Looking back at 2023, one thing we can reflect on is the winding road we navigated along the way. The last several years we’ve had alternating results and abnormal returns. In 2020, the S&P fell more than 33% before recovering before year’s end to finish up 18%. In 2021, the...
One of the largest competitors to the stock and bond markets is real estate. In the United States alone, real estate is worth $47 trillion in June 2023, according to Benoit Properties.1 Owning real estate has been the cornerstone of the American Dream since the Pilgrims landed four hundred years...
“Throughout history, whenever most investors believed the worst about a particular asset class, such has often been the right time to start buying. As we have often discussed, psychological behaviors account for as much as 50% of the reasons investors consistently underperform the markets...
“We’re aware of the risk that we would hang on too long. We’re very focused on not making that mistake.”
- Jerome Powell, Fed Chairman
Less than two months ago, I wrote to clients that the pivot was coming over the next year. Little did I know it was coming in...
The Fed kept rates at current levels at their meeting this week, but whether they are done with their tightening or not is yet to be determined. If there is one more hike (or even two), it doesn’t really matter at this point.
Monetary policy is now extremely restrictive and while it takes...
The melodrama continues in Washington as we face the specter of another government shutdown. The new fiscal year for the Federal Government starts on October 1st. This is the 22nd government shutdown in the last fifty years.
In theory, under a government shutdown, non-essential federal functions...
Market concentration has rarely been higher. What is market concentration? The S&P 500 Index is a market-capitalization weighted index which means that each stocks weight in the index corresponds to its size (shares outstanding x share price).
The chart below shows that the largest 7...
“The daily blips of the market are, in fact, noise -- noise that is very difficult for most investors to tune out.”
– Seth Klarman
Summary
Interest rates are moving higher thanks to a combination of massive fiscal deficits, foreign owners of our debt...
Time to worry. Just kidding.
On August 2nd, Fitch Ratings, one of the nationally recognized statistical ratings organizations, or NRSRO, downgraded the U.S. credit rating one notch to the second highest rating. Fitch is one of the ten approved by the SEC to provide an assessment of the...
During the time I was writing this, I was interviewed for a podcast in which I discussed this very topic. To listen, click here.
For most of the last two decades, bond mutual funds were an easy and convenient way to purchase bonds. However, as rates fall, you are getting diluted by new...
‘‘Within our mandate, the ECB is ready to do whatever it takes to preserve the EUR. And believe me,it will be enough.”
Mario Draghi, July 2012
''We will keep at it until inflation is down to 2%. And our monetary policy tightening will be enough.It will be enoughto...
