Can You Beat the Market?

Posted on Posted in Market Commentary, Personal Financial Planning

Economist Justin Wolfers, who has a PhD from Harvard, published an article in the New York Times on September 30th called “Debate Night Message: The Markets are Afraid of Donald Trump”. I quote the article’s first two sentences: Political leaning aside, let’s breakdown this argument. The article proceeds to tell us that “decoding markets is no easy task”, the process used “close analysis of financial markets during Monday’s debate” and cited specific examples of what Trump said versus how the market on a whole reacted to it. Wolfers also cited his conjoined research with two other well-respected economists at venerated […]

Crying Over EU

Posted on Posted in Market Commentary

The clock is ticking as the June 23rd European Union (EU) referendum approaches. Should the UK stay or should it go? Britain’s decision to leave the EU boils down to questions of migration. Foreign born residents in the UK and Wales have doubled, from 7.3% to 13.4% of the population, in 20 years. The UK has an average of 500 people added to its population every day. A vast number of UK citizens are growing tired of the open borders of their country. These people make up the “leave-camp”. Departing the EU would result in an immediate cost savings, as […]

Dovetailing the Moving Parts of 2016

Posted on Posted in Market Commentary

Dovetailing the Moving Parts of 2016 “So goes January, so goes the year[?]” – Wall Street Axiom (question mark, mine) If this holds true, we can expect Mr. Toad’s Wild Ride this year. However, predicting the next few days is a futile exercise, so predicting the next year is wildly unrealistic. We can expect only the following: The long run average real return (data from 1802-2015, thanks to Jeremy Siegel): You’re likely thinking, “these return numbers are irrelevant to me, unless I end up like Fry from Futurama.” While this is likely true, long run average return numbers are still […]

Rise of the Mega Cap

Posted on Posted in Market Commentary

The world is an ever changing place. As we become more globalized and interconnected in the 21st century, corporations have ballooned into the age of the “mega-cap”. The first release of Apple’s iPod in 2001 marked the beginning of something great for the company. Apple shocked the world with the first generation iPhone in 2007, with its slogan “This is only the beginning”. It made headline news when Apple’s market capitalization overtook that of Exxon Mobil’s in August of 2011, only a year after the release of the iPad. The dawn of a new age of colossal technology has come […]

Currency and Volatility

Posted on Posted in Market Commentary, Personal Financial Planning

“Be fearful when others are greedy and greedy when others are fearful.” -Warren Buffett The third quarter certainly showed much to fear, with China and Syria topping the list. Market participants sold risk assets in anticipation of poor growth out of both China and multinational corporations’ China strategy. Both the Chinese economy and the American economy are essential to global growth. The Chinese economy is not falling off a cliff, instead its growth is merely slowing down, much like our own growth rate, which has slowed over the past 20 years. As the pool of capital becomes larger and the […]

China and Other Stories

Posted on Posted in Market Commentary

August has been a particularly nasty month for risk assets. This period appears to be more serious than the brief market correction we saw last October. News of problems in China, particularly of a shrinking in their manufacturing sector has caused investors to indiscriminately sell equities, purchase government bonds, and raise cash in money market accounts. Markets seem to decline quickly in recent years only to bounce back nearly as swiftly. Corrections have been short-lived non-events since 2011. Despite being in a bull market, in recent years the VIX (measure of market volatility) has seen shocking intraday rises. On Friday […]

Lessons to Learn from Puerto Rico

Posted on Posted in Market Commentary

Puerto Rico has a population close to Connecticut’s, with land area twice the size of Long Island’s, and a GDP near that of Mississippi. The country also has more debt than any other state in the US at over $70 billion, with the exception of New York and California. I’m not going to spend this memo discussing mundane investment cycles or economic conditions, but rather supply some perspective on the situation and what we can learn from it, not only in our investment portfolios, but also in our overall decision making. Puerto Rico is a colony in a post-colonial world […]