On January 1st, China informed the American government that a new pathogen, soon to be called the coronavirus, had been discovered in Wuhan, China. Its toxicity and infection rates were still unknown but soon proved to be far more virulent than many prior viruses. There was no medical cure. Epidemiologists warned that a global pandemic could result. The contagion in China so ...
Q4 2019: "New Highs"
Investing is often confused with trading. Good long-term investing is not for the faint of heart. Longer-term political, economic, and capital market trends, rather than short-term portfolio positioning requiring the need for an accurate forecast, is often the most reliable route for investors. Important secular trends include the continuing democratization of stock market investing, with zero online trading fees and fractional shares. The combination of a robust U.S. economy, a thoughtful Federal Reserve...
Q3 2019: "Economics in the Time of Twitter"
It has been a good year for U.S. investors. The global economic slowdown and geopolitical turmoil created a nearly irreversible thirst for super safe assets as reflected by the Barclays AGG bond index gaining 8.5%. At the same time, the health of the U.S. economy produced robust gains in equities, with the S&P 500 index up 21%. Happy surprises included long-term Treasuri ...
Q2 2019: "Trump Economics"
The quarter was a good one for investors, overcoming fears of an all-out U.S.-China trade war. The S&P 500 index rose roughly 4% for the quarter and was up 17% for the year. It was the market’s best first half performance since 1997 and extended the more than decade long bull market. But it wasn’t until April this year that the S&P 500 climbed back to its October 201 ...
Q1 2019: "Turnabout"
Perspectives U.S. stocks experienced their biggest quarterly gains in nearly a decade. The S&P 500 completed its best quarter since 2009, gaining 14%, while the S&P MidCap 400 and S&P SmallCap 600 gained 14% and 12%, respectively. The VIX ended March at a low of 13.7. Major indices have recouped almost all of the losses experienced in the prior quarter. Notably ...
Q4 2018: "No Place to Hide"
"Market volatility experienced in the last week of 2018 has been described as something no one has ever seen before. A 700-point decline in the Dow followed by a 1000-point rise the following day followed by a 600-point decline during the day only to end up 200 points above the prior close at the end of the day. The result was a dizzying investment moment. How to understand such persistent dramatic volatility? Is cash ultimately the only safe asset?"
Q3 2018: "A Historic Bull Market"
Markets As the quarter ends, the Dow Jones and S&P 500 indices, fueled by growth stocks’ appreciation, are at all-time historical highs, dominating the return from global investing. While the MSCI ACWI rose more than 3.5% for the quarter and 2% for the year, the MSCI ACWI-ex US was flat for the quarter and declined more than 5% year-to-date. In general, international equ ...
Q2 2018: "Tariffs and the End of Stimulus"
"Despite extreme international and domestic political risks, domestic equity volatility as reflected in the VIX, interrupted only by the prior quarter, was slightly below historical norms at levels that have persisted since March 2009 through the end of 2017. The U.S. equity market continued to outperform many international indices. It is a story very much associated with central bank policies..."
Q1 2018: "The Return of Volatility"
"This quarter marked an inflection point in market volatility. 2018 brings the first negative quarter for the US or global markets since 2015. These nine quarters of positive returns compare to the record 14 consecutive positive quarters for the S&P 500 ending in 1998. January began the quarter with another month of rising markets and low volatility, albeit with the dollar falling and interest rates rising, but then the market environment changed..."
Q4 2017: "The Volatility Enigma"
"The fourth quarter of 2017 closely resembled much of the first three quarters – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors..."