Category Archives: Strategy

Waiting for the Fed

The Fed’s policy makers, the FOMC, meet on December 15th and 16th and are widely expected to raise the target Fed funds rate for the first time since 2006.  The odds of a 25 bp increase in the target range to 25-50 bp is about 77% based on Fed Funds futures.  There are two key Read more […]

Is China a Building Block in Your Portfolio?

After China’s stock plunge in Q3 2015, many investors have had two different views toward China.  The bearish camp avoids buying Chinese stocks, as they think the Chinese market is volatile, and that the earlier stock market bubble has not fully burst when it comes to the problems of shadow banking, margin lending, and an Read more […]

The FOMC and GDP: Not As Confusing As It Looks

The statement issued by the FOMC, the Fed’s policy making unit, following its meeting on Wednesday sent a clear message that the central bank expects to raise interest rates at its next sit-down in December.  Thursday morning at 8:30 AM the Bureau of Economic Analysis published the advance estimate of third quarter GDP showing a Read more […]

Rising Rates’ Silver Linings

Bond values will, definitionally, fall when interest rates rise. However, different types of bonds have differing characteristics. The chart below shows the annual performance of the S&P 500 Bond Index and the S&P/BG Cantor 7-10 US Treasury Bond Index. (The S&P/BG Cantor 7-10 US Treasury Bond Index is the treasury index most similar to the Read more […]

Losing My Religion: Value in the USA

If simple is beautiful, then value investing is the equity market’s Helen of Troy – the faith that launched a thousand funds.  If a company’s assets or profits are high in relation to its share price, it does not require much imagination to suppose that such company might offer attractive long-term investment prospects. Value is Read more […]

The Fed and the Debt Ceiling

Two distractions creating uncertainty for the treasury market right now are the debt ceiling and who said what at the Fed. Both annoyances should fade away, one in a few weeks, the other possibly not until sometime in the first half of 2016. The debt ceiling law dates back to shortly before the Second World Read more […]

Home Prices Are Rising Faster Than You Think

Prices of existing single family homes, as measured by the S&P/Case-Shiller National Home Price index, are rising is single digit terms.  However, the price changes that matter – the real or inflation adjusted changes – may be higher than many suspect. Backing out inflation, as shown in the chart, gives real increases averaging 6.3% annually Read more […]

Most-Read Blog Posts Q3 2015

In case you missed them, we’ve compiled the most read blogs from the third quarter below. Timing Gold Is A Fool’s Errand Has gold reached its bottom? Inside the S&P 500®…. Bonds! What is the S&P 500 Bond Index and how does it compare to the iconic S&P 500? China’s Currency Devaluation and Its Impact Read more […]

Speculating About the Fed’s Timing

Little new data, lots of chatter from Wall Street and no clear signals about what the Fed might do at next week’s FOMC meeting. The announcement, either no change or a rate increase, is expected on Thursday afternoon September 17th around 2 PM Washington DC time. Those looking for some hint of what this might Read more […]

The Fed Puzzle Continues

Among analysts and Fed watchers, no matter what they expected from the Fed, they were all confident that this morning’s August Employment report would reveal the future.  No luck. If anything, the report had something, but not enough, for everyone. The increase in payrolls was 173,000, far below the 220,000 expected; the previous two months Read more […]