The Independent Market Observer

The Velocity of Money: 2019 Edition

January 17, 2019

Economic questions come in cycles. Recently, with the relatively hawkish tone of the Fed and the turmoil in Washington, DC, economic worries have spiked again, and the velocity of money has become a hot topic. I last touched on this in early 2017. It has been one of the most viewed posts since then, so clearly it is time for an update.

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Investing Is Hard

May 24, 2018

After last week’s posts on how I invest, I have been talking with a number of people, in person and online, about how they approach investing. It has been a very interesting and educational week, and I have come out from it with one conclusion: investing is hard.

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Indices: Market-Cap Weighting and Beyond

May 23, 2018

We closed yesterday’s post on passive investing with the observation that while market-capitalization-weighted indices (i.e., stock indices that include stocks based on how much the company is worth) have certain biases baked in, other indices have their own—but different—biases. There really is no perfect solution, and you just have to be aware of the bets you are making. That is what we will talk about today.

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Different Ways to Be a Passive Investor

May 22, 2018

After last week’s series about how I invest, a reader raised an excellent point with respect to passive investing. With all of the flows into passive strategies—pushing many stocks higher without regard to their individual merits—is it a safe time to go passive?

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Thoughts on How to Invest

May 15, 2018

Given what I do all day, you might imagine I have this investing thing all figured out. In fact, I probably wrestle with it more than most people. Part of what I do is think about many different types of investments and strategies. With all of those options in my head, it can be hard to make decisions about what is best, for me, at any given time and situation. Right now, for instance, I am in the process of putting what is (for me) a largish amount of cash to work. Do I buy in, despite my concerns about valuations? Do I wait and forgo any interim returns? If I decide to buy in, what should I buy?

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Active Versus Passive Investment Management: A Different Take

November 24, 2017

One of the major issues in the financial world is active versus passive investment management. The terms themselves are a bit of inside baseball, but it might help to think of them like this: Active managers say they are smart enough to beat the market and try to do so. Passive managers, on the other hand, say no one can beat the market and so just own it.

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Halfway Through Earnings: More Treats Than Tricks?

October 31, 2017

As of the end of last week, more than half (55 percent) of companies in the S&P 500 had reported earnings for the third quarter. So, it makes sense to see where we are and what that means for the markets. On the whole, the news is good. But it has to be understood in the context of the recent hurricanes, which—to no one’s surprise—have hammered earnings in the insurance sector. (All of the data here comes from the FactSet Earnings Insight analysis.)

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And the 2017 Bubble of the Year Award Goes To . . .

August 25, 2017

Eagerly anticipated by all, it’s time once again to award the Bubble of the Year statuette, affectionately known as “the Bubby.” The award is a long-standing tradition, dating from yesterday afternoon, when I spent some time contemplating the day’s bitcoin pricing. With bitcoin up roughly 50 percent so far this month—and increasing significantly during this past year—we must ask, “Is this a bubble?” And if so, “What exactly is a bubble?”

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The 4-Letter “C” Word for Investors: Cash

August 17, 2017

Recently, many readers have asked me about where the market is, as they are worried about what to do with their portfolios. The gentleman behind the grill at the café where I get breakfast, who knows what I do, has the same questions for me. Advisors want to know what I think about gold as a risk reducer. Almost every day for the past couple of weeks, I have heard about the nervousness. People are getting scared.

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More on Investing and Time Frames

July 26, 2017

The other day, I got a question about my recent webcast on the economy and markets (something I do quarterly for clients). The questioner pointed out that I sounded pretty optimistic and wondered how that squared with my concerns about next year and my belief that 2017 looks quite a bit like 1999. A fair question. But what’s the answer?

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