While the U.S. stock market tests new highs, and valuations keep rising farther above long-term averages, you may not have noticed something very odd about our current bull market. The last six and a half years have set a record for lowest market volatility, and the past 299 trading days, starting in November of 2016, has set an even bigger non-volatility record. The markets have been eerily quiet for longer than they ever have been before.
Continue reading Eerily Quiet on the Market Front
You might wonder why there wasn’t more media coverage of one of the most interesting bets ever made in the investment world. We’re not talking about betting on a company; this bet was made between Berkshire Hathaway chairman Warren Buffet and a hedge fund called Protégé Partners, on whether a basket of hedge funds managed by algorithms and super investors would beat a simple S&P 500 index fund over a period of 10 years—which happened to include the Great Recession and one of the longest bull markets in history. Each side put about $320,000 in 2007, with the proceeds—including all gains—going to charity.
Continue reading When the Index Beats the Algorithms
One of the oddities of a significant bull market—and this one we’re in today qualifies, as the second-longest in modern American history—is that they tend to go on longer than you might expect from the pure market fundamentals. The last leg of a bull market tends to be driven by psychology; people have recently experienced an up market, and so they tend to expect more of the same. They buy at prices they would never consider buying at when the markets have experienced a downturn, driving prices ever higher without regard to the price. As a result, the long tail of the bull market will also see some of the greatest, fastest increases.
Continue reading “Bearing” in Mind
One candidate for the greatest bull market run in financial history is the recent runup in price of the Bitcoin—the crypto-currency favored by international arms dealers and drug cartels, but also gaining acceptance at some retail locations. The so-called “internet of money” is not backed by any government, which its promoters say is a good thing, because the currency is not subject to QEs or over-caffeinated printing presses in Washington, Brussels or Tokyo.
Continue reading Crypto-Bubble
The current bull market in stocks will reach its 8th anniversary tomorrow, and for about the last four years, professional investors and financial planners have been scratching their heads. The markets have gone up and up and up, and we all know that they won’t go up forever, which means there’s a correction looming somewhere on the horizon.
Continue reading What a Market Top Looks Like
Over the last few weeks, professional financial planners have been fielding calls from clients who are asking the kinds of questions that every professional investor hates to hear. The Dow has reached (and then fallen back below) 20,000. Should I take money off the table?
My preferred candidate didn’t win the election, and I think the world is going to hell in a handbasket. Don’t you think I should sell my stocks now before it’s too late?
Continue reading How to Reset Your Portfolio (Regardless of What You Think of the Markets)
You know you’re deep into a longstanding bull market when you see things like average pedestrians keeping one eye on the market tickers outside of brokerage houses to see when the Dow Jones Industrial Average has finally breached the 20,000 mark. Who would have imagined record market highs at this point last year, when the indices ended the year in negative territory? Or when new year 2016 got off to such a rocky start, tumbling 10% in the first two weeks—the worst start to a year since 1930?
Continue reading 2016 Year End Report