So, how should you invest in a rising rate environment? (Hint: If you don’t know the answer then don’t change what you’re doing.) The vast majority of people shouldn’t deviate from their investment plans at any point. As for the rest, they don’t need me to tell them what to do. Tune out the rising …
Month: April 2018
Inversion
Lots of concern in the media and world of academia about the flattening yield curve lately. The WSJ has a great article today putting the current slope of the yield curve in perspective. Basically, the yield curve has historically inverted 6 months to 2 years before the beginning of a recession. Everyone is clearly on …
Fear Index
The CNN Fear & Greed Index was highlighted this morning in one of the research publications I consume. I discussed sentiment in a post last week and I thought highlighting the index would be a good follow up to that post. CNN’s index is driven by seven indicators that include momentum, breadth, put-call ratio and …
Sentiment
Sentiment is one of the main drivers of stock prices in the short, medium and long-terms. Understanding sentiment and how it contributes to stock price movements and returns is imperative for all would be investors. Short-term sentiment is what drives the action in stock prices day in and day out. Think of the recent negative …
Expected Returns
As we officially begin earnings season in the US this week, we examined expected returns across asset classes and regions of the world. Not surprisingly, 10-year expected returns for many US based investments are expected to be weak relative to other regions of the world. Emerging markets appear quite attractive on a relative return basis.
CAPE – A different Perspective
I pulled this chart from Professor Shiller’s publicly available CAPE file on his Yale website. I found it to be striking simply for the fact the spread between the current S&P 500 index level and composite earnings appears to be so much wider now than it did in 1999/2000. The rise has been truly spectacular. …