A couple of weeks ago, Apple “lost” $179 Billion in market cap in a single day. It has gone on to lose over $500 billion in market cap over the past few weeks. As I write this, Apple is valued at about $1.9 Trillion. I have heard people asking the question, “Should I just own tech since that is so obviously the future?” At the very least, more people are talking about increasing their allocation to tech investments as if…
*There is a book being released on November 17, 2020 that I believe will be one of the best finance books of the year. The book is titled: “How I Invest My Money: Finance Experts Reveal How They Save, Spend and Invest.” It was brilliantly put together by Joshua Brown and Brian Portnoy and each contribution includes a beautiful illustration from Carl Richards. I am thankful I was asked to contribute and I thought the best way to introduce the…
It is safe to say that politics are a touchy subject. It’s made even more touchy by the extremists on both sides who think that anyone taking an opposing view are beyond incompetent. These people color the waters of the more moderate (and level-headed) middle. Politics are personal though. What I have observed over the past four election cycles is the intersection of politics and investing. It’s what I want to address briefly here since it is invariably going to…
The predictions for dividend cuts sounded dire for quite some time. Many were predicting cuts of between 20%-30% here in the U.S. The jury is still out for now, but it doesn’t seem as likely based on what the data has shown thus far from Janus Henderson in their Global Dividend Index report. Here is their record of dividend cuts with regard to global dividends: Global dividends fell $108.1bn to $382.2bn in the second quarter. The headline 22.0% decline (19.3%…
In Howard Marks latest memo, Time for Thinking, he makes the following observation: Lower interest rates increase the discounted present value of future cash flows and reduce the a priori return demanded from every investment. In layman’s terms, when the fed funds rate is zero, 6% bonds look like a giveaway, so buyers bid them up until they yield less (thus I believe 97% of outstanding bonds yield less than 5% today, and 80% yield less than 1%). (emphasis mine)…
NOTE: I originally published this post just before the COVID market decline on 19 February. As markets have returned to near-record levels, I wanted to bring the post back to the top of the feed because if you felt yourself rethinking your investment strategy through the COVID decline, I think this article might help you in preparing for whatever might come next. Investors love to talk about risk. What’s the downside risk? How can you hedge your risk? How can…
Recently, I have written quite a bit about the long-term return expectations for investing in bonds. See here, here, here and here. Spoiler alert: I don’t think it’s good. But long-term bonds this year have been quite an amazing story as the COVID pandemic has caused the Fed to take historically monumental actions. As a result, we’ve watched long-term Treasuries tear the roof off the market. For instance, a 20+ Year Treasury Bond ETF (name withheld for compliance purposes) is…
The phrase “double-dip recession” is one I am hearing a lot recently given the economic data coming out detailing the impact of COVID on 2Q 2020. To me, this rings similar to the double-dip recession calls from 2011. For curiosity sake, I rang up the Google machine to go back in time nine years and came across the article below from the International Business Times: Global Recession 2011: It’s Real, and It’s Going to Hurt Within this article are a…
In the “Ends-of-the-World Every Year Since 1970” post, we focused on some of the most harrowing events over the last 50 years. Now, we get to explore the positive events since 1970. But before we do, it’s important to state the obvious here, and that is that the mainstream media isn’t interested in providing good news to you. Yet, it is these events that will likely have far more impact on our lives over the coming decades than the negative…