The most important change in Fed Policy four decades In his press conference during March, Chairman Powell emphasized that monetary stimulus will remain until the labor market has achieved maximum employment and inflation is above their 2% target, for some period of time. Since Volcker broke the back of runaway inflation in the early 80’s by raising rates to 20%, the Fed has engaged in pre-emptive rate hikes based on their economic forecasts. Put simply, [...]

How has the market done this year? An easy question one would think. And often, it is quite easy, but not this year. Below is a table of different market indices with performance up to but not including the big dive in the market last Thursday. The second index from the top with the yellow dot to the left is what most people think of as “the market” – it is the S&P 500. [...]

Is the Stock Market overvalued? We are going to try to answer this age-old question, but before we do, we want to remind you what we think of valuing the markets. Valuation should never be used to judge if the market should be bought or sold. Valuation is a way to measure the potential for future long-term returns, especially when determining if the market is overbought. The economist John Maynard Keynes said, “markets can remain [...]

Why did the market go down so much, and why has it rallied so much? The market started the year with upside momentum and the hope that a US China trade deal would help kick start the global economy. The market was up about 10% by February, but the outbreak of Covid-19 quickly derailed the upside momentum and changed the way we look at our world, probably a few times in different directions. From the [...]

We want to remind clients why we outline our thoughts on the markets every quarter, and more often when volatility picks up. We believe that following the trends in the market is far more effective than predicting an often-uncertain future. We seldom attempt to “call a high” in the market, as this is usually a fool’s game that causes more harm than good in portfolios. Accordingly, if the market is in an uptrend you [...]