Challenging Bias The past decade has not been particularly kind to diversifiers; a handful of large U.S. growth stocks generally outperformed international stocks, smaller companies and Value-oriented investments. As the gap widened, diversification may have looked less like prudent risk management and more like an unnecessary constraint. But recent strength across formerly lagging market segments […]
When you invest in a specific stock, sector, theme (or meme), you’re basically saying you think it’s a better bet than all the other options out there. That is, any choice to invest in one thing is at the same time a choice not to invest in all other things. How sure can you be […]
Global equity markets have seen increased volatility as the war in Iran has prompted regional contagion. A consequent surge in oil prices has lifted concerns that cost-of-energy flow-through will lift going-forward inflation; the rise in interest rates that has come as a result has pressured bond markets. But the Iran war is only the latest […]
This month, I push back against the extremes.
Podcast: Play in new window
We’ve written often of our preference for “factor” investing in equities, an approach that leads us to variously “tilt” portfolios toward characteristics that reflect observable “risk premia” in that they can be seen to have led to outperformance over time. There’s no guarantee that outperformance will come, though; there’s a risk that the premium won’t […]
Regularly investing over time may allow one to take advantage of market volatility, rather than simply suffer it. As stocks bounce up and down, investors may find that market drawdowns present opportunities to invest at lower prices. Perhaps easy to default, then, to a dollar cost averaging plan (DCAP)—the practice of investing a particular sum […]
Seems not since the Tech Bubble of 2000-01 have we experienced such a rapid shift from “meaningful advance in technology” to rampant hype bordering on hysteria. Now ubiquitous, “AI” dominates the empty boilerplate phraseology of executives and pundits—however hollowly—seeking to convey techno-sophistication and endless promise. Finding the memetic expansion unprecedented and becoming ever more lacking […]
Responding to a reporter’s question regarding the Federal Reserve’s going-forward efforts to balance the risk of weaker employment against that of growing inflation, Chairman Powell stated, “We have a situation where we have two-sided risk, and that means there’s no risk-free path.” That two-sided risk scenario always exists, of course, but managing against both of […]
In this podcast I speak to concerns regarding the AI land grab.
Podcast: Play in new window
By the end of trading, though, most of the about-face had been regained. The gain/news/plunge/rebound cycle exemplifies how fickle the stock market can be. Similarly, zoom out to the beginning of the year and we see that U.S. stocks have fully rebounded from a near 20% decline from a prior peak that arguably came primarily […]
