Posts by: kcaron
A small glimmer of hope is concealed in recent data trends. Here are a few examples: The number of Covid-19 U.S. cases fell for the fourth week in a row (chart A, below), and deaths decreased for the first time last week (chart B, below). Unemployment insurance claims also fell for the fourth consecutive week (chart C, below). Domestic air traffic posted small gains last week (chart D, below) as did transit hubs (chart E, below). Credit spreads changed little for the third week in a row (chart F, below), and analysts trimmed less than $1 from S&P 500 earnings
Read More ›
Before we can hope to see a turn for the better, we must first see signs of stabilizing. For the most part, this is what we see in the most recent data. We try to discern the path to recovery in the week-to-week data: virus trends, by looking at cases and deaths across the United States; economic trends, by looking at mobility and reports of real economic activity; and market trends, by looking at the response of key financial indicators. This week’s analysis showed us that the economic hole is deep, but the rate of falloff is slowing. Slowing Spread
Read More ›
Stocks rallied last week on talk of reopening the economy and the S&P 500 is about half way back to February highs. The lockdown is helping to slow cases of coronavirus, but the economy is taking a beating as a result. Judging by recent data, the U.S. economy is likely contracting at an annualized pace in the range of -15% to -22% (chart, below). Over 10 million Americans filed for unemployment insurance in the past month. Estimates of potential job losses range from 23 million (Goldman Sachs) to 47 million (St. Louis Federal Reserve). The speed of the present downturn
Read More ›
A strong case can be made for dividend growth investing. The Case for Rising Dividends explores the rationale and evidence behind the dividend growth philosophy.
Read More ›
The 2020 coronavirus outbreak is taking a toll and investing in times of uncertainty can be challenging. Large moves in stock and bond prices have again become the rule rather than the exception. We would like to share a series of exhibits and perspective pieces that you might find helpful in navigating today’s turbulent markets.
Read More ›
Tactical asset allocation in CONQUEST portfolios is discussed in this quarterly series. In this quarterly installment, we discuss how CONQUEST is adapting to rapid changes brought about by the outbreak of Covid-19. An encouraging start to the year gave way to the unsettling reality of a global pandemic last month. In very short order, financial markets responded to extraordinary societal changes. Since February 19, global stock markets shed a record $25 trillion (30%) in a matter of days after Covid-19 became a pandemic. Bond markets and commodities also exhibited volatility and complicated movements. Not since 1987 have markets adjusted with
Read More ›
It is not too soon to start imagining a post-virus world. At some point, this will pass into the history books. For now, personal survivability is paramount until whenever that day comes. Surviving means doing everything possible to stay physically healthy. The investing analog holds as well — the key for investors now is corporate survivability. We believe now is the time to play it safe, focus on quality, and avoid buying low-quality, cheap stocks. Bad News Ahead The next phase will be full of bad news about the economy. Last week’s 3.25 million weekly unemployment insurance claims report is
Read More ›
In just a month’s time, the U.S. stock market’s value is back to where it was in late 2018. The speed and intensity of the recent decline is unusual as the United States’ equity markets lost $11 trillion (30%) in just one month. This 30% decline is also reflected in the Dow Jones Industrial Average seen below. The chart shows how this episode compares with past notable declines. In contrast to a month’s time, it took eight months for the Dow to give up 30% during the 2000-2002 market decline and fourteen months for the index to shed that amount
Read More ›
Emotions can lead to costly decisions. A recent study by Dalbar, Inc. shows that investment results are more dependent on investor behavior than on fund performance. Mutual fund investors who hold on to their investments tend to be more successful than those who try to time the market.
Read More ›
Periodic market declines are a normal part of investing, but can seem frightening when they do happen. During those times it is easy to become shortsighted which can lead to bad decision making.
Read More ›
History has shown that volatility tends to fade over time. Moreover, one of the best ways to adjust portfolio volatility is by choosing a mix of assets that best suits you.
Read More ›
During the last market downturn, an investor owning a balanced portfolio experienced a milder decline and faster recovery than an all-stock portfolio. For many, this sort of balanced approach can be an effective strategy for staying invested during rough markets.
Read More ›
The Case for Rising Dividends
A strong case can be made for dividend growth investing. The Case for Rising Dividends explores the rationale and evidence behind the dividend growth philosophy.
Read More ›