Posts by: kcaron
We sought to look back at twenty years data for the S&P 500 to study the source of return by company risk category. As the graph and tables that follow show, the results were eye opening.
Senior Portfolio manager, Kevin Caron, makes the case for investing in quality.
Dividend investing allows investors to focus on fundamentals rather than becoming distracted by the stock market’s constantly changing mood. This premise has been repeated decade after decade by some of the greatest market scholars who ever lived. This perspective lies at the heart of what we do at Washington Crossing Advisors (WCA). The WCA Rising Dividend portfolio strategy centers on dividend increases from solid, high-quality companies at reasonable prices. Consistent dividend payments from fundamentally strong companies (low debt, profitable assets, consistent business) allow us to look through short-term market noise and stay focused on the long-term prospects of a business….
Investing is about understanding risk. If you don’t understand risk, you don’t understand investing. And yet, for decades, the industry has relied on flawed tools — outdated beta models and rigid sector classifications — to measure it. Some managers, particularly those obsessed with tracking benchmarks, force their portfolios into pre-defined sector categories designed decades ago, long before modern data and real-world market behavior could be fully understood. They do this because they are fearful of performing too differently from pre-defined, legacy benchmarks that were never constructed with investors’ interest or risk in mind. These legacy benchmarks and sector classifications, assigned…
WCA Co-Chief Investment Officer and Senior Portfolio Manager discuss why S&P 500 is beating the average stock return this year and how the divergence could create risk in the index. The outlook for the economy, inflation, and interest rates is also discussed.
The International Monetary Fund delivered a sobering assessment of growth in their latest outlook. High inflation, war in Ukraine, and lingering supply issues are culprits. While credit spreads and earnings forecasts appear reasonably steady, our own assessment of data points to slowdown. As we look for signs of a turn, the weight of evidence points to some continued caution for now.
Last week, the European Central Bank (ECB) raised a red flag, saying some member banks have ignored warnings of risks associated with leveraged finance, according to Bloomberg News. The ECB hit a handful of European banks with capital charges in an attempt to encourage the banks to exercise greater caution. These actions come amid growing concern in Europe over a looming energy crisis, ongoing war in Ukraine, and struggles at some financial institutions. These pressures are evident in both confidence indicators like business confidence (graph A, below) and measures of financial stress (graph B, below). Graph A Graph B Rise…
We critique existing “style” investing frameworks as popularized in various “value” and “growth” indices. We cite three critical problems with how the indices are constructed, and discuss risks that come with overly strict adherence thereupon. Lastly, we offer an alternative framework as a potentially better way to think about investments.
The economy is either in recession or booming. This is what the headlines are telling us each week. So, against this muddled stream of seemingly conflicting and contradictory information, we look for signs regarding which way we are headed. Consider the following evidence for the “recession” case and the “boom” case.
Quarterly Report
Principles
Dividend Investing
