The Independent Market Observer

As 2018 Dawns, There Is Much to Be Grateful For

December 29, 2017

As I’ve said many times before, I believe that gratitude is a foundation for both happiness and a mindful life. Every day, I write down at least three things I’m grateful for, a practice that is proven to increase well-being. Beyond that, I also try to make time every couple of months to really think through my life and all I have to be thankful for.

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Is It Time to Rotate Out of International Equities?

December 28, 2017

Today’s post comes from Anu Gaggar of Commonwealth’s Investment Research team. Take it away, Anu! —Brad

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Appearance on CNBC's Power Lunch, December 26, 2017 [Video]

December 27, 2017

With consumer confidence at a 17-year high, we are approaching 2018 with plenty of momentum. But will the rally continue into 2018? Could confidence peak in the next year? I discussed these thoughts and more during an appearance on CNBC's Power Lunch with host Tyler Mathisen.

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Is Global Diversification Worth the Risks? (Part II)

December 27, 2017

Today's post is from Peter Essele, manager of Commonwealth's Investment Management and Research team. 

A little over a year ago, my colleague, Anu Gaggar, and I conducted a study for the Independent Market Observer. We examined the emerging markets and international asset classes through the lens of investor behaviors, noting at the time that many investors had shed these asset classes during 2016. They did so largely because they feared underperformance and higher volatility. We believed there could be negative consequences on portfolio returns from this decision, however, so we took a closer look.

Today, we're revisiting this topic to see whether investors have changed their minds since then, choosing to once again accept the risks of global diversification. And, if so, what might that mean for their portfolios going forward?

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Monday Update (on Tuesday): Housing Surprises to the Upside

December 26, 2017

Last week was very positive for the housing sector, with both consumers and builders showing surprisingly high levels of confidence and activity. But the week ended with a cautionary note for business investment. As that has been a particularly strong story recently, it warrants attention. Overall, however, the news was good as we end the year.

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Should You Invest in Hedge Funds?

December 21, 2017

One of the questions we often get is whether people should invest in hedge funds. This question is more complicated than it seems. Today, Rob Kane will take a look at whether you can—or should—consider such investments. Commonwealth’s Research team provides this kind of expertise to advisors and clients, and I am happy to offer a sample of what we can do for an asset class that is so much in the news. Over to you, Rob.

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Is Renewable Energy Contributing to U.S. Energy Supply?

December 20, 2017

Brad here. One of the great things about Commonwealth is that we have a team of expert analysts to provide valuable context on pretty much anything we need. Today’s post, from Nathan Parker, highlights the evolving energy landscape in the U.S. We must understand where we came from to know where we are going, and this is a great read that does just that for the energy sector. Over to you, Nathan.

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2017: A Dickens of a Year

December 19, 2017

It was the best of times, it was the worst of times. Catchy beginning, yes? Dickens certainly used it to good effect. As I was thinking about 2017 in retrospect, it seemed almost unavoidably appropriate.

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Monday Update: Consumers Continue to Earn and Spend

December 18, 2017

Last week had only three major reports, but they covered the spectrum of economic activity. Overall, the news was quite good—with faster income and spending growth, as well as continued industrial and manufacturing expansion.

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What the FCC’s Decision on Net Neutrality Rules Means for Consumers

December 15, 2017

From an economic standpoint, many of the changes made so far by the Trump administration have been regulatory, not legislative. For all the media coverage on the health care battles, and now the tax reform battle, the real work has been down in the trenches, looking at regulations that constrain different industries and trying to repeal those deemed most onerous.

The latest change—which has received an unusually high profile—is the decision by the Federal Communications Commission (FCC) to repeal what are called the net neutrality rules.

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What to Expect from the Fed in 2018

December 14, 2017

On the economic front, the headline news is that the Fed raised rates another quarter point, as expected. So far, so what? But the details paint a more interesting and useful picture about what the Fed is likely to do with interest rates next year—and what that means for you as an investor.

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What Does the Alabama Election Mean for the Markets?

December 13, 2017

Yesterday’s news that the Democrats won the Alabama special Senate election, for the first time in 25 years, rattled U.S. politics. By taking the Republican majority in the Senate from 52 to 51, it reduces an already tight margin for difficult votes. By signaling that even the reddest states are now potentially in play for the Democrats, it could be a bellwether for the 2018 midterms. But what does the Alabama election mean for the markets?

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Monthly Market Risk Update: December 2017

December 12, 2017

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for December? Let’s take a closer look at the numbers.

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Monday Update: Mixed Results, Healthy Overall

December 11, 2017

Last week was a busy one for economic data, with significant reports across all areas. The news was mixed, with declines in several areas, although the overall levels remain healthy. This suggests that the recovery continues but that it may be peaking.

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Economic Risk Factor Update: December 2017

December 8, 2017

As expected, November’s data showed some negative effects as the post-hurricane bounce of October moved out of the economic data. Still, the news continues to be positive. November’s results remain supportive of strong growth, with job growth coming in above expectations and confidence staying at high levels for both business and consumers. Fed policy, despite the expected rate hikes ahead, remains stimulative, although less so than in previous months.

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More Trends to Watch: Millennials and the Global Economy

December 7, 2017

Yesterday, we talked about some of the current economic trends that have carried the markets up but that may be shifting in the near term. Indeed, those negatives are potentially very real, and we need to keep an eye on them. But there are also several emerging positive trends that are likely to show up in the next 5 to 10 years that should help us ride out those changes. Consider this the Tigger response to yesterday’s Eeyore message.

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3 Current Economic Trends to Watch

December 6, 2017

I have been wrestling with what to write about today. There’s not much to add that is new. The economy is doing well, and the data is coming in strong. Although the stock market is reacting to events in Washington, it is still within 1 percent of its all-time highs. From my beat, there is not a lot worth commenting on at the moment.

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The Tax Bill: What Matters Most for Taxpayers

December 5, 2017

Yesterday, I spent some time talking with my accountant, Dave, about the implications of the new tax bill as we understand it so far. The discussion focused on planning charitable giving, but I found the context of the pending tax bill to be illuminating beyond that. He made some excellent points about what really matters to most taxpayers that I thought were worth sharing. So, here we go. (Thanks, Dave!)

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Monday Update: Consumer Confidence Soars to 17-Year High

December 4, 2017

Last week gave us a detailed look at both how consumers are feeling and what they are doing, as well as the sentiment levels of manufacturing companies. Overall, the news was quite good. It matched or beat expectations across the board—suggesting that the recovery continues and may well accelerate.

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Market Thoughts for December 2017 [Video]

December 1, 2017

November proved to be another month of good news for the markets. U.S. financial markets were up across the board, and developed markets rose substantially. Hiring continued to do well, personal income grew, and consumer confidence rose to the highest level in 17 years. Plus, business confidence improved more than expected, and business spending was up.

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Dow 24K: Cue the Fireworks?

December 1, 2017

Well, the Dow has hit another milestone: 24K. Should we cue the fireworks, cheering, champagne bottles, and so forth? Since it is the fifth time this year that a 1,000-point milestone has happened, perhaps we want to take a step back first. Anything that happens five times in a year is hardly uncommon—and perhaps not worth getting all that excited about.

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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.

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