With the S&P 500 garnering 4.6% in less than 3 weeks, are money managers becoming skittish? If hundreds of millions flowing out of a few select ETFs is any indication, then the answer is, “Yes.” On 1/19/2012, institutional advisers used their block accounts to dump roughly $120 million of iShares Russell Top 200 Growth (IWY) and $80 million of [...] Continue Reading...
The headline unemployment number has fallen to 8.5% from a “Great Recession” high that is well north of 9%. Many say that the trend is heading in the right direction. And the media are beginning to tout the executive branch of government as having contributed to ”job creation.” Privately, many economists decry that systematic wealth redistribution is incapable of creating jobs — issues [...] Continue Reading...
Buying-n-holding every investment asset is detrimental in secular bear markets. Granted, one can debate whether or not we’ve been witnessing a series of smaller bull markets within a grizzlier picture. However, there’s no denying the benefits of actively reducing downside risk prior to (and during) the 2000-2002 tech bubble or the 2008-2009 credit collapse. At the same time, investors are always searching [...] 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...
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...
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...
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...
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...
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...
