My initial outlook for 2014 was based on an improving economy across the board. As we approach the middle of the year, that forecast is playing out.
My initial outlook for 2014 was based on an improving economy across the board. As we approach the middle of the year, that forecast is playing out.
May 29, 2014
If you haven’t already seen the news online, you’ll no doubt see it on tomorrow’s front pages: first-quarter economic growth was revised down from an anemic 0.1-percent gain to a much worse 1-percent loss.
Check out Brad’s interview on Bloomberg Radio’s The Hays Advantage with Kathleen Hays and Vonnie Quinn, where he offers his general outlook on the markets.
May 28, 2014
My post the other day about the Foreign Account Tax Compliance Act (FATCA) generated a lot of interest among readers, both in the U.S. and abroad. In concluding that FATCA wouldn’t have a material effect on the value of the dollar or the U.S. economy, I was addressing a fairly restricted set of circumstances. Given the depth of interest in this topic, and the fact that the law does have serious implications—just not for the dollar—let’s dig in a bit more.
May 27, 2014
I ended last week on a note of shared sacrifice. This week, let’s talk about some of the forms that sacrifice will likely take.
In order to take advantage of some new capabilities and streamlined efficiencies here at Commonwealth, my friends in the Marketing department tell me that my blog will be moving to a new address, http://blog.commonwealth.com/independent-market-observer, effective June 2, 2014.
May 23, 2014
One of the joys of being a father is explaining to Jackson things that I, as an adult, take for granted. Today, we’ve been talking about Memorial Day—not as the start of summer but as a time to remember those who have died so we can live in freedom.
I’m at the J.P. Morgan Research Summit today. Yesterday’s sessions were excellent, and one discussion seemed particularly applicable in light of my recent posts on moving averages.
May 21, 2014
For the past two days, I’ve focused on moving averages—specifically, how investors can use them as warning signals and how they work to manage risk. Today, we’ll talk about their potential costs and drawbacks, which are common to any type of risk management program.
On the topic of using moving averages to avoid risk, one question I often get is, What actually would have happened over the past couple of decades? Everyone has an interest in avoiding a 2000 or 2008, but everyone also knows that market timing doesn’t work.
May 20, 2014
Check out Brad’s May 20 interview on CNBC’s Worldwide Exchange, where he offers his thoughts on recent U.S. equity market growth and Treasuries.
One of the major causes of stock market losses is unforeseen declines that make people sell out—often at the worst time. This is one of the reasons I’ve focused much of my recent research on using drawdown (instead of return variance) as a measure of risk. In my opinion, it provides a better metric for real-world investment performance.
The first question you might have, upon seeing that headline, is what’s the difference? Data is simply facts, without meaning or context. Information can be used as a basis to make decisions; it can be acted on.
If you ever want to be amused, get a cat to watch an ink-jet printer while it’s at work. I now have a laser printer at home, which still seems to fascinate the cat, but there’s no comparison to the ink-jet. Something about the print head scurrying back and forth under the cover must remind them of a mouse . . .
May 15, 2014
Recently, several readers have written in with questions about House Bill 2847—specifically, the Foreign Account Tax Compliance Act (FATCA) section, which takes effect in July.
May 14, 2014
There are no blockbuster news stories today, but several items play into the theme of how “old normal” things have become.
May 12, 2014
As I write this Monday morning, stocks are up quite a bit on the day, with the S&P 500 pushing even closer to a new all-time high. The headline on Google Finance reads “U.S. Stocks Advance Amid Deals on Optimism Over Economy,” and all seems right with the world.
The markets seem to be rallying as the Russians dial down the Ukraine confrontation. After a couple of dips, it looks like we’re edging back into a risk-on mode, with Putin apparently deciding that he has what he needs and it’s time to back off.
We’ve seen a lot of the usual hand-wringing about U.S. markets over the past several months—Flash Boys and high-frequency trading, breakdowns in the Nasdaq, various insider trading scandals. It hasn’t been a great time to be in the financial market press-relations departments.
Last week, Ken Carl wrote in with a question: “Am I the only one who is pretty amazed at the effect that the weather had on our economy? I admit that we had a hard winter, but it wouldn’t be unreasonable for the same thing to happen again. Would our economy be hit once again if it did?”
May 5, 2014
This will be a short post, as I arrived home at 7:30 this morning after flying and laying over for the past 18 hours or so, so I am a little tired. That said, it was all worthwhile when Jackson came running out of the house to hug me as I pulled up in a cab, then tried to drag my bag—which weighed more than he does—into the house. We did it together—teamwork!
More evidence for the “snowdown” thesis is in. The unexpectedly strong April employment report, with a gain of 288,000 jobs, surprised pretty much everyone, and shows that hiring has come back in a big way after the weak first quarter. Even more encouraging are the upward revisions to first-quarter job growth, with 36,000 more jobs created than were initially reported.
May 1, 2014
Thinking about my recent post on how normal everything has become, I realize that I should be more grateful for just that. Sitting here on my balcony in Kauai at the Commonwealth President’s Club conference, I certainly have other things to be grateful for as well.
