Tag

volatility

A Word About Cryptocurrency and Risk Management

By | The Friday Brief | No Comments

Here are two articles that came across my desk on Wednesday of this week: one in the morning entitled “Nearly a Third of Millennials Say They’d Rather Own Bitcoin Than Stocks,” and then one that evening entitled “‘$300m in cryptocurrency’ accidentally lost forever due to bug.” [As an aside, you’ve probably heard the terms “bitcoin” and “blockchain” thrown around with increasing frequency recently. An impossibly quick primer on the subject is as follows: “Blockchain” is the term used to describe a database technology that acts as a distributed, decentralized ledger, tracking transactions over the internet. The distributed ledger is “open,”

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Efficiently Using the Capital Markets for Lifetime Savings

By | Briefs about our Process, The Friday Brief | No Comments

It is a myth that people saving for life purposes need actively managed funds to comfortably reach their financial goals. In fact, it can be argued that actively managed funds significantly slow progress and reduce their lifestyles, both now and later, compared to efficient portfolios. Technically defined, an efficient portfolio delivers the highest return for a given amount of risk. Think of risk as the volatility of the portfolio, but more specifically, the chance of losing money at any given point in time. Risk and volatility have both practical and theoretical applications. We are hardwired to understand the practical. When we see our investments decline,

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Reports Suggest A Slowdown

By | The Friday Brief | No Comments

Evidence is mounting that the US economy is not immune to the contagion of the global economic slowdown. The Commerce Department announced today that the US economy expanded at an anemic (seasonally adjusted) 0.7% in the fourth quarter. This compares to advances of 2% in third quarter and 3.9% in second quarter of last year. Some argue that seasonal adjustments currently used by government statisticians do not reflect the evolving economy, but it’s hard to see how the economy escapes the downdrafts of global slowing, an unprecedented drop in oil prices and a surging dollar.

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How Much of Your Portfolio is in the Stock Market?

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2014 marked another good year for the stock market.  With a 13.7% gain including dividends, the S&P 500 finished in positive territory for the sixth year in a row.  The market never goes up in a straight line and 2014 was no different. Several major geopolitical events including Ebola, ISIS, plummeting oil prices and the Russian invasion of Ukraine caused volatility during the year.   In fact, the S&P 500 fell 7.2% from its September 18 peak before bouncing back in late October and November.   Here’s a chart of the S&P 500’s 2014.

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Good Perspective

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Some of the best advice during times of stock market uncertainty can be to turn off CNBC and ignore the financial section of your newspaper for a while.  That is, of course, if you’ve planned ahead and set up your portfolio to withstand the markets’s ups and downs.

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Dow 6000?

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If you visited the Yahoo Finance web page on Wednesday, you may have seen this headline: “Dow 6,000: Wild prediction or worthwhile caution?” The article behind the headline is about a guy named Harry Dent. Dent has made a number of market predictions over the past few decades–his latest being that the Dow will plummet to 6,000 by late 2016 or early 2017 – the Dow recently closed around 17,000. Like many people who make predictions in large volumes, Mr. Dent has gotten a couple right. In the late 1980s he forecasted that Japan would enter a period of extended economic slowdown. In

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Turbulence Ahead

By | The Friday Brief | No Comments

Reality is setting in once again for investors that the Federal Reserve can’t keep funding the so-called recovery forever. Stocks sank yesterday due to stronger-than-expected domestic growth and the likelihood that European growth will soon improve spurred by a rate cut in that region yesterday.

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