We noted in our Q1 newsletter that the broad-based rally we were seeing in the most economically sensitive stocks had caused us to get more bullish on the stock market at the beginning of the year. That has proven to be the right call thus...
Over the years we have written several times about the impact of interest rates on stock prices. While we have mentioned the mathematical effects increasing interest rates have on stocks, we have never done a deep dive on this mechanism or explained some of the...
The allure of real estate investing is obvious. The fact that real estate is a tangible, physical asset holds sway in the minds of many. Real estate investing is also intuitive- the idea that you can buy a property and rent it for more than...
You have probably heard about stock splits more than once over the last 3 weeks. Two high profile splits have been announced- Apple and Tesla, so there has been a lot of talk about them. Stock splits are simple and for many investors, there is...
Conversations with clients since the start of the pandemic and recession have consistently ended up in the same place- “The stock market and the economy seem to be completely disconnected.” While we believe there are still observable connections between the market’s actions and the fundamentals...
Most people who have been around investing for even a brief period understand the concept of a benchmark- comparing your portfolio results to the results of a “control” group of assets. The idea is to measure performance against a neutral, broad based basket of relevant...
Most investors are very familiar with mutual funds. Mutual funds have been around since the 1890’s, with the most common structure (open end) being established in 1924. These funds are a way for investors to access a diversified “basket” of securities. Mutual funds hold all...
The behavioral economist Dan Ariely has written extensively on the power of free things. “In many past experiments we have shown that people are often overly excited about things that are free (see Predictably Irrational).” He wrote a blog in 2010 where he...
Severe market moves tend to leave an imprint on our minds. The two most recent examples are the great recession and the 2020 bear market resulting from the COVID-19 pandemic. These two events are similar in that they featured very steep sell-offs, but they differ...
The market tends to maintain a balance between budget deficits and trade deficits. Increasing the budget deficit while reducing the trade deficit disturbs that balance. Rest assured, the market will ultimately trend towards balance once more, but we may not like the results....