As volatility has increased in the past 3 weeks, I want to keep you well informed of my thoughts. Are the past weeks normal, have the fundamentals changed, or is this the canary in the coal mine we’ve been waiting for? These questions are answered in my video. Hi, Mike Brady here with Generosity Wealth Management, a comprehensive, full service wealth management firm, headquartered right here in Boulder, Colorado. I last spoke to you a couple of weeks ago and at that time, I talked about the third quarter. I said it’s been a tough quarter, very volatile and it ... Read More
The magnitude of loss greater than 20% or 30% is actually quite unusual, but 10% happens often, even if it hasn’t happened since 2011. When it happens it doesn’t feel very good, but it’s not necessarily a prelude to bigger declines, so we shouldn’t jump to that conclusion. Here’s a full article with more discussion about the odds. What Are the Odds We’re Heading for Another Crash Read More
The deficit is the difference between tax receipts (inputs) and tax expenditures (outputs). The deficit has been declining over the past few years, but it’s not due to decreased expenditures, it’s due to increased revenues. The private sector has been healing itself over the past 5 years, and it shows with the tax revenue. Full Article Read More
The 3rd Quarter was schizophrenic, with most of the unmanaged US and international stock indexes negative, bonds (in general) slightly positive, and with tons of volatility across the board. Particularly in the past few weeks, every day there seems to be triple digit swings in the Dow, and lots of negative news (ISIS, Ebola, etc.). Now is the time when we have to remember the big picture and what we as investors are striving towards. It is the time when emotions can be high, but we need to keep a steady hand and focus. Now is when we reaffirm what ... Read More
Tensions with Russia, slowing global growth and falling consumer confidence mean the region’s biggest economy struggled to grow in the past 3 months, and may turn out to have shrunk for a 2nd quarter running. Across the Eurozone as a whole, recently released data showed that economic sentiment dipped in September for a 4th month in a row. Questions abound about whether this could lead into a vicious circle of falling prices and stagnation. I’ll continue to watch this closely and make some macro recommendations for my clients as this continues to unfold. Risk of Third German Recession Pressures Europe ... Read More
I love the below article, and recommend you read it. Essentially it talks about the limits of complexity, and how exotic devices can create exotic problems. The reason this is relevant is the applicability of this principal to finance. Any financial model is only as good as the person or team using it Complex strategies can create unforeseen complications Some problems have no solution, so you have to choose which form of risk you want to deal with, risk now or risk in the future. etc. Really good article and I agree with all his points. When Exotic Devices Create ... Read More
Pimco is a mutual and ETF firm with a huge bond fund that has been the player in that space for the past 40 years. Bill Gross founded the firm in 1971, and it is now around $2 trillion dollars under management. Last week Bill Gross decided to leave the fund and move to Janus. This is important because of the disruption to the bond market as huge sums could (and I say could) move from one firm to another. The bond market doesn’t get as much coverage as the stock markets, but this is a pretty big change, equal ... Read More
I don’t know about you, but growing up I loved my Saturday morning cartoons. My favorite was Superfriends (by far), but I loved Scooby-do and other shows too. Sadly, an era has come to an end. You’ll be glad to know it ended for me 30 or 35 years ago anyway, but for kids today they no longer have a sustained time frame to veg-out in front of the TV. Sadly, they can do that vegging 24/7 with all the options to watch. The CW was the final broadcast network to program a Saturday morning block, and it aired for ... Read More
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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.
The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market.
The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends.
Indexes are often used as a proxy for the stock market and cannot be invested in directly.