The mainstream financial media may have caught a break in 2011. Neither the S&P 500 nor the Dow fell more than 20% from respective highs, meaning that nobody ran with the “Bear Is Back” headline. It follows that the 3/9/2009 lows still represent the start of a bull market uptrend. Not surprisingly, many have chosen to wistfully recollect the [...] Continue Reading...
There’s a tendency for many writers, analysts and money managers to lump all industrializing nations into a single entity. For better or worse, the popularity of Vanguard Emerging Markets (VWO) and iShares MSCI Emerging Markets (EEM) illustrates the way the developed world chooses to invest money. (Heck, Jim Cramer recently described the investing environment in terms of a 4-legged [...] Continue Reading...
LIBOR (London Inter-Bank Offered Rate) is the interest rate that fellow European banks will charge other banks. Put another way, it is the rate at which a financial institution in the region can borrow money. In order for banks to operate, they are consistently lending out and/or borrowing. If they cannot exchange with one another, required reserve levels could be deemed “inadequate” or investors could [...] Continue Reading...
The prospects for corporate earnings haven’t mattered much to the markets in 2011. Instead, European debt news drives stocks dramatically higher or lower. Last week, stock assets tanked on less-than-anticipated demand for Italian bonds. This week, stocks skyrocket on better-than-expected desire for Spanish bonds. Traders used to profit from this kind of volatility. They haven’t been doing [...] Continue Reading...
Popular emerging markets in the BRIC configuration – Brazil, Russia, India, China – suffered through severe bear markets in 2011. Yet far too many writers attribute the 20%-33% declines to Europe’s sovereign debt crisis alone. It is true that the debt mess sent the U.S. dollar higher at the expense of the ruble, “real,” and the rupee. Contagion containment has also damaged the prospects for emerging market [...] Continue Reading...
In 2004, South Korea and Australia began exporting more to China than they did to the United States. By year-end 2008, Japan and Brazil exported more to China than to the U.S. Not surprisingly, when the Chinese government expressed an intention to rein in rampant inflation through tighter fiscal and monetary policy (November 2010), many countries that depend on their exports to [...] Continue Reading...
I represent hundreds of families as the president of my Registered Investment Adviser, taught financial concepts to classrooms around the world, spent years as the CFP on a national talk radio show and receive countless e-mails from wisdom seekers. Yet I would not be able to tally the number of investors who I have encountered in my lifetime. However, there [...] Continue Reading...
The troubles in Italy, Portugal and Greece are shockingly serious. How serious? Many insist that these 3 little piggies will eventually succumb to disorderly bankrupties, causing Armageddon for world stock markets and the global financial system. For the doomsday crowd to be right, however, everything has to go wrong. Ev-er-y-thing! For instance, coordinated Eurozone plans for aid to Greece would have [...] Continue Reading...
The willingness of Greek leadership to throw salt into the wounds of the global financial system is the only thing on Mr. Market’s mind. It follows that the ongoing European debt crisis continues to steal all of the headline space. Yet there are a number of economic data points that investors should not gloss over. For [...] Continue Reading...
Factual headlines are often misleading. For example, a popular financial portal offered, ”October consumer confidence weakest since March 2009.” Most people might interpret this to mean that consumers aren’t spending and/or won’t be spending their money, resulting in less revenue for economically sensitive corporations. However, actual consumer spending has been on the rise… 1.1% in September alone. Equally important, Retail ETFs [...] Continue Reading...
