Most strategic asset allocation strategies have produced negative returns over the last two years. A 60/40 allocation of Vanguard Total Stock and Vanguard Total Bond is down over 6%. John Bogle's 3-fund portfolio, a global approach that includes an allocation to Vanguard Total International is down nearly 9%. Morningstar has a diversified portfolio that includes 11 different ETFs and it's [...]
"Higher for longer." That's what the Fed says they intend to do with interest rates and investors finally decided to believe them last week. Bond yields, which have been stagnant since peaking last October, finally broke above the trading range they've been in for all that time. Short-term rates also moved higher but not as dramatically and the result was [...]
The stock market was down a little over 2% last week in what may be the start of a larger correction. Or not. Technically it is easy to make a case for a little more downside to the 50-day moving average, a total pullback of about 5%, and then a resumption of the uptrend. That's what happens in bull markets. [...]
Why aren't we in recession yet? That's a question that has been asked often over the last year but with no real satisfying answer. I have my own beliefs on the subject, rooted in the distortions of COVID. (You can read about it in my latest Follow The Money piece) I think my explanation is a pretty good one but even [...]
I spend a lot of time thinking about what "everyone" else believes about the economy and markets. If you've been reading my weekly scribblings for any time, you know I have little faith in the soothsayers of this industry. No one knows what the future holds, least of all that group of crystal ball gazers known as economic forecasters. Most [...]
Should investors be worried about the impending breach of the US debt ceiling? A default would be catastrophic according to numerous news articles I've read recently. Well, to be honest, I didn't read past the first few paragraphs of most of those articles because if you've read one of them, you've read them all. Obviously, a default would be bad [...]
What is long term? That's a question with many answers depending on your point of view. Some people might think a year is long term. I had a client tell me once that he was so old he didn't buy green bananas because he might not be around to eat them. Some might say 3 years is long term but [...]
What is the state of the US economy? When will this long-anticipated recession finally arrive? And when it does, what does it mean for investors? Those are the questions everyone is asking and the answers are, well, hard. Despite years - decades, centuries? - of research, there is no accurate way I know of to predict the timing or depth [...]
The first quarter has come to a close and things have changed a lot...and not very much at all. Expectations coming into the year were that rates would peak in the spring at around 5% and then fall in the second half of the year to about 4.5%. That was the highest probability outcome according to the futures markets. Of [...]
There has been a lot of angst over the last couple of weeks about a potential banking crisis. There have been 4 failures so far: Silvergate, Silicon Valley Bank, Signature Bank, and Credit Suisse. The first of these hasn't been mentioned much because it was primarily associated with lending in the crypto market and, as far as I know, there [...]
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