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Perspectives
Inflation and its impact on interest rates continues to be the driving factor in financial markets and the overall economy.  There are certainly signs of inflation slowing down in a practical sense, with what we are seeing in housing, as prices decline in many of the formerly hottest markets.  That will take time to show...
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The Huge Cost of Trying to Time the Market and Favorable Election-Year DynamicsToday I saw an interesting statistic that I wanted to share with you.  If you sold stocks at the bottom of each 10% selloff, and then bought back 10 days later, you’d miss out on over 2/3rds of the gains since 2002.  This...
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The Wilshire 5000 index is down 26% YTD.  Historically, since 1971, only one of 20 occurrences of drawdowns exceeding 20%, resulted in stocks being down just 1-year later, with the other 19 being positive.  All of the occurrences saw the index higher 3, 5, and 10 years later, which is simply astounding. Please make sure...
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The S&P 500 is now down 25% YTD, which puts it in the top 10 worst selloffs historically.  What is particularly unique about this bear market is that bonds have offered no help whatsoever, generating massive losses as well.  Even conservative investment grade bonds are down by 22% YTD, when the previous biggest loss on...
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It’s been a bleak week and month frankly, with the S&P 500 down nearly 5% on the week as I write, and well over 11% on the month.  Current market sentiment is as bad as it has been since the Financial Crisis, which is really saying something given there have been quite a few significantly...
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Today the Federal Reserve raised the Federal Funds rate by the expected 75 basis points.  We haven’t seen rate hikes like this in several decades, so it continues to rattle both equity and fixed income markets.  Major equity markets were down nearly 2% today, following several weeks of losses.  The Fed is talking a tough...
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Today’s higher than expected August CPI report, rattled the market dramatically, causing the Nasdaq to drop by 5.2%, the S&P 500 by 4.3%, and the Dow to drop by 4%.  This was the biggest down day since June of 2020 and the 8th daily decline of greater than 3% on the year.  The recent decline...
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The stock market has reacted very negatively to Fed Chairman Jerome Powell’s hawkish interest rate outlook, with the S&P declining by roughly 6% over the last 4 days.  Weaker economic data and declining commodity prices gave market participants hope that the Fed might pivot, pointing to less rate hikes, but Powell talked a tough game,...
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For those of you that have been reading this newsletter, you’ll know that we have been writing about why most bonds have made so little sense to invest in over the last few years, given the historically low yields and risks from higher rates and inflation, which has now come to fruition.  The average bond...
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Markets have had a nice rally since the mid-June lows, as signs that inflation has peaked have investors a bit more optimistic that the Federal Reserve won’t have to raise rates as far.  I’m definitely in the camp that the inflation growth rate has peaked and the signs of it are quite pervasive.  With that...
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