In a “Then and Now” piece, the Wall Street Journal published a number of fascinating statistics. “Then” represented October of 2007… the last time that the Dow Jones Industrials Average notched nominal highs. “Now” represents March of 2013… the first time that the price-weighted index ever closed above 14,250. Household income has slipped 5.6% since October [...] Continue Reading...
Prior to the 2007-2009 financial meltdown in the U.S., risk-takers thoroughly embraced the idea that emerging markets would regularly trounce the developed economies. At times, this simply meant that emerging market stocks would outperform on the upside. At other times, this referred to the ability of “emergers” to hold on to gains… even if U.S. [...] Continue Reading...
U.S. stocks (S&P 500) have packed on Olympic-sized gains through the initial eight weeks of 2013. Fed policy uncertainty aside, 6%-plus capital appreciation on low volatility is impressive by any measure. The bulk of the run-up is attributable to industries tied to economic growth and enhancement. Sector ETFs that represent financials, industrials, technology and energy have [...] Continue Reading...
Investing in stock assets when the S&P 500 is hitting fresh highs can be as dangerous as driving on a yet-to-be-plowed stretch of highway. You may get to your destination without a hitch. Then again, you might spin out of control and crash. At present, both the Eurozone’s ongoing recession and “Snowmageddon” on the East Coast [...] Continue Reading...
The yield on a ten-year treasury bond is very close to recovering 2%. That may sound ridiculously low when placed in a historical context. On the other hand, funds like iShares 10-20 Year Treasury (TLH) have logged -2.1% returns year-to-date, precisely because the 10-year’s yield has gained 0.25% in 4 short weeks. On a day when [...] Continue Reading...
The leading measure for residential property, the S&P Case-Shiller Home Price Index, pointed to 4.3% year-over-year gains in the 12 months ending last October. Clearly, prices have stabilized. That said, can consumers genuinely contribute to a longer-lasting real estate recovery? For example, I recently purchased a 2nd property. My credit scores were phenomenal. The loan-to-value (LTV) [...] Continue Reading...
Every year for the past 3 years, scores of pundits have predicted the demise of high yield bonds. Reasons have included record low yields for the asset class, an imminent rise in interest rates, questionable balance sheets, recession, inflation and overvaluation. In spite of gloomy forecasts, Morningstar revealed that high yield bonds have averaged 10.5% annually over the past 3 [...] Continue Reading...
Why are investors still buying treasuries and short-term investment grade bonds? Many have grown accustomed to the exceptional total returns. As I look out across the 2013 landscape, however, I see less opportunity for investors to score big with a capital appreciation component on taxable U.S. debt or quality (e.g., AAA, AA, etc.) corporate debt. Depending on [...] Continue Reading...
Are we tiring of the fiscal cliff story? Is it becoming cliche to state the obvious… that uncertainty over the resolution of expiring tax breaks and potential spending cuts is adversely affecting the stock market? Perhaps. Yet one avenue that hasn’t received as much digital ink is the possibility that “yield” is turning into a dirty [...] Continue Reading...
Many of us in the financial services industry expected the outcome of the election to be determined by Ohio alone. Perhaps surprisingly, while Ohio was close throughout the evening, there was never a need for recounting the “Buckeye State” ballots; President Obama had won the electoral votes needed without a single-state showdown. While a protracted battle [...] Continue Reading...
