Whenever we transition into a new year, a slew of gurus come out of hiding to proudly share their projections for the upcoming 12 months. Although a good part of financial planning and investment management involves making some projections, I try not to join these gurus each year for two main reasons.
For more than 15 years, I’ve taught sessions in the local “It’s Your Money” program. As I recently taught their “Equity and Fixed Income Investing” course, I shared one of my favorite visuals about the perils of jumping in/out of the markets. There are several important takeaways.
Through the middle of this year, just seven stocks have driven 75% of this year's stock market performance. These stocks include Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. Some are calling these stocks “The Magnificent Seven.” There are nice parallels between the classic Western movie and what we might expect from these specific stocks in real life.
Looking back through my older writing, I found an article I wrote in 2017. The article had an official-sounding title, “International Investing – What Investors Need To Know.” The article made the case for investing in stocks outside the US. How do I look at these markets now?
With this weekend’s (March 11, 2023) news about bank failures, I’ve received more than a few questions. I thought I’d share my answers to some of the questions I'm getting.
The University of Michigan’s US Index of Consumer Sentiment is currently at the lowest reading the survey has ever recorded. It’s clear that folks are concerned. There is a good possibility this is good news.
Last week we reached "correction" territory as the stock markets touched losses of 11.7% year-to-date. Stock and bond market losses are stressful. Big declines might trigger one of the following responses: Fight, Flight, or Freeze. I use a different strategy: Rethink. This has led me to three conclusions.
If I could only track one stock market measure, I would use the CAPE ratio. At the beginning of 2022, the CAPE ratio was roughly 50% above its 20-year average; this does not bode well for future stock market returns.
I’ve been a huge fan of Warren Buffett and his partner, Charlie Munger, for more than 25 years. For obvious reasons, the 2020 Berkshire Hathaway Shareholder meeting was available online. That meant I was able to hear from "Oracle of Omaha" while sitting in my home office. Unfortunately, my excitement was gone soon after the event started.
In the last several weeks, I’ve received more than a half dozen press requests asking: “How will the coronavirus affect investment portfolios?” Although very few clients have asked me this question directly, I thought I’d share my thoughts on this topic.
Many investors’ image of the stock market resembles an EKG where they believe the market is up, then down, then up, then down, etc. The reality is quite different.
Nobody likes it when the stock markets decline. This week we see two economic superpowers “saber-rattling” about who will impose the largest tariff. Because threatened or imposed tariffs have real long-term consequences, the global stock markets have declined relatively sharply. I take advantage of these rough times to run “lifeboat drills.”