Market Summary – Q4 2012: The Year It Didn’t Happen:
Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur. The plunge off the so-called fiscal cliff was averted. The euro zone did not fall apart. China’s economy and stock market did not crash. The bond market did not implode. The re-election of President Barack Obama did not derail the US market. The “flash glitch” in early August did not lead to further trading disruptions. Doomsday did not arrive on December 21, as some interpreters of the Mayan calendar suggested it would. Instead, the...
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Markets are said to “climb a wall of worry”, which is just what they did in the past three months as investors continued to buy stocks despite the coming “Fiscal Cliff” and lessons of history that labeled September as the cruelest month for equities. In our conversations with clients over the past few months, it seems we hear a lot of sentences begin with a phrase something like “in this economy”. The context is that a piece of good news or a positive result is somehow unexpected or doesn’t really fit with the current meme of a global financial crisis. Quite unexpectedly, it seems, 2012 is...
Read MoreMarket Summary- Q2 2012
Australia’s champion racehorse Black Caviar is unbeaten over twenty-two races. Think of her as a growth stock with four legs. With a brilliant bloodline and a huge fan base—she even has her own Facebook page—Black Caviar is turning into the most popular racehorse since the legendary Phar Lap.The five-year-old mare prevailed in Britain’s premier racing event at Royal Ascot late last month. But unless you own part of Black Caviar, you’re unlikely to make much money from placing a bet on her fortunes. “The Wonder from Downunder,” as she is known, pays close to...
Read MoreMarket Summary – Q1 2012
Should Investors Buy High-Dividend Stocks? With bond yields still hovering around historic lows, some investors may be tempted to consider dividend-paying stocks as a way of generating income from their portfolios, presumably with the benefit of not having to sell from their principal. But before embarking onthis strategy, it is important to understand several considerations: SIMPLE MATH: When firms make dividend payments, it is relatively common for the stock price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid. For example, an investor...
Read MoreMarket Summary – Q4 2011
Fourth Quarter 2011 Global Diversification Fourth Quarter 2011 These portfolios illustrate performance of different global stock-bond mixes. Those with larger allocations to stocks are considered riskier but also have higher expected returns over time. Hypothetical allocations are for illustrative purposes only. Global Stocks represented by MSCI All Country World Index (gross div.) and Treasury Bills represented by US One-Month Treasury Bills. Globally diversified portfolios rebalanced monthly. Data copyright MSCI 2011, all rights reserved. © Stocks,...
Read MoreMarket Summary – Q3 2011
What’s Been Happening?
Stocks all over the globe fell precipitously starting in the middle of the third quarter. The small stocks and relatively cheap “value” stocks in the mutual funds we use suffered even more.
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