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Markets: Time to Reflect on Risk, not Return

The week ended September 7th saw a pull-back from the record highs set in late August. Perhaps we witnessed the infamous “double top” (January 26th and August 29th). It is clear that financial markets have become riskier, and, perhaps, it is time for investors to assess the risks inherent in their portfolios versus the prospects of future returns. There is a short-term and a long-term view, neither of which augurs …Read More

New Market Highs: It’s Not the Economy (Stupid)!

It had been 210 days since the S&P 500 had made a new record high, but, on Friday, August 24th, after several days of struggle, the market finally broke to a new high (2874.69). The struggle actually began the prior Tuesday (August 21st). During that trading day, the S&P 500 actually pierced the old record high intra-day (during the trading session). But Wall Street has its own set of quirky …Read More

Slower Growth, Inflation, the Fed, and End of Cycle Indicators

The U.S. economy itself appears to be doing well, but we see many end of cycle signs, including less than 4% unemployment, rising interest rates, emerging consumer inflation, a strained housing market, slowing growth worldwide, and huge instability now developing in the emerging market space. Economy Still Healthy The 0.8% rise in retail spending in May would seem to confirm that the U.S. economy is still expanding. We believe that …Read More

Don’t be Fooled: Complacency is a Danger to Investors

The U.S. economy itself appears to be doing well, but we see many end of cycle signs, including less than 4% unemployment, rising interest rates, emerging consumer inflation, a strained housing market, slowing growth worldwide, and huge instability now developing in the emerging market space including Argentina, Turkey, Brazil, Indonesia, and Thailand. However, what scares us the most is the level of investor complacency. Because of the Fed’s and other …Read More

Sources of Uncertainty (Resulting in Market Volatility)

Over the past several months, I have talked a great deal about volatility. The fact is, volatility increases in direct proportion to market uncertainty. So, today’s volatility is just symptomatic of the confusion and uncertainty now prevalent at least in the near-term outlook. The Trade Issue The talking heads on bubblevision would have you believe that the bickering over trade and tariffs, especially between President Trump and China, is the …Read More