State of the Markets
How To Stop "Diworsifying" Your Portfolio
In yesterday's missive, we exposed the fact that a diversified portfolio is dramatically underperforming the return of the U.S. stock market in 2013. While some may argue that we will soon see this phenomenon dissipate due to the propensity of financial assets to ultimately revert back to…
Diversification (Is) For Dummies
Most investors, almost all 401K owners, and the vast majority of professional financial advisors will likely agree that diversifying your investment portfolio across asset classes is the key to long-term success. While history will likely bear out the validity of this thesis, here's a new…
Have the Bears Missed Their Opportunity (Again)?
Yesterday morning's meandering market missive ended with the following note, which seemed prudent at the time it was written: "While the bulls could always get something going should the situation in Syria subside quickly, the cycles suggest that it might be a good idea to be careful out …
What Do The Cycles Say About September?
Although our trek through Provence, the Cote D'Azur, and France's Château Country over the past couple weeks left little time for big-picture analysis of the stock market, the time spent on planes, trains, and automobiles returning to our side of the Atlantic certainly did. And whil…
Has the Fed Lost Control?
Good Morning. When there is no data to key off of, as has been the case so far this week, traders and their computers are basically left to on their own to ponder the big picture. And based on the action of the last four days, it doesn't appear that anyone is feeling especially optimistic…
It's Time To Let Price Be Your Guide
Good Morning. Having spent the vast majority of the weekend in a moving vehicle carting my youngest back to her college in Des Moines, IA, I had plenty of time to "noodle" on the state of the stock market. And with the indices (especially the DJIA) having broken down into what appears to …
What Does The Market Fear Most?
Good Morning. If ever there was a self-fulfilling bearish prophecy, this was it. Everybody, everywhere has been watching the same lines in the sand, the same data, the same earnings guidance, and the same speeches by Fed officials. Everybody, everywhere knew that internal momentum had bee…
The New Inflation Problem
Good Morning. When I entered the financial services business in 1980, inflation at the consumer level (the Consumer Price Index) was running above 14%. The situation was so bad that then-Fed Chairman Paul Volcker had declared war on inflation and was raising interest rates every time you …
Tapering Expectations?
Good Morning. While I hate to restate the obvious, stocks have been going sideways for the better part of the past month. And as can be expected, the two combatants in our stock market game have differing opinions on what this means. "Sideways is the new down!" is the battle cry of the gl…
What Do The Market Models Say - Part II
Good Morning. Although the S&P 500 is just a couple points off the all-time high set on August 2, there is an awful lot of chatter about stocks heading lower from here. There really isn't much in the way of new justification for the anticipated dance to the downside as the discussions…