latest full set UIG for April is 4.86% while the prices-only measure is 5.79%. Current Headline CPI is now 8.26% and Core CPI is 6.16%.
Liquidity is fading due to the Fed, and therefore volatility is on the rise. Illiquid and volatile markets are not conducive to long-term wealth generation.
Problems occur when a market shift reduces investment opportunities after a period when investor capital has been scaled up. The current climate portends such a shift.
To achieve its mission of reducing inflation, the Fed will keep raising rates, according to Albert Edwards, and won’t stop before the S&P 500 hits 3,000.
The historical data has shown that the value premium is smaller for large-cap securities than for small caps. But new research shows that large-cap investors can increase the premium by pursuing an equal-weighted strategy.
Elon Musk, Marc Andreessen and Cathie Wood have spent the past few days on Twitter exchanging ideas about how investing and financial markets work — all in the name of liberating small-fry investors from elite giants that manage and peddle index funds.
The Fed is on a single-minded mission to fight inflation, according to Jim Bianco. To do that, it will crush stock prices and home values.
The U.S. economy will be in recession in the second half of this year, according to David Rosenberg. Equity Investors should brace for a 30% bear market decline.
Buying stocks is easy; the hard part is knowing when to sell.
In an ambitious new book, the economist Andrew Smithers rejects core “Newtonian” principles of economics, replacing them with radical departures from conventional wisdom. But as I will explain, some of Smithers’ theories fail meet the standard of empirical verification.
Investors seeking higher yields and relatively low risk, and are willing to sacrifice liquidity, will find attractive opportunities in interval funds that invest in senior secured, middle-market loans, such as those offered by Cliffwater.
If you think it has been painful that the market has been down each of the past four weeks, your nest egg hasn’t seen anything yet.
My good friend Ben Hunt of Epsilon Theory has written what I think is one of his most powerful letters ever. He’s basically saying the Fed just isn’t going to make it. I wish I had written it. He is such a wordsmith. With that, let’s turn it over to Ben.
Imagine that you have joined some friends for a day of fishing. About two miles offshore, you sense that something is wrong. The small, single engine boat’s handling has changed. There seems to be more. Use our premium service to add your company’s logo and send this to clients.
Markets don’t have feelings or morals. They do not care what an investor needs and there is no investment or strategy that has consistently provided returns well in excess of those earned in the broad markets. Use our premium service to add your company’s logo and send this to clients.
In a market environment of low bond yields and record high equity valuations, it’s time to look beyond simple asset-class diversification. A covered call strategy could provide clients with potential for growth, income and downside protection.
Russ Koesterich, Managing Director and Portfolio Manager of the Global Allocation team, discusses the case for the cheaper segments of growth stocks.
In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. But the BOJ could unleash a liquidity vacuum felt around the world.
Our view is that the equity market is in a tug of war between a good earnings tailwind and a modest valuation headwind.
S&P 500
Margin Debt: Down 2.6% in May
FINRA has released new data for margin debt, now available through May. The latest debt level is down 2.6% month-over-month.
S&P 500 Snapshot: Steady End to the Week
The S&P 500 opened Friday higher than its Thursday close and stayed steady throughout the day. The index is up 3% from Thursday, is 18.5% below its record close, and is down 17.9% YTD.
This is Not the Market Bottom
Two forecasting methods predict a 54% stock market loss in 2022. Someday the stock market bubble will burst. But the data says we have not seen the worst of equity market declines.
Why I Consulted with an Active Fund Manager
Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.
Why Insiders Are Bullish When Nobody Else Is
Crypto meltdowns. Tech implosions. The biggest rate hike in decades.
15 Stocks You Asked To See
I often say that it is a market of stocks and not a stock market.
ARKK Stocks Sunk
The better ARK performed, the more money flowed into its main ETF, ARKK. It used this money to buy more sci-fi ARKK stocks, pushing up the prices of its holdings. This created a vicious cycle that has now reversed.
Bear Watch
With stocks down around 20% year-to-date, it is important for investors to know what kind of bear they are dealing with.
Will the Fed’s Third Mandate Derail Markets?
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
Signs Point to Rising Recession Risk
Rising inflation, rate hikes, supply-chain problems and the Russia-Ukraine war have contributed to growing recession fears.
Opportunities in Tax Efficiency
I have identified a few opportunities within my portfolio and wealth management practice that prompt consideration for your own strategies as you plan for large estates.
Wall Street Sours on S&P as Margin Woes Rattle Corporate America
Wall Street is afraid to buy the dip this time around. Even amid this latest leg of the stock market selloff, equities still aren’t fully reflecting the risks facing corporate earnings...
Market Cap to GDP: May Buffett Valuation Indicator
With the Q1 GDP Second Estimate and the May close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 205.1%, down from 216.4% the previous quarter.
Sobering News for ESG Investors
New research shows that positive returns to ESG portfolios from 2018-2020 were attributed to increased demand for “green“ stocks, raising the question of whether that outperformance will be sustained.
I’m Buying Another Dirt-Cheap Energy Stock
Energy has been on quite a run.
How I Protect Against the Coming Market Crash
Those who are familiar with my articles know that I see market crashes in stocks and bonds occurring in this decade, combined with serious inflation. Readers ask how I recommend protecting. This is it.
Stagflation May Be Our Next Stop (but that is not what I am worried about)
I have been doing this long enough to know that the economy is a complex, self-adjusting mechanism, and thus the grim picture I have painted in this and previous articles may not play out.
May 2022: Market Valuation, Inflation and Treasury Yields
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns.
When Quality Fails
Academics argue that there are three proven factors of investing: Value, quality and momentum.
Why Didn't I Sell Advanced Micro?
We are excited to start sharing the thought process of Erlanger Research on Advisor Perspectives as perspectives and unique views are something that there is no shortage of in our shop
The Latest Look at the Total Return Roller Coaster
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $15,778 for an annualized real return of 9.2%.
Is the Market Still Overvalued?
Here is a summary of the four market valuation indicators we update on a monthly basis.
The Problems with Market-Cap Weighted Index Funds
New research quantifies the implicit cost that investors incur when index funds, such as those tracking the S&P 500, are rebalanced. Those costs may be avoidable by adopting trading strategies that introduce the possibility of tracking error.
The Q Ratio and Market Valuation: May Update
Note: This update includes May close data.
Staying the Course No Longer Works?
Is long-term strategic investing out the window? To earn returns in today’s market, you need a team that will rethink your investment philosophy and strategy.
P/E10: May 2022 Update
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month.
2022 Mid-Year Outlook: U.S. Stocks and Economy
Sharp, countertrend rallies may continue this year, but aggressive Fed policy, the turning of the liquidity tide, and slower economic growth will likely keep pressure on stocks.
It’s a Market of Stocks Not a Stock Market
Welcome to another subscriber request where I will cover 42 stocks.
Making Friends with Bears Through Math
A fascinating aspect of the financial markets is that long-term returns are driven almost entirely by math, while short-term returns are driven almost entirely by psychology.
Don’t Wish for the Fed to Pause Rate Hikes in September
Last week’s rising stock prices suggested that many investors are still wishing the Federal Reserve will step in to counter downward pressures on the market. Hopes for this “Fed put,” however, may be confusing the Fed’s willingness to act with its ability to do so.
Regression to Trend: 131% Above Trend in May
Quick take: At the end of May the inflation-adjusted S&P 500 index price was 131% above its long-term trend, down from 151% above the previous month.
About the only certainty in the stock market is that, over the long haul, over performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.
Bear Stearns: A Lesson in Bear Market Bounces
The tale of Bear Stearns’ rally and investors' myopic vision in the spring of 2008 is a valuable lesson for today.
A Perspective on Secular Bull and Bear Markets
Was the March 2009 low the end of a secular bear market and the beginning of a secular bull?
Moving Averages: S&P Inched Up in May
Valid until the market close on June 30, 2022.
The S&P 500 closed May with a monthly gain of 0.01% after a loss of 8.8% in April. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — Vanguard REIT Index ETF (VNQ), iShares Barclays 7-10 Year Treasury (IEF) and Vanguard All-World Index ex-US ETF (VEU), and Vanguard Total Stock Market ETF (VTI) — unchanged from last month's quadruple "cash" signal.
Crushed by Crypto Losses? Here Are Some Tax Tips.
Investors in Bitcoin and other digital assets have been pummeled recently by the longest losing streak since 2011.
The Virtue Bubble Is About to Burst. Good Riddance.
There are costs to living a virtuous life; It requires going without.
Zombie Firms Face Slow Death in US as Era of Easy Credit Ends
They are creations of easy credit, beneficiaries of central bank largesse. And now that the era of unconventional monetary policy is over, they’re facing a challenge like never before.
High Inflation May Already Be Behind Us
High inflation has captured the headlines as of late particularly as CPI recently hit the highest levels since 1981.
Three Stocks to Buy in This Bear
There’s a silver lining to the current bear market…
The Growing Threat Posed by the Federal Deficit
Our fiscal deficit, as measured by the debt-to-GDP ratio, has grown to levels that could impede growth, as predicted by financial theory and confirmed by empirical evidence. Moreover, new research shows that our burgeoning deficit could increase risk premiums for both stocks and bonds.
The Disinflationary Impact Of Fed Policy On Equities
The disinflationary impact of Fed policy on equities is coming.
Six Reasons Inflation is So High
The war in Ukraine will pour more gasoline on the already raging inflationary fire, threatening to send the global economy into stagflation. Stagflation is a slowdown of economic activity caused by inflation.
On My Mind: Overdue Reality Check for Fed and Markets Has Barely Begun
Investors’ expectations that interest rates will not rise much may be very misguided.
Fed’s Balance-Sheet Unwind Puts Treasuries on ‘Uncertain’ Path
With the Federal Reserve releasing minutes from its latest meeting on Wednesday, traders are looking for further details on the plans to let billions of dollars worth of bonds to mature each month without replacing them.
Snap Goes the Economy
Recent warnings from corporate executives and rapidly declining regional manufacturing surveys make me wonder if a recession has already started.
Are TIPS Worth Considering Now?
Treasury Inflation-Protected Securities, or TIPS, can help protect against inflation over the long run, but in the short term their performance may be dictated more by price declines in the secondary market.
In Volatile Markets, Patience is Your Friend
In the face of bad news, what, if anything, should you do to adjust your long-term portfolio management strategy?
Schwab Market Update: Markets See Pressure Amid Disappointing Data
U.S. equities are trading lower in afternoon action with the markets unable to extend yesterday's solid gains.
The Next Crisis to Hit Markets May Be About Liquidity
Liquidity is the lifeblood of the capital markets. It is the ease at which an asset can be turned into cash without disrupting the price of that asset. This was never really a concern in the US, whose markets are prized for being the deepest, most liquid in the world. It’s one reason why the dollar is the world’s dominant reserve currency.
Russian Port Sieges ‘Declaration of War,’ UN Says
Russia’s blockade of Ukraine’s ports is a “declaration of war” that threatens to trigger mass migration and a global food crisis, a United Nations official said, adding to the dire warnings on the opening day of the World Economic Forum in Davos.
Recessions Bring Opportunity – The Risk Lies In How You React To It
Value investors love recessions because they intelligently recognize that recessions bring opportunity.
“A Season of Pain”
Scott Minerd, Guggenheim Partners Global CIO, joins CNBC to share his views on the consequences of aggressive Federal Reserve tightening.
Should You Be Afraid of a Bear Market?
"The bear is coming! The bear is coming!" Indeed, it is. Should you be worried?
Today's Options Market Update
Stocks start the week higher following recent bearishness.
The Right Strategy Is Critical When Investing During A Recession!
Investing during a recession can be a very difficult, and often dangerous, prospect.
How Inflation Went From Dormant To Dominant
Policymakers and forecasters were slow to change their mindset about inflation.
Unprecedented
At least a couple of major retailer stocks got clobbered last week as investors sold on reports that they missed earnings estimates.
The Case for Quality Stocks Now
While conventional wisdom says that rising interest rates are bad for stocks, it’s more accurate to say that rising rates tend to be bad for certain types of stocks.
The “Buffett Indicator” Predicts Historically Low Long-Term Equity Returns
Shiller’s CAPE ratio is the most-cited predictor of long-term equity returns. But new research shows that the “Buffett” indicator does a good job of forecasting, and both ratios predict subdued, long-term returns for stocks.
Why Volatility is the Wrong Measure of Investment Risk
Volatility is the standard measure used by advisors to measure risk. It has been useful but has limitations. There are ways that volatility will not provide an accurate representation of the risk of an investment portfolio.
Stagflation Is Looming, Right? Wrong, Economists Say
Wherever you get your news, there's no escaping the perception that rising prices are breaking the US economy. Recession is almost a foregone conclusion on the Bloomberg terminal, which aggregates 150,000 news sources with every bulletin categorized and counted. Headlines with the word “inflation,” increased 345% to 186,000 times a month since the beginning of 2020, while “strong economy” declined 48% to 1,766 times monthly.
Cracks in US Economy Start to Show as Recession Warnings Mount
The US economy is starting to show signs of strain under the weight of decades-high inflation and climbing interest rates -- raising the risk of a downturn.
Don’t Believe in the “Safe Withdrawal Rate”
A fatal shortcoming lies beneath the academic papers that have relied upon “back-testing” to promote the 4% rule. Use our Premium membership service to add your logo and send this to clients.
How to Tell if a Fund is All it Claims to Be
There are thousands of mutual funds that offer to select stocks and bonds for your portfolio. But which ones are right for you? Use our Premium membership service to add your logo and a note from you and forward it to your clients.
Tesla’s Removal From S&P Index Sparks Debate About ESG Ratings
Tesla has grown into a $735 billion company on the back of its breakthrough electric-vehicle engineering. Its own carbon footprint is a small fraction of its peers, and its success in the market has pushed the industry overall away from gas-powered vehicles.
The S&P 500, Dow and Nasdaq Since Their 2000 Highs
Take a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite since 2000. We've updated this through the April 29, 2022 close.
Beware the Fed’s Balance Sheet Unwinding
Historical data shows that stock markets have reacted poorly when the Fed has contracted its balance sheet and reduced liquidity – and the effect is more pronounced when Fed actions deviate from what the market expects.
The S&P 500 ESG Index: Defining the Sustainable Core
The launch of the S&P 500 ESG Index in April 2019 signaled an evolution in sustainable investing. The S&P 500 ESG Index was built to underlie strategic, long-term mainstream investment products. Intentionally broad, the index seeks to maintain similar overall industry group weights as the benchmark, while providing an improved sustainability profile.
This paper outlines the following index characteristics:
The Rising Dollar Is Wreaking Havoc With US Trade
In 1995, Treasury Secretary Robert Rubin asserted that a strong dollar is in the US national interest, a mantra repeated by each of his successors. They’re partially correct since the effects of the robust buck, which has soared this year, help some while harming others.
How to Save Your Budget With Inflation Running Hot
Surging inflation showed little sign of abating last month, indicating that grocery bills will keep going up, markets will remain volatile and investors will continue to feel pain in their 401(k)s.
Market Is Still in the Denial Stage About Inflation
The latest US inflation report should be a reality check for Wall Street, but many investors are still wearing rose-colored glasses. Bond yields ticked slightly higher Wednesday after the Labor Department reported that consumer prices rose more than forecast last month, but they are still nowhere near reflecting the monetary policy path it may take to rein in inflation.
Underlying Inflation Gauge: April Update
The latest full set UIG for April is 4.86% while the prices-only measure is 5.79%. Current Headline CPI is now 8.26% and Core CPI is 6.16%.
Watch Out: The Fed is Removing Liquidity from the Markets
Liquidity is fading due to the Fed, and therefore volatility is on the rise. Illiquid and volatile markets are not conducive to long-term wealth generation.
Cathie Wood and the Sound of a Changing Market
Problems occur when a market shift reduces investment opportunities after a period when investor capital has been scaled up. The current climate portends such a shift.
Albert Edwards: The Fed Put is 3,000 on the S&P 500
To achieve its mission of reducing inflation, the Fed will keep raising rates, according to Albert Edwards, and won’t stop before the S&P 500 hits 3,000.
Good News for Large-Cap Value Investors
The historical data has shown that the value premium is smaller for large-cap securities than for small caps. But new research shows that large-cap investors can increase the premium by pursuing an equal-weighted strategy.
Wood and Musk Turn Into Dumb Money on Index Investing
Elon Musk, Marc Andreessen and Cathie Wood have spent the past few days on Twitter exchanging ideas about how investing and financial markets work — all in the name of liberating small-fry investors from elite giants that manage and peddle index funds.
Jim Bianco: The Fed Will Crush Inflation and with it, the Stock Market
The Fed is on a single-minded mission to fight inflation, according to Jim Bianco. To do that, it will crush stock prices and home values.
David Rosenberg: Recession in 2022 Will Drive a Bear Market
The U.S. economy will be in recession in the second half of this year, according to David Rosenberg. Equity Investors should brace for a 30% bear market decline.
Buying Stocks Is Easy, Selling Is The Hard: 7 Rules to Manage Risk
Buying stocks is easy; the hard part is knowing when to sell.
Is a Rejection of Classical Finance Justified?
In an ambitious new book, the economist Andrew Smithers rejects core “Newtonian” principles of economics, replacing them with radical departures from conventional wisdom. But as I will explain, some of Smithers’ theories fail meet the standard of empirical verification.
Private Direct Lending Offers Attractive Yields
Investors seeking higher yields and relatively low risk, and are willing to sacrifice liquidity, will find attractive opportunities in interval funds that invest in senior secured, middle-market loans, such as those offered by Cliffwater.
Feasting on Fed Stimulus is Over for Stock Investors
If you think it has been painful that the market has been down each of the past four weeks, your nest egg hasn’t seen anything yet.
The Fed Is NGMI
My good friend Ben Hunt of Epsilon Theory has written what I think is one of his most powerful letters ever. He’s basically saying the Fed just isn’t going to make it. I wish I had written it. He is such a wordsmith. With that, let’s turn it over to Ben.
The Income Annuity is the Constrained Investor’s Life Jacket
Imagine that you have joined some friends for a day of fishing. About two miles offshore, you sense that something is wrong. The small, single engine boat’s handling has changed. There seems to be more. Use our premium service to add your company’s logo and send this to clients.
Market Timing: A Fool's Game
Markets don’t have feelings or morals. They do not care what an investor needs and there is no investment or strategy that has consistently provided returns well in excess of those earned in the broad markets. Use our premium service to add your company’s logo and send this to clients.
Beyond The Traditional 60/40 Portfolio
In a market environment of low bond yields and record high equity valuations, it’s time to look beyond simple asset-class diversification. A covered call strategy could provide clients with potential for growth, income and downside protection.
Why Recession Chatter Benefits Garp
Russ Koesterich, Managing Director and Portfolio Manager of the Global Allocation team, discusses the case for the cheaper segments of growth stocks.
Liquidity Crisis in the Making – Japan's Role in Financial Instability
In propping up Japan's economy and financial markets, its central bank indirectly provided liquidity to the world's financial markets. But the BOJ could unleash a liquidity vacuum felt around the world.
10 Predictions for 2022
Our view is that the equity market is in a tug of war between a good earnings tailwind and a modest valuation headwind.