After hitting an all-time low in 2017, investor expectations of stock market volatility have started to rise this year. While these market jitters are at least partly due to eventful headlines, there’s another, more fundamental explanation that may be playing a role: The Federal Reserve’s decision to reduce its bond holdings may be contributing to increased volatility in the stock market. Read more
Seventy-six percent of the 174 U.S. initial public offerings (IPOs) in 2017 were of companies with earnings less than zero. While it’s not unusual for unprofitable companies to go public, this is the highest level we’ve seen since 2000, and equal to the second-highest year of 1999.
There are nearly 20,000 U.S. equity mutual funds in the market, and about 2,300 ETFs. The irony is that there are only 3,492 U.S.-headquartered companies that are publicly traded, active, and available for investment (as of 12/31/17). This means there are more than six times as many equity products as there are equities! Read more
Click this link to view a larger image: impact infographic
When market returns are attractive, as they have been for the last several years, the lure of passive investing is strong. After all, who wouldn’t want to capture market returns when the market is booming? (Passive investments, or index funds, closely mirror indexes in order to provide investors with broad market exposure at a generally lower cost than actively managed funds.) Passive investing can serve a purpose in a portfolio, particularly in more efficient asset classes, but investors should be aware of the pitfalls of overusing passive investment strategies, as outlined below. Read more
President Trump signed sweeping tax legislation last month and the changes will impact investors in a variety of ways. Here, we address some of the changes you may want to discuss with your accountant in 2018. Read more
When things have been good for a long time in the market, the human mind naturally adjusts and builds its idea of “normal” around the current environment. This “new normal” sets the stage for future decision-making. But beware of this tendency, because it can be deceptive! Since it’s impossible to predict future market movements, investors should base their strategy on a long-term plan, not on the current environment. Read more
With the recent passage of the Tax Cuts and Jobs Act of 2017, the United States no longer has the highest top corporate tax rate among the world’s advanced economies.
Arnerich Massena’s year-end 2017 MarketCast is available for viewing. In this MarketCast, senior research analyst Arthur Coyne, CFA, discusses global economic trends and events over 2017. To view the MarketCast, visit http://arnerichmassena.com/Research-Resources/http://arnerichmassena.com/Research-Recources/. Read more