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Posts Tagged ‘S&P’

Where Do We Go From Here?

I’ve had a relatively low position in stocks for clients for quite some time, but I’ve decided to lower it even further. I’m quite concerned about the correlation between Europe and the US, emotion/news driven volatility, and the uncertainty about what the Fed will do.

The risk just doesn’t warrant having as high a percentage as I’ve had.

On the flip side, profitability, efficiency, and cash balances have all been rising in the firms that comprise the S&P 500.

Is the return worth the risk?

Click on video to hear more.

TRANSCRIPT… Read More

Correlation as Long-Term Pandemic

Statistically speaking, when 2 or more things move together (both zig at the same time instead of some of them zagging) it’s called a correlation of 1.0. Over the past 30 years the correlation of the global markets have continued to increase towards 1.

This means that it’s a high probability that as Europe falls, it will impact our US markets. How much is the question, but our fates seem to be intertwined.

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Special Update – Tuesday Evening

Here are my current thoughts after 2 volatile days

TRANSCRIPT:

Hi there, Mike Brady with Generosity Wealth Management, I am recording this on a Tuesday afternoon, kind of late Tuesday afternoon. I promised that I would communicate as much as possible to share with you some of my thoughts and that’s the purpose for this video.

Yesterday’s video was about 13 ½ minutes, and I definitely am going to make today’s much shorter and pithier, I think, as much as I can.

Monday was a very bad day and we can’t isolate that day… Read More

Should you Freak Out? – Part 2

Part 1 was 1.5 weeks ago. This is part 2, updated as of Monday morning.

It’s a particularly long video, but filled with my current thoughts

* What does the S&P downgrade mean?

* What should you have and not have in your portfolio?

* Should you move everything to cash?

* Is this emotional selling or fundamental?

I’m going to have 2 or 3 videos this week since so much is going on. One of the aspects of my job, in my opinion, is to over communicate with you as the adviser/client… Read More

Who Has AAA Rating?

Now that the US has lost it’s AAA rating, who’s left?

20 countries with AAA Rating – Link

America Can Not Go the Way of Greece

As I mention in my video above, Greece is a fascinating story unfolding. I wish it was only Greece, but we have a few other countries in Europe that will be following it in the headlines over the coming year.

This is a good article on a few dissimilaries between Greece and the United States.

Why do you care?

When you’re at a summer BBQ, some know-it-all guy is going to start getting all apocalyptic on the US. You need the ammo to refute that… Read More

Equity Markets and Gold

The stock markets have been making some headlines recently. Last Friday, the DOW declined below 12,000.

Should you freak out? Is this the beginning of the end?

I also address whether I feel the gold rally will continue. Does it make sense to be a part of your portfolio?

TRANSCRIPT:

Hi Clients and Friends, Mike Brady here.

Just a quick video just to let you know what I’m thinking about this week. And this week I’m thinking about, sort of, the news headlines about the kind of, the steady erosion in the Dow… Read More

Understanding Risk Management

John Paulson, a smart, rich, and successful hedge fund manager, has some pretty good words about “Risk” in a paper he recently published.

Put simply, you have to understand what the Risk is before you come up with bumper sticker phases like “if you watch the downside the upside takes care of itself”.

Interesting article…..

LINK TO FULL ARTICLE

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Internet Bubble Again?

Facebook $75 Billion? Groupon at $25 billion? Twitter at $10 billion?

Come on…..we’ve seen this before. It’s called the late 1990s. I don’t like it and am avoiding it like the plague.

Click on the link below for a more detailed article.

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Corporate Cash

There is a significant amount of money being held by corporations at the moment.

$1.9 trillion. 7% of their cash. That’s the highest level since 1963.

This is rational (from their point of view) due to the uncertainty in the world, including mixed signals from Washington.

But as they reinvest in technology, efficiency, and new products, this bodes well for the longer term value of their firms, and ultimately our investment markets.

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S&P Downgrades Japan from AA to AA-

Japan has been in a continued recession for the past 20 years.

The deficit levels of the Japan government are among the highest of the developed countries, and expected to increase in the coming years.

This is not good news for Japan. As the rating decreases, the extra premium paid to borrow money goes up. So, a 3% cost of borrow might increase to 4%.

Anyway, this is something to watch as the United States deficit to GDP is increasing rapidly.

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VIX Correlation

There are many indicators out there for helping to inform which way the markets are headed. None of them are perfect, or exact, or even able to be taken into account alone and without context.

This week I discuss the CBOE Volatility Index (VIX) and how it’s negatively correlated with the equity markets.

The fact that it’s at extremely low levels right now makes me concerned.

Take 2.5 minutes to watch/listen to my video

TRANSCRIPT:

This week I’m thinking about volatility index. I mentioned two or three weeks ago on my annual preview… Read More

Lessons from The Big Short

Every wondered what the 2008 Financial Crisis was all about? The Big Short by Michael Lewis is a good, gripping book that explains much of it. I highly recommend it.

But what are some of the lessons we can take from this crisis as outlined in the book?

That’s what this week’s video is about.

Take 4 minutes to watch/listen to it.

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You Want to be Bullish?

If you’re looking for a reason to be bullish, this chart says it all. After a period of inflation (taking place over multiple years), there is a huge cyclical bull market.

The actions the Fed are taking today are inflationary, pure and simple. This bodes well for the future.

CLICK FOR FULL ARTICLE – YOU WANT TO BE BULLISH?

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2010 Review / 2011 Preview

This week is my annual 2010 review and 2011 preview.

I start out by talking about what I got right and wrong from my 2010 preview 12 months ago (you mean I’m accountable?)

I then talk about reasons to be bullish countered by reasons to be bearish on 2011.

I conclude my video with specific actions I’m taking with my clients. This includes

* What I’m doing with my bond exposure

* How I’m allocating amongst large cap, mid cap, and small cap

* What I’m watching as an indicator of market health… Read More

Year End Market Review

Nasdaq + 16.9%

S&P 500 +15.06%

DJIA + 11.0%

First 4 months were up and down but the trend was generally up, followed by a horrible May and June, July and August up and down , with the last 4 months of the year making it a nice year end.

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See my video in the next post for more information.

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Is This Your Average Secular Bear?

In my blog I like to present both sides of the argument and then give you which side is more persuasive to me.

This article states what I feel, which is that we’re in a long term bear market, but we’ll have years that are good (like 2009 and 2010).

Secular bears end when the excesses that caused the prior bull are extinguished.

I’m not convinced we’ve addressed the excesses yet.

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Partial 2010 Recap

I just said I’d recap next week, but in the meantime I like this chart. It’s just fun, and well, it’s my blog

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Be Scared When No One Else is

The VIX (Volatility Index) is very low right now (17) and many times a huge sell off takes place once people become complacent.

Don’t be that person.

I continue to use the VIX as just one of many indicators to upcoming trends and sentiment in the market.

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What is your Interest Rate Sensitivity?

What is your interest rate sensitivity? If you reply “what does that mean”, then you definitely need to listen to my video below.

I talk about a quick and dirty way to estimate how a Rising Interest Rate will negatively effect your particular bonds and/or bond funds… Read More