December was a brutal month for the stock market. Here are the daily returns through Christmas Eve (losses of 1% or worse in red): Not only was the S&P 500 down almost 15% for the month at this point, but it was in the midst of a bear market that began in late-September: Then a…
Current Markets
Stock Market Counterfactuals
December was an awful month for stocks. The S&P 500 fell up to 15% at one point, culminating in the Christmas Eve shellacking which saw stocks fall almost 3% a day after they had fallen 2%. Stocks did rally more than 6.5% from that point until the end of the month. All told, the S&P…
Stocks Down, Yields Up
On this week’s Animal Spirits we discussed dividend yields in various stock markets around the globe and how they provide a silver lining during a stock sell-off: Here’s the chart we referred to on the show: Stocks have popped around 10% or so since the massacre on Christmas Eve but this is a nice…
10 Things Investors Can Expect in 2019
I have no idea what’s going to happen — in world events, politics, or the market — in 2019 (and neither does anyone else). This baked in uncertainty is what makes the financial markets equal parts maddening and fun to prepare for. There’s no way to reduce the inherent uncertainty about the future or know…
2017 vs. 2018 in the Stock Market
It takes the Earth roughly 365 days to orbit the sun so that’s what we’ve agreed upon as the definition for a full calendar year. Orbiting the sun has nothing to do with the financial markets but people still spend an inordinate amount of time figuring out what the new year will bring in the…
5 Thoughts on the Market Downturn
Some random thoughts on the current state of the markets… 1. This is why you own bonds. Here’s the aggregate U.S. bond market versus the S&P 500 and Russell 2000 ETFs over the past 3 months: In the past, people probably thought they owned bonds for the steady income stream. That may still be the case for…
The One Constant in the Stock Market
Something rare happened in the S&P 500 this year. The index has experienced a double-double-digit drawdown (kind of like double secret probation?) for the first time since 1990. That means the S&P 500 fell 10%, made those losses back, only to fall 10% yet again. The only other years on record I could find when this happened…
Normal Accidents in the Stock Market
Deep Survival by Laurence Gonzales is one of the best books I’ve read over the past few years. it’s a mixture of unbelievable stories of survival, bravery, stupidity, adventure, and the psychology of how humans react under pressure situation. Gonzales introduced me to the book Normal Accidents by Charles Perrow while describing complex systems: Perrow’s Normal Accidents, first published in…
When Cash Outperforms Everything
U.S. stocks were up double-digits well into 2018 and sailing along nicely until a funny thing happened — they stopped going up and went the opposite direction as they are wont to do. The Vanguard Total Stock Market ETF (VTI) is now down around 20 basis points on the year. Not only have stocks struggled…
