Approximately one month ago, Standard & Poor’s placed 15 European nations on review for potential credit downgrades. In spite of the implications, Italian bonds began to climb and their yields began to fall, as many were hopeful that an upcoming summit between European Union leaders might put an end to the region’s spreading debt crisis. Indeed, on [...] Continue Reading...
Let’s face it. Maybe you weren’t cut out for volatility. And the stock market isn’t about to let you garner remarkable rewards in 2012… at least not without monstrous price swings. Can you turn to U.S. treasuries next year? Even if record-low yields didn’t rise, your return may not even keep up with inflation. It doesn’t look [...] Continue Reading...
By several measures, investors are every bit as afraid today as they were in the first week of October, when U.S. stocks had reached 52-week lows. Yet the S&P 500 is 11.5% higher than it was on 10/3/11. How can we tell that investors are still petrified? They’re flocking back to the perceived safety of the U.S. dollar and piling back into [...] 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...
I didn’t pursue a Master of Business Administration when I was younger; rather, I felt there would be more value in a Master of Science in Industrial/Organizational Psychology (a.k.a. “the psychology of business”). Why did I/O beckon more than the typical MBA track for financial professionals? In essence, the crash in October of 1987 had a profound affect [...] Continue Reading...
Motivational speakers frequently explain that the Chinese word for “crisis,” or “wei-ji,” represents a combination of “danger” (wei-xian) and “opportunity” (ji-hui). That said, how much opportunity can be found in crisis after catastrophe after calamity? For instance, the PIGS (Portugal, Italy, Greece, Spain) have been responsible for staggering levels of market volatility for 24 months. Time and again, one or more [...] Continue Reading...
The Greek referendum notwithstanding, most economists and Federal Reserve members have taken note of modest economic improvements. And while the slow-growth, limited-job environ is far from ideal, it should be enough to foster the well-being of many ETF assets. Not convinced? Erratic price swings have shaken the olive out of your martini glass? Then opt for a simpler [...] Continue Reading...
Everyone seems to recall the phrase, “irrational exuberance.” The description is most frequently tied to the dot-com frenzy and subsequent bursting of the info-tech bubble at the turn of the century. Yet Fed Chairman Alan Greenspan first uttered the words on December 5, 1996. In fact, it took nearly 4 more years before the stock balloon popped in March of 2000. [...] Continue Reading...
Since 7/25/2011, market participants have been dealing with extraordinary volatility. In fact, for the past 11 weeks, the CBOE Volatility Index (VIX) hadn’t closed below a 50-day moving average. Until now, that is. On 10/10/2011, the current price of the VIX closed below a key trendline. In a similar vein, the S&P 500 hadn’t closed above a 50-day MA since 7/27/2011. [...] Continue Reading...
In August, a bear had already started to gnaw on the Vanguard Europe Fund (VGK). By September, a sibling began clawing away at the iShares All-Country World Index Fund (ACWI). What about emerging markets? Most of them were being victimized in September too. Perhaps ironically, U.S. assets haven’t quite earned the dubious distinction because the Dow Industrials hasn’t fallen 20% from a recent [...] Continue Reading...
