1st Quarter 2019 Newsletter
Below please find our 1st Quarter 2019 Newsletter. Enclosed you’ll find articles on the state of the markets, financial planning, and investing.
Concentrated Stock Can Be Hazardous To Your Wealth
First, we must ask “What do we consider a concentrated stock position?” The rule of thumb is 10% of your investable net worth. Now, rules of thumb can sometimes get us in trouble, but the risk should be looked at from a holistic prospective.
April 12, 2019 Weekly Market Recap
The S&P 500 increased 0.5% this week, as a strong earnings report from JPMorgan Chase (JPM) and a positive response to Walt Disney’s (DIS) upcoming new streaming service helped the broader market overcome weakness from the health care stocks.
Are Index Funds Distorting Prices?
Over the last several years, index funds have received increased attention from investors and the financial media. Some have even made claims that the increased usage of index funds may be distorting market prices.
April 5, 2019 Weekly Market Recap
The stock market rally carried over into the second quarter, with the S&P 500 gaining 2.1% this week, extending its winning streak to seven straight sessions and setting a new closing high for the year. Investor sentiment was boosted by positive manufacturing data, progressing U.S.-China trade talks, and a Goldilocks Employment Situation Report for March.
An Inverted Yield Curve
Last week, the Fed announced that it will pause its policy of interest rate hikes and end its balance sheet reductions. This reversal in policy was fully expected by the market, which is also anticipating rate cuts beginning in 2020. Even though the market saw this coming, there were significant moves in interest rates and […]
Should You “Take a Flyer” on Boeing Stock?
We’ve received a handful of phone calls from clients asking if they should purchase some Boeing stock in the wake of the recent grounding of the 737 MAX 8 aircraft. The stock price declined nearly 12% over a two-day period from Monday, March 11th through Tuesday, March 12th, falling from $422.54/share to $375.41/share.
Why Are Rates Still Low?
Interest rates have been a conundrum for investors, economists and policymakers over the past ten years. Despite steady U.S. economic growth and an unemployment rate near historic lows, long-term interest rates have remained anchored.
“The Point” of Major Stock Indices
A quick online search for “Dow rallies 500 points” yields a cascade of news stories with similar titles, as does a similar search for “Dow drops 500 points.”
March 8, 2019 Weekly Market Recap
The S&P 500 lost 2.2% this week, as concerns about global growth underpinned a risk-off mindset. With a confluence of discouraging data, news, and technical drivers, the market succumbed to profit-taking interest after its strong start to the year.
Event + Reaction = Outcome
Jack Cranefield (author of The Success Principles) believes that highly successful people are particularly capable of influencing outcomes by controlling their own reactions to events, rather than controlling the events themselves. And I think he’s on to something!
Should Rising National Debt Concern Us?
There aren’t many issues that spark as much investor concern as our rising national debt. It’s clear that the elevated level of federal debt and the annual budget deficit are a result of long-term fiscal trends as well as a reflection of the financial crisis of 2008.
Captain Obvious
So, here we are just barely 7 weeks into the new year and stocks have been on fire. Some of our all-equity portfolios are up over +13% year-to-date. The S&P 500 is up almost 11% thus far. At the risk of sounding like “Captain Obvious”, I’m going to say this trajectory of returns is probably […]
The Twisting Yield Curve
Despite the recent market recovery, interest rates are still quite low. The yield on the 10-year Treasury had risen above 3.2% as recently as last November, but is now hovering around 2.6%. As a result, the yield curve has “twisted” over the past year, with short-term rates rising and long-term rates falling.
Investing Fads
Like trendy fashion and bad haircuts, investing fads are nothing new. When selecting strategies for their portfolios, investors are often tempted to seek out the latest and greatest investment opportunities.
