Tag Archives: Equities

Do Dividends Really Pay?

What benefits do dividend payments and dividend yields convey? The answers may sometimes be overlooked as market participants seek equity income or the perceived safety of dividend strategies. In 1961, Merton Miller and Franco Modigliani (M&M) theorized that dividend policy is irrelevant to company value.[1] Of course theories are models of reality and require simplifying Read more […]

What’s In A Sector?

Following an index announcement stating Nektar (NKTR) among other stocks would be moving to the S&P 500 prior to the open on March 19, 2018, an inquiry came in about the index impact of NKTR on the S&P SmallCap 600 Health Care Index performance.   Given the stock rose over 70% in 2018, it seemed reasonable to Read more […]

No Longer Calm but Not Chaotic

Although market volatility has retreated somewhat since the spike in early February, it has remained elevated. In the last 30 trading sessions, the S&P 500 moved by more than 1% (in either direction) 14 times. VOLATILITY FOR S&P 500 (21-Day Rolling) Volatility manifests itself in both dispersion (a measure of the magnitude of differences among Read more […]

How Much Will My Retirement Income Cost? Part 2

Understanding how much future spending, or consumption, an investor’s savings can support is critical in planning for retirement. As we discussed in part 1, the S&P STRIDE Index Series can help by providing a framework for estimating the annual income stream available in retirement using the concept of the Generalized Retirement Income Liability or “GRIL” Read more […]

How Much Will My Retirement Income Cost? Part 1

Gaining clarity around the future spending, or consumption, that an investor’s savings can support is critical in planning for retirement. Being armed with information about retirement preparedness can inform one’s decisions about savings rate, expense budget in retirement, and investment selections. A first step towards solving this challenge is to understand how much retirement income Read more […]

How Global Is the S&P 500?

The S&P 500® is widely considered one of the best single gauges of the U.S. equity market. Composed of 500 companies that are domiciled in the U.S., the index captures approximately 82%[1] of the total U.S. equity market value. An index of U.S. companies may lead one to assume that the index is only reliant Read more […]

What a Portfolio Might Look Like After Adding a Pinch of Real Assets

In December 2015, S&P Dow Jones Indices launched the S&P Real Assets Index, the first index of its kind, which is designed to measure global property, infrastructure, commodities, and inflation-linked bonds, using liquid and investable component indices that track public equities, fixed income, and futures. The S&P Real Assets Index includes global infrastructure (35%), property Read more […]

Vectors of Volatility

Risk is once again part of investors’ vocabulary. Through yesterday’s close, the S&P 500 lost a total of 6%, made all the more jarring by the practically straight line rise in most of 2018 prior to the losses. Volatility has, of course, ticked up, but in the context of the broader 27 year history, not Read more […]

Selling Equity Options or VIX® Futures: Two Different Ways to Short Volatility

2017 was a great year for shorting VIX futures strategies. The S&P 500® VIX Short-Term Futures Inverse Daily Index returned 186.39%. Selling volatility does not rely on interest rates or dividends. Historically, investors have been selling options to generate income. Compared to selling equity options, selling VIX futures is an operationally simple strategy that can Read more […]

2017…Among the Sleepiest of Years

If 2016 was unremarkable, 2017 was downright sleepy…at least as far as equity markets were concerned. In 2017, the S&P 500 notched the lowest level of volatility in 27 years. Both dispersion and correlations were among the lowest levels in the same period. This is in spite of a year that was far from lacking Read more […]