Tag Archives: equity markets
The Road Less Traveled
It is a truth universally acknowledged that liquidity is critical to market health; typically when liquidity falls, volatility rises. The Financial Times recently cited claims that the increased use of passive investment vehicles had caused trading volumes in individual S&P 500 constituents to decline. Should we be alarmed? In reality, the notion that single-stock traders…
- Categories Equities, S&P 500 & DJIA, Strategy, Uncategorized
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Breaking Down Volatility
“Data! Data! Data!” he cried impatiently. “I can’t make bricks without clay.” – Sherlock Holmes (in “The Adventure of the Copper Beeches”) Despite yesterday’s hand wringing loss for equity markets— the S&P 500 dropped 3.3%—the index is still up 5.8% year to date 2018. Nevertheless, losing in one day a third of what the equity market…
- Categories Equities, S&P 500 & DJIA
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Back to Normal…Almost
It’s been a roller coaster week in the aftermath of the startling conclusion to the U.S. Presidential election on November 8, 2016. As recently as a week before the election, equity markets were quite calm, although volatility levels recognized the possibility of a surprise Trump victory. When that victory occurred, U.S. futures declined significantly before…
- Categories Equities, S&P 500 & DJIA
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Dividend Volatility and Correlations
Equity markets are notoriously volatile, at least when compared to fixed income. Dividend payments, by contrast, while not fixed like many bond coupons, offer market participants a much less volatile and more fixed income-like risk and return profile. For the 25 years from 1990 to 2015, the annual variation in S&P 500® dividend points has…
- Categories Equities, S&P 500 & DJIA
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