The yield on global investment grade bonds has recently touched an all-time low of 1.1%, with over 30% of the world’s government bonds paradoxically trading at yields below zero.1 Read more
The most famous Presidential Election Cycle Theory, first postulated by Yale Hirsch in the 1968 Stock Trader’s Almanac, suggests there is a prominent 48-month stock market cycle that corresponds to the four-year Presidential term.
Recently, we did our own analysis; what effect does the Presidential cycle have on stocks, and should we be paying attention? Read more
It takes courage and patience to invest in stocks. Fortunately, those investors who possess these characteristics have usually been compensated for their efforts.
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Since the end of 2007, U.S. stocks have beat their international counterparts by 7.5% annually, and the U.S. share of the MSCI ACWI index grew from 42% to 52%.1 Read more
By November 3rd, the U.S. government will run out of cash. Again.
Judging from the U.S. government shutdowns of 1995-1996 and the debt ceiling crises of 2011 and 2013, we might be tempted to assume that this year’s debt crisis will follow the same tried-and-true storyline: A few weeks of dramatic fiscal brinksmanship, followed by a bold yet pragmatic budget deal. Read more
The Securities and Exchange Commission (SEC) has proposed a set of reforms that seek to enhance liquidity risk management by open-end funds such as mutual funds and exchange-traded funds (ETFs). The proposed rules would require mutual funds and ETFs to implement liquidity risk management programs and enhanced disclosures regarding fund liquidity and redemption practices. Read more
In the field of investing, a great deal of thinking has historically been based on the idea that markets naturally mean-revert to “normal” levels. For example, when commodity prices are high, we expect new supplies will be brought on line to bring prices down. And when stock prices are low, we expect new buyers will enter the market and drive prices up. In this mean-reverting paradigm, investors expect the future to be largely a product of the past. Read more
In recent months, the U.S. dollar’s exchange rate has appreciated by 5-10% against other major currencies. Read more
Looking over the past 35+ years of U.S. stock market index data, we notice two interesting facts: Read more
The “random walk” is a theory postulating that stock prices evolve randomly and cannot be predicted. A Random Walk Down Wall Street, by Princeton economics professor Burton G. Malkiel, made the theory famous by suggesting that a coin flip would be as accurate as most stock picking strategies.
On August 25th, investors cheered as the S&P 500 Index rallied and touched 2,000 for the first time, pushing stocks’ year-to-date return up toward 9%.
But then, for the next seven trading days, something very unusual happened. Read more