As of this morning’s cold open, the S&P 500 is down 7.5% or so. The Fed is hiking interest rates. Mortgage rates are rising. Homebuilder stocks are getting annihilated. The economic recovery is well into its ninth year. The unemployment rate is the lowest it’s been in 50 years. People are asking — are the markets predicting…
A Lost Decade of Dollar Cost Averaging
Investors who dutifully put money into the stock market on a periodic basis over the decade ended in 2009 would have felt dejected when looking at their statements. If you started dollar cost averaging $500/month into the S&P 500 in January of 2000, by December of 2009 you would have invested $60,000 in total. This…
Allow Myself to Contradict…Myself
A reader asks: Does your Bond Bear Market note contradict your previous case for bonds? The conclusions are unclear to me. I can see how this could be confusing. In a post last week I discussed the potential for bonds to do well if all the right pieces fall into place which was followed up…
How To Stay in the Game
Everyone remembers game one of last year’s NBA Finals between Golden State and Cleveland as the JR Smith game. After rebounding a missed free throw with just under 5 seconds left Smith dribbled out the clock, not realizing the Cavs weren’t winning but rather tied with the Warriors. This picture of LeBron’s dismay with Smith…
Animal Spirits Episode 51: The Healthy Correction
On this week’s Animal Spirits with Michael & Ben we discuss: The recent market turbulence. Maybe 401ks won’t provide a floor under the market. The problem with 401k loans. The rise and fall of Sears. How Buffett predicted Eddie Lampert’s struggles with Sears 10 years ago. The similarities between Sears and Amazon. The impact of…
The Worst Kind of Bear Market
On a recent episode of his show, Behind the Markets, WisdomTree’s Jeremy Schwartz made a comment about a stat from one of Jeremy Seigel’s books. He discussed how in real terms, bonds in the U.S. have actually experienced a much longer bear market than anything witnessed in the stock market. This makes sense when you…
Advice For Young People Trying to Break Into The Finance Industry
A reader asks: I am considering starting the CFA program now while in my last year of college and then taking the level 1 exam right after graduating. My question for you is, price of the program and exam aside, do you think there is a benefit to getting started while in college so that…
Who Benefits From a Market Correction?
Jerry Seinfeld is the ultimate “it’s funny because it’s true” comedian. His night guy vs. morning guy slays because this is me all the time: We all have competing ideas and beliefs in our heads on a regular basis. Enjoying yourself in the present vs. delaying gratification for the future. Working hard vs. playing hard. Your…
Big Down Days
Yesterday the S&P 500 fell 3.29%. It was the worst single-day loss since early February when stocks fell 3.75%. Looking back at the daily returns on the S&P 500 since the fall of 1928 shows stocks have seen 325 days with losses of 3% or worse. That means it happens roughly three-and-a-half times a year…
Animal Spirits Episode 50: A Committee of Geniuses
On this week’s Animal Spirits with Michael & Ben we discuss: How social media has changed financial media for the better. The humble beginnings of this podcast. The case for investing in bonds. More hedge fund closures. Julian Robertson’s poor timing. Your adult children are killing your retirement savings. The Bernank and why so many people misunderstood…
