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Trade Alert

Today we sold our two PIMCO funds in our Conservative portfolio (and the majority of our PIMCO fund holdings in our client accounts) and moved into Vanguard Mortgage-Backed Securities ETF (VMBS).

Our Short and Sweet Guide to Interest Rate Armageddon

For some reason, investor fear of rising interest rates gets more press than the brewing tech bubble. Maybe it’s the risk/reward comparison that scares investors. Sure, it won’t be good for Alibaba (BABA) investors coming in at a quarter trillion dollar market cap if earnings growth stagnates,  or Netflix (NFLX) investors buying at ~100 P/E ratios, but those companies could have more than the 3-4% annual gain longer-term investment-grade bond buyers can look forward to if things go well. 

August 2014 Performance Review

It seems the only record left to break is the old high in the NASDAQ, circa March 10th 2000. The tech-heavy benchmark finished that day at a delirious 5,048.62 — a mere 10% rise from today's level. If only Pets.com stuck around long enough to make an app with GPS tracking of your dog food order...

Ups and Downs

As the market continues to erase every pullback in short order, investors are focusing less on downside risk and more on  upside potential. Controlling losses is no longer a priority.  As the markets heat up, investors want a piece of the action. As contrarians, that isn’t our approach, and it shouldn’t be yours, either. Ideally, concern for downside should rise along with the market, just as ensuring you’re positioned for the rebound should be your objective during a long bear market. 

July 2014 Performance Review

Stocks finally took a breather at the end of the month as investor enthusiasm for newer startup and growth stocks may have hit an old economy wall of debt problems in Argentina and political instability in multiple locations. The global stock and bond market can't live on Facebook earnings and iPhone 6 expectations alone. 

The Next Shoe to Drop - Part II

Welcome back, dear readers. As temperatures (and the stock market) continue to rise, it’s time for Part II of our two-part summer beach read about potential causes of the next market drop.

June 2014 Performance Review

The market seems to be moving up on a combination of low interest rates, an economy that isn't quite as weak as feared, and a hot market for smaller growth stocks. 

Waiting for the next shoe to drop – Will It Be a Pump or a Flat?

It's not clear where the next significant slide will come from. We don’t have a broad tech and growth stock bubble like we had in 2000. We don’t have a real estate bubble propping up the economy. Not that you need a reason for the stock market to slide. There's still no consensus as to what caused the crash of 1987, and experts differ on the reasons for the 1929 crash as well as the depth of the economic problems following the slide.

May 2014 Performance Review

In May, lingering global stock and bond market fears evaporated like air conditioner condensation on hot asphalt. We even had a (hopefully) weather-induced  negative first quarter GDP figure. Previously lagging emerging markets rebounded while the S&P 500 gained over 2%. More surprising (to some) was a retreat in interest rates, pushing bond prices higher and likely playing a role in stock prices rising.

The Permanently High Plateau

While it's true that stocks are the best-performing investment in the long run, they're also one of the most volatile, which can trigger poor returns far worse than the other lesser  asset classes, despite the fact that they often have stability going for them.