Growth versus value. For many years, that was one of the central debates for investors, analysts, managers, and financial advisors. Growth and value stocks seemed to be the yin and yang of stock investing, with radically different characteristics that attracted investors with different temperaments.
Read moreInvestors Can Afford to Take on More Risk
Risk. Mention the word, and many investment professionals pause. Traders, hedge funds, and a few quantitative firms and their algorithms may love risk. But these days, the preponderance of investors, advisors, strategists, and their clients—not to mention the individual investor
Read moreBitcoin: Buy or Buyer Beware?
Bitcoin has a total market capitalization of barely $45 billion, which is a pittance compared to hundreds of trillions in stocks, bonds, and other financial instruments worldwide. And yet advisors report that Bitcoin is among investors' most prevalent curiosities today.
Read moreIs FANG Taking Too Big a Bite Out of the Market?
With the S&P 500 up nearly 10% for the year through mid-June, many investors are nervous about what lies ahead. Even more nerve-wracking is that an outsized portion of the total returns have been generated by just a few stocks.
Read moreWhen Investing, Ignore Washington Tea Leaves
We are now four months into the Trump administration, and the Washington soap opera is in no immediate danger of cancellation. Aside from a few brief selloffs, markets have been chugging along on a different track, largely shrugging off political drama.
Read moreTake Advantage of Calm to Rejigger Investments
After a dramatic start to the year, with equities rallying worldwide and bond yields rising in anticipation of stronger economic growth, markets have entered one of those eerie calm periods whose very placidity tends to spook investors. It’s springtime, and while the weather becomes progressively milder, investors seem less certain than ever.
Read moreBull Or Bear: Should Investors Still Care?
Not a day goes by without hearing what appears to be the predominant question for investors, namely, When will stocks come back down to earth? Variants of that query include, Isn’t this bull market getting long in the tooth? And, stocks go up and up, so we must be on the verge of a selloff, right?
Read moreTake Advantage of Shift From Bonds to Stocks
For several years, investors have anticipated a “great rotation” from bonds into equities, and for several years, they were dead wrong. In fact, even as equities were quietly rising for the past years, both domestic and international money has continued to surge into bonds. At long last, that is beginning to reverse, which demands a reconsideration of strategies that seemingly have worked so well and so easily for so long. As long as bond prices were rising, pouring money into assets that had a certain return looked like a slam dunk. No longer.
Read moreMaking the Most of a ‘Placid’ Market
At long last, the presidential election of 2016 is entering its final stages. In one form or another, this election has occupied an outsized place in American life since the middle of 2015, by far the longest and most extensive political campaign we’ve ever experienced. Much of this campaign season’s noise will have little impact on markets, the economy, interest rates, economic growth, or the fate of companies. In many respects, there is an inverse relationship between the furor of this election and its clear impacts—particularly if Hillary Clinton and the Democrats win.
Read moreDiversification is the Winning Ticket in 2016
Recent volatility notwithstanding, what has been striking about 2016 as an investing year is how relatively good it has been. In fact, the return on a diversified portfolio this year is competitive with many major asset classes, and has restored (for now) some confidence in the age-old mantra of diversification being among the most prudent of investing strategies.
Read moreIn Valuing Stocks, Don’t Get Lost in the Past
As stocks climb to new highs, many investors are concerned about whether today’s equity valuations are reasonable. But the debate over valuations and whether equities are frothy often misses a key element: nothing exists in a vacuum.
Read moreInvestors Should Focus on Hitting Singles
It is a time-honored tradition in the world of investing to use sports clichés. Yes, it’s a cop out, a failure of collective imagination, but rather than fight it just now, we are going to jump on that bandwagon. And not just sports clichés; we’re going to embrace all clichés—after all, most clichés have a real kernel of truth.
Read moreWhy Trump, Hillary Will Not Take Down the Market
In this election cycle, will investors be winners or losers? Let’s just get this out of the way: the bulk of this year will be consumed by election noise. There is no way around that. That noise, in turn, will drive out other stories, unless there is a major disruptive event (a terrorist attack, such as the recent one in Brussels, a natural disaster, unexpected political upheaval in the world, or expectations of a possible Brexit coming to fruition). That noise also will subtly influence investors’ behavior, or at least how they view the world. There is no way to avoid that.
Read moreIn a Low-Growth World, Forget About 10% Returns
Step away from the intense bouts of volatility that recently have characterized financial markets, and an important trend emerges that is unsettling investors large and small. With few exceptions, investments simply are not generating the average annual returns that they’ve come to expect.
Read moreRelax, Folks. We’re in a Normal Correction.
In case you have been otherwise engaged, it will not come as news that this has been a month marked by market turmoil. As far too many commentators and analysts have emphasized, the first two weeks of the year marked the worst start for U.S. equity markets ever. The Standard & Poor’s 500 was down 8% in the first 10 days of trading.
Read moreMarket Stresses in 2015 Can Have Good Outcome
For the past few months, financial markets have been positioning for a change in Federal Reserve policy to move from “very easy and accommodative” to “easy and accommodative.” The decision of the Fed, finally, to raise short-term lending rates by 25 basis points was met with relief that months of will-they won’t-they were finally over. At the same time, the energy and commodity complex has continued to melt down as prices plummet. The result has been both an unusual amount of turmoil in fixed income markets and a rising chorus of voices anxiously drawing parallels to 2008-2009.
Read moreAre Robo Portfolios Ready for Black-Swan Events?
We’ve seen a significant move away from how most people invested in the 20th century—actively and with the at times costly advice and direction of advisors and brokers—towards a more digitally enhanced, passively implemented set of strategies. Some of that trend is inevitable and a useful addition to the suite of options. But as we have said, and continue to maintain, the rush toward passive investing is not without issues, and it must be balanced. There can be too much of a good thing. Today’s rush towards passive, ultra-low cost investing solutions must be tempered with questions: What is being gained? What potentially could be lost?
Read moreEmerging-Market Woes Are Greatly Exaggerated
n August, equity markets finally displayed the volatility that many had been anticipating. Other asset classes, including currencies, high-yield and emerging market bonds, and, of course, energy and commodities, had roiled throughout the year. But equities had been largely immune—until the past month.
Read moreThe Virtues of This Boring U.S. Stock Market
So here we are, more than halfway through the year, and although there has been no dearth of daily news, it’s been remarkably static for many investments, particularly U.S. equities. Some sectors — energy and commodities above all — have been spectacularly weak as the global economy continues to adjust to massive supply and demand shifts, especially lower demand from China. A few sectors, notably technology, have done quite well, with several technology indexes up close to 10% year-to-date. But in aggregate, U.S equities have had one of their least volatile and least interesting six month periods in a very long while.
Read moreThe Right Way to Handle a Market Storm
If it seems as though we have focused on crises in Europe for years, that’s because we have. The seemingly endless impasses of Greece and its possible spillover effects on the rest of Europe and then, by extension, on the global financial system, have beset markets and investors for nearly six years.
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