It’s become an annual tradition on this blog to update asset class returns on an asset allocation quilt I created for a few reasons: (a) Asset allocation is typically the most important aspect of portfolio management so understanding how the various asset classes performed is instructive when trying to understand your results. (b) This is a…
Market History
Buying When Stocks Are Down Big
Captain Obvious here: It hasn’t been a great quarter for the stock market. The S&P 500 is down roughly 17%. There have been more than 370 quarterly returns since 1926. If the quarter were to end today, this would be the 14th worst in that time frame. The list of the other big down three month periods…
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…
What If You Retire At a Stock Market Peak?
Meet Sam. Sam’s entire family has terrible luck when it comes to the timing of their retirement. Sam’s great-grandparents retired at the end of 1928. Over the ensuing three years or so the stock market would drop close to 90% while the U.S. economy would contract nearly 30% in the Great Depression. In 1937, the…
Trends & Time Lapses
One of the reasons the fire-hose of information can actually make it harder to analyze the state of the world is because many people simply use point in time data instead of taking time to look at the overall trend. Current data tells you very little unless you’re able to provide context about where it’s…
Can the Stock Market Predict The Next Recession?
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…
