A Look into Retirement Investment Opportunities in 2026
As we navigate the evolving financial landscape of 2026, one area that deserves careful attention is how retirement-savings rules are changing. Just as we focus on economic indicators to guide investment decisions, we also monitor legislative and regulatory changes that affect how individuals can save for the long term. This includes contribution limits to 401(k)s […]
A Look into Our Investing Process
As we plan for the coming months and quarters, we rely heavily on the process that guides our investment decisions. Rather than reacting to headlines or feelings, we focus on gathering and understanding how economic data is changing, and what that means for the economy. One of the most influential pieces of data that we […]
Increased Volatility Sometimes Happens in Election Years
Election years are often marked by increased volatility. Investors are generally uncertain about potential policy changes and their impacts on various sectors. This uncertainty can lead to short-term fluctuations in stock prices. This is especially true when the election outcome is still highly unpredictable.
STAGFLATIONARY TIMES AHEAD?
For some portfolio managers and investors, the desire for Fed interest rate cuts is akin to that of a sugar addict’s desire for his or her next candy fix. Both are signs that there are greater problems afoot. I’ll stick with the interest rate discussion since I’ve been known to enjoy one too many desserts, and I don’t qualify as a pillar of optimal health.
Are you onboard with the A.I Supercycle?
Seldom do I write in between my typical quarterly cycle of economic commentaries, but I feel compelled to do so today. Do you know what an economic “Supercycle” is? Depending on how old you are, you have witnessed at least one or two in your lifetime, and some of you have witnessed more. An economic Supercycle is a sustained period of expansion usually driven by robust growth in demand for products and services. (I pulled that definition from a Google search, which now seems so antiquated considering what lies ahead.)
Let’s get on with it, 2024
The market finished off Quarter 4 of 2023 on a welcomed high note. Stocks and bonds got a significant lift from the talk of disinflation and potential interest rate cuts in 2024. The most overused term in finance – “soft landing” – is still the hope of investors going into the new year.
Feeling Weary?… Then Zoom Out!
Rising interest rates lower the present value of future earnings for companies, which can cause stock prices to decline. Furthermore, the attraction to own fixed interest rate investments like CD’s and money market funds vs. stock market investments increases as interest rates move higher. Fixed interest rate investments tend to move in tandem up and down with inflation rates while stocks often act inversely.
Don’t Get Too Irrationally Exuberant
As an experiment, I took a crack at letting ChatGPT write this quarter’s market commentary. It was quite impressive how quickly it built the page. It took less than 30 seconds! Then, I read through it, and I was reminded that speed is not a substitute for accuracy. In the section regarding U.S. markets, it stated that market indices were at all-time highs, which is woefully incorrect. None of the U.S. stock market indices have regained their high points set back in late 2021. Next, it wrote a paragraph citing climate change and how renewable energy stocks are benefitting from accelerated acceptance and supportive policies. In fact, the most widely held clean energy ETF, iShares Global Clean Energy ETF, is down mid-single digits year-to-date in percentage terms so far in 2023. Suffice to say, artificial intelligence has some room for improvement.
“Risk happens slowly…then all at once.”
Approximately 50% of the NASDAQ 100 Index is concentrated in just seven stocks – Meta, Apple, Google, Microsoft, Amazon, NVidia, and Tesla. These seven stocks had a solid quarter in performance terms, yet only Apple stock is trading anywhere near all-time highs set back in the fall of 2021. Perhaps, these seven stocks were viewed by investors as a “safe haven” amidst a broader stock market that does not look much healthier than it did in all of 2022.
Using Data to Position Assets Favorably!
2020 was a year full of alarming statistics. One you maybe didn’t hear was that over 10 million new brokerage accounts were opened by first-time investors in just the United States alone! This influx was the result of three things: stimulus checks, a pandemic-induced market selloff, and the elimination of trading commissions at brokerage firms such as Schwab, TD Ameritrade, and Robinhood.
