Blog

Everyone knows the expression “playing with fire” is a way to say someone is engaging in risky behavior, and it is frequently implied the consequences of that behavior could be particularly painful.  Yet, we couldn’t live without fire, be it a furnace, or an oven, or even a nice fire in the fireplace on a chilly winter night that makes the season’s weather tolerable, if not downright cheerful.  We couldn’t live without fire, yet playing with it is how we describe overly risky behavior. Volatility in an investment portfolio can be useful like the properly controlled fires we use on…

Before getting into a fairly high-level overview of markets as we see them, we thought it worth commenting on a few more socio-macro themes. Not only do these things matter because they affect our day-to-day lives more directly than markets, but they ultimately create the landscape in which markets function. First, and we’ve commented on this quite a bit, the rift between the haves and have-nots is increasing at an accelerating rate. Regardless of one’s politics, it should be clear as day that people seem more uneasy, stressed, and in some cases just plain angry than was the case 1,…

As we draw closer to wrapping up a very trying and difficult 2020 and continue to face tremendous uncertainty around the presidential election, social unrest, job security, life, markets, etcetera, the famous quote from Charles Swindoll comes to mind: “Life is 10% what happens to you and 90% how you react to it.” It’s times like these when it’s important for us to remember this and try the best we can to live it. Part of this message refers to the importance of attitude in dealing with challenges, while the other form of “reaction” is the choices we make in…

"Buy low, sell high”.  Everyone’s heard of that one.  In fact, we’ve probably all heard it so much we no longer have to think about the math behind it, we just *know* that means you’ve made money.  There are some things you don’t even have to think about any more, you just feel them.  “Your average income tax rate is not the same as your marginal income tax rate”.  That one requires a little more thought, but yes, it makes sense; only the amount of taxable income that falls in the highest marginal bracket is taxed at that rate; the…

For years we’ve been raising the issue of the systematic increase in wealth inequality in America. Whether monetary policy from the Fed or crony capitalism in Washington, the end result has been a widening gyre between the haves and the have-nots. Although there are very specific reasons for some of the protests taking place around the country today, wealth inequality is an overarching cause of much of the angst. What’s most unfortunate about this is that we didn’t just wake up to the highest level of wealth inequality since the Great Depression this morning. It’s been bad and getting worse…

We had a piece in the September 2013 Cadence Clips called “The Cost of Panic”.  In it, we showed how investors who panicked and deviated from their investment plans when stock prices dropped from 2007 to 2009 caused irreparable harm to their wealth.  We have certainly seen a shock to global stock markets this year, with the potential for more losses to come.  As of this writing, many asset categories have bounced off their recent lows giving investors an opportunity to breathe a bit.  Many are asking themselves if now would be a good time to get more aggressive, while…

In four weeks, stock markets have given back more than three years-worth of gains. For our number-oriented readers, that equates to losses accumulating 40 times faster than gains. As the expression goes; “risk happens fast”. If the month of March has taught investors one thing, it’s that things can go from completely peachy to chaotically crappy with the blink of an eye. As we’ve been reminding our clients over the months, the ability for this to happen increases dramatically in a system that is historically overextended in debt, valuation, speculation, greed, complacency and complexity. There is no question that Covid-19…