As you’ve undoubtedly heard, the U.S. housing market has softened a bit in recent months due to a variety of factors. Rising mortgage rates are the most recent culprit, adding to a list which has included low inventories of homes available for sale, a preference to rent vs. own, high prices/crazy bidding wars, etc… The …
Month: October 2018
Exploring the Rise in Rates
A low interest rate environment has been a key catalyst to the rise in stocks since the last recession. The overall trend in rates has been down but hit an inflection point a little over a year ago when the Fed announced it was going to begin the process of reducing the size of its …
The Case for Emerging Markets
While short-term pain is hard to withstand, longer-term investors may greatly benefit in the years to come by buying into emerging market weakness. Swedroe has a great piece on etf.com explaining why emerging markets matter. Hint: Diversified portfolios with exposure to US and emerging market equities have historically had higher risk-adjusted returns than U.S. only …
Flattening Yield Curve Signals
Great letter from the SF Fed on the flattening yield curve as a recession indicator. The Slope of the Yield Curve and the Near-Term Outlook “Using both a descriptive approach and evidence from a dynamic model of Treasury yields, I find that the risk of a recession within the next year is only slightly higher …
The Complexities of Uncertainty
It’s been an interesting few days with rates moving higher at a fairly rapid pace, at least relative to what we’ve seen in the past several years. People get caught up in absolute rate levels as if there’s some magical threshold that tips the pendulum into unfavorable territory for stocks. That magical rate level may …