Lessons in Economics: Keynes Vs. Hayek

December 31, 2014

I shared this post in 2013, but it is still valid today.

As we close out 2014 and look ahead to a new beginning in 2015, I thought it would be fun to repost a couple of videos that offer some entertaining—and surprisingly accurate—lessons in economics. Even better, they do so à la rap! 

Continue reading → Leave a comment

Risk-Reduction Strategies: Advantages and Disadvantages

December 30, 2014

This post originally appeared about a year ago, in response to turbulence in emerging markets and a corresponding decline in U.S. markets.

Portfolio managers have several standby risk-reduction strategies they rely on—diversified asset allocation, regular rebalancing, and the occasional market timing tactic—to guard against large drawdowns. But do they really work? What are the potential advantages and disadvantages of these strategies?

Continue reading → Leave a comment

Worried About a Dollar Collapse? Don't Be . . . Yet

December 29, 2014

This post previously appeared in mid-2013, but given the Fed’s ongoing monetary policies over the last few years, and the recent volatility in the currency markets, it makes sense to revisit today.

In my role as chief investment officer at an independent broker/dealer–RIA, I often receive questions from advisors, their clients, and the media about the potential for a dollar collapse and, more important, what currency would replace the dollar in that (in my belief) unlikely event.

Continue reading → Leave a comment

What Determines a Currency's Value?

December 26, 2014

Here's a post that originally appeared in 2013 but is worth revisiting. 

In my recent post on the relative strength and weakness of various currencies, I didn't address one big question: what determines a currency's value? Is there, in fact, a “right answer” as to the value of each currency?

As with many economic questions, there are several right answers, depending on how you look at it.

Continue reading → Leave a comment

Hope, Sacrifice, and the Meaning of Christmas

December 24, 2014

As 2014 draws to a close, it's time for my traditional Christmas post. Best wishes to you and yours this holiday.

I have always loved Christmas. But as I grew older, I seemed to lose much of the spirit. Now that I have a six-year-old son—who is wrestling with the stress of being good under the eye of the “Elf on the Shelf,” guessing about presents under the tree, and baking cookies with his mom—I find myself recovering much of the Christmas spirit I had lost.

Continue reading → Leave a comment

Holiday Gratitudes 2014

December 23, 2014

The holidays are always a good time to reflect on the many things we have to be grateful for. As we settle in for a family celebration, here’s my list.

Continue reading → Leave a comment

Appearance on CNBC Worldwide Exchange, December 23, 2014

December 23, 2014

Learn why I told CNBC Worldwide Exchange that I think there’s going to be an accelerated economic recovery in an interview today, December 23

Continue reading → Leave a comment

Premortem: How the Global Doomsayers Got It Wrong in 2015

December 22, 2014

As I’ve written before, the doomsayers have been pretty comprehensively wrong, at least in terms of their dire predictions for the U.S. While they may yet be right elsewhere in the world, I thought we’d do a premortem on their behalf to figure out how they might get it wrong for the global economy, too.

What if everything turns out just fine?

Continue reading → Leave a comment

Some Geopolitical Thoughts About Cuba and the U.S.

December 19, 2014

As I discussed yesterday, the ongoing realignment of many countries is driven fundamentally by economics, rather than by geopolitics, but that doesn’t mean the realignment is geopolitically unimportant. Quite the contrary: What we see here is an accelerating trend that is reinforcing the predominance of the U.S. in the global system, with each piece of the puzzle supporting the others. Cuba is a perfect example.

Continue reading → Leave a comment

Russia and Cuba: Exploring a Common Theme

December 18, 2014

I’d planned to write about how Russia can respond to its current crisis, and I will. But the announcement that the U.S. and Cuba are resuming normal diplomatic relations has kind of gotten in the way.

Thinking about it, though, the events in Russia and Cuba are, in many ways, different facets of the same story.

Continue reading → Leave a comment

Thoughts on the Russian Currency Crisis

December 17, 2014

As the Russian currency crisis grows and threatens to expand to other emerging and commodity-based markets, I’ve been thinking about how this might play out on a country-by-country basis—not so much here in the U.S., but around the world. (As I’ve written before, I think the U.S. is pretty well insulated in the medium term and longer, despite any short-term shocks.)

There are three major factors I think we need to look at when we consider the economic risk level of a country as a whole.

Continue reading → Leave a comment

Market Turbulence: Nothing to Worry About Yet

December 16, 2014

On the heels of our premortem of the stock market in 2015, let's take a look at the market turbulence we experienced last week and yesterday.

The short version? There’s nothing to worry about yet.

Continue reading → Leave a comment

Premortem: The Stock Market in 2015

December 15, 2014

Following up on last week’s post about the value of premortems, I thought I’d do one on the stock market for the coming year. We’ll imagine that a decline has happened and try to figure out how and why, with the goal of strengthening our positioning today.

Continue reading → Leave a comment

Want to Avert Failure? Try Doing a Premortem

December 12, 2014

One of my favorite takeaways from Daniel Kahneman’s Thinking, Fast and Slow is the idea of the premortem—that is, looking at a new or proposed project, assuming it has failed, and projecting why that happened. (It's a more proactive version of the postmortem, where you look at actual failures and try to figure out what went wrong.)

Continue reading → Leave a comment

Who Suffers from Cheap Oil?

December 11, 2014

As I wrote the other day, the U.S. stands to benefit considerably from cheap oil. The question now is who will suffer—and what might that mean for the U.S.?

Continue reading → Leave a comment

The New International Economy

December 10, 2014

I’m working on two things right now: my economic and market outlook for 2015, and an update on the international economic scene that I’ll present at Commonwealth’s top-producer conferences.

The problem I’m facing with both, I realize, is that the world has really changed in the past couple of years, and the recent past is no longer a good guide to the future.

Continue reading → Leave a comment

Is the Price Drop in Oil All Good?

December 9, 2014

The short answer to that question is no. There is some downside to falling oil prices. But I’d take a 90-percent upside with a 10-percent downside any day of the week.

Continue reading → Leave a comment

Economic Risks Recede, Political Risks Return

December 8, 2014

Newspaper reporters (and bloggers!) are breathing a sigh of relief as the new Congress gets closer. Just as the economic worries are subsiding—at least here in the U.S.—political risks can move back to the front page. As someone who writes a blog post every day, all I can say is thank goodness.

As a citizen, though, I am somewhat (but not yet very) concerned.

Continue reading → Leave a comment

Where Are the Opportunities in the Global Markets in 2015?

December 8, 2014

On December 4, I joined John Ryding, chief economist at RDQ Economics, for an interview on Fox Business. The discussion centered on which global markets may be best for investing in 2015, and why I think the greatest risks to the stock markets will come in the first quarter. 

Continue reading → Leave a comment

Christmas Comes Early for Employment Statistics

December 5, 2014

There's been some trepidation recently about the November jobs report. Amid signs of weakness, pullbacks on various stats, and problems in the rest of the world, most forecasters were backing off on their earlier estimates, just in case.

They should have doubled down.

Continue reading → Leave a comment

An Updated Look at the Stock Market

December 4, 2014

I recently took a look at housing for the first time in six months or so, and I thought it was time to examine the stock market in similar fashion to see where we are.

In my market commentaries and videos, I have continued to discuss the positive trends and healthy fundamentals—which are very real—but we also need to consider the broader context. The following three indicators paint a somewhat cautionary picture.  

Continue reading → Leave a comment

Book Review: "Thinking, Fast and Slow," by Daniel Kahneman

December 3, 2014

One of the fundamental principles of economics is “rationality”—the notion that all actors in a market have similar information, preferences, and abilities to project the future.

Like all economists, I know this isn’t really true, yet it still influences how I view the world. So the extent to which Daniel Kahneman proves this idea false—not just at the aggregate level, but at the individual level—comes as something of a shock.

Continue reading → Leave a comment

What Does Black Friday Mean for the Economy?

December 2, 2014

The news is in: Black Friday was a bust. Sales over the Thanksgiving weekend were down 11 percent, with 6 million fewer shoppers this year than last.Sounds like a pretty bleak Christmas, no?

In fact, Black Friday—so named because it’s when retailers get as much as 40 percent of their annual sales, moving from the red into the black—may not be the best bellwether of the holiday shopping season. While lackluster sales aren’t necessarily a good sign, they also don’t spell doom for holiday spending.

Continue reading → Leave a comment

Market Thoughts for December 2014

December 1, 2014

In my latest Market Thoughts video, I provide an update on U.S. economic growth and explain how a sluggish Japan and Europe factor into the recovery. You'll also hear my thoughts on holiday consumer spending.

Continue reading → Leave a comment

Economic Risk Factor Update: December 2014

December 1, 2014

Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead. As expected, the data hasn’t changed much from last month—it remains positive in almost all areas and has continued to improve in many cases—but it’s still important to keep an eye on things.

As we enter the month of December, the economic forecast remains encouraging.

Continue reading → Leave a comment

Upcoming Appearances

Tune in to CNBC's Squawk Box on Monday, November 27, at 6:15 A.M. ET to hear Brad talk about the markets. Check your local listings for availability.

5 Ways to Affiliate
Commonwealth Independent Advisor

Hot Topics

Have a Question?

New Call-to-action

Conversations

Subscribe via E-mail

Subscribe

Disclosure

The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly into an index.

The MSCI EAFE Index (Europe, Australasia, Far East) is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.  

Third party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites. Information on such sites, including third party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.

Member FINRASIPC

Please review our Terms of Use

Commonwealth Financial Network®