Published September 6, 2019
For the past month stocks have chopped within a fairly wide range as the circled area on the chart below shows. Hemmed in by on-again, off-again trade tariff talks, stocks have made no progress over the past year. (more…)
A Mixed Bag Economy
Published August 30, 2019
Liz Ann Sonders at Charles Schwab recently wrote a thorough overview of the current economic state. Given the latest increase in economic uncertainty courtesy of the ramping of the trade war—but also last week’s release of the Leading Economic Index (LEI), her report is worth posting here for our subscribers who are interested in tracking the economy and musing about where that might be headed. (more…)
Business Cycle/Sector Investing Takes a Curve Ball This Cycle
Published August 23, 2019
Business cycle/sector investing is a seemingly easy way to apply a layer of insight to traditional buy-and-hold investing. By focusing our investment funds on sectors that typically show improved performance during certain phases of the business cycle, a sector investor can presume to outperform the broad market. However, it is never quite that easy. (more…)
The Dreaded Yield Curve Inversion
Published August 16, 2019
Like a surfer bounced by wave upon wave, investors were hit this week by a second wave. After a one day burst of market joy as the Trump Administration dialed back the September 1st imposition of trade tariffs, the U.S. Treasury bond market was rocked by a deeper reduction in yields. (more…)
Currencies in focus
Published August 9, 2019
This week’s shocking currency move by China brought currencies and their management into the spotlight. The Chinese lowered their currency “peg” to a surprisingly low number as a retaliatory move in the trade skirmish with the Trump Administration.
Earnings growth and outlook
Published August 2, 2019
As earnings roll in for the quarter, we post an article from Josh Brown that highlights analysis done by David Kostin at Goldman Sachs discussing the outlook for earnings growth.
Paying the bank to hold your money
Published July 26, 2019
As we’ve noted many times before, the stock and bond markets since the financial crisis have been driven for the most part by the policies of the world’s central banks. Central banks, such as the Federal Reserve in the United States (the “Fed”) and the European Central Bank (“ECB”), have been very sensitive to markets and have clearly sought to directly influence them. There is no question they have been successful in this task. Simply look back to December when U.S. markets were struggling.
Stocks and bonds both pushing higher
Published July 19, 2019
Below is a survey of markets through a series of charts with the idea being a quick scan to highlight the recent new highs, and how close other market indexes are to joining in those highs. The run higher in stocks has been largely propelled by optimism over a new round of Federal Reserve interest rate cuts, with investors preferring to take an optimistic view that the cuts in rates will avert a possible recession.
Our view of buy-and-hold investing
Published July 12, 2019
The vast majority of investment advisors and brokers preach the wonders of buy-and-hold. It is industry doctrine and much print is devoted to convincing clients that buy-and-hold is the only rational approach to investing. As trend-timers we have largely rejected the buy-and-hold mantra of the investment industry. But why do we reject it?
Emotions and investing – a primer on using TimingCube
Published July 5, 2019
As most investment newsletters we do spend a lot of time on the markets and what affects them, on technical indicators and investment vehicles. Another topic we visit fairly frequently in this column is the emotional side of investing which we judge to be just as critical for success. A long-term wealth building program must by definition be emotionally sustainable.