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Hope is Not a Good Investment Strategy

According to the Bespoke Investment Group, every year, Wall Street analysts declare that the stock market will rise, and since 2000, the annual average forecast has been for a 9.5% gain.  The reality is that the market has only risen at a 3.9% rate over this time frame.  The 2008 forecast was for a market increase of 11%; the reality was -38%.  To say that Wall Street promotes the stock …Read More

June’s economic backdrop

June’s economic backdrop From the emerging data, it would appear that my analysis of the economy’s underlying strength, as published in this column, was spot on. The First Quarter •I remarked several times over the past few months that the seasonal adjustment process (SA) used by the Bureau of Economic Analysis is often unreliable and sometimes misleading. Now, after what appears to be the second year in a row of …Read More

Bonds Got It Way Wrong, Economy Is Accelerating

First published at Seekingalpha.com http://seekingalpha.com/instablog/27843163-robertbarone/2967823-bonds-got-it-way-wrong-economy-is-accelerating In the financial marketplace, the bond market usually signals first and reflects the magnitude of a changing economic environment. The equity market, on the other hand, is often late, or at least later than the bond market in recognizing oncoming changes in economic conditions. So, the worries now rampant on Wall Street and reflected in a pessimistic media over equity valuations are understandable given that …Read More

Awash in Liquidity, Part I: Why Interest Rates Are Falling

First published at Minyanville.com http://www.minyanville.com/business-news/the-economy/articles/Awash-in-Liquidity-Part-I-Why/5/27/2014/id/55107 And why, in the short-term, increased market volatility will result. Despite a generally stronger economic outlook for the US economy, interest rates in May moved significantly lower, as if expectations were for an oncoming recession.  This has confounded many macroeconomists.  In this first installment of a two-part series, I will discuss why interest rates are now falling, and why, in the short-term, increased market volatility …Read More

Better safe than sorry on investments

The old adage “Better safe than sorry” always returns to popularity after financial collapses, mainly because many people are “sorry.” Because it has been more than five years since the last financial calamity and it feels like the distant past, many investors are now ignoring this advice. So it appears apropos that we have this discussion now rather than moaning after the next market downdraft. Mind you, I am not …Read More