Considering the Alternatives

By |2017-07-17T12:22:44-04:00June 12th, 2015|Global Market Update|

What is alternative investing? Photo: Dave Meier. Source: Picography Alternative investing is investing in something other than traditional stocks, bonds, and cash. It can include real-estate, commodities, precious metals, or collectibles, like art and wine. Its appeal is their lack of correlation with the major asset classes. If these assets rise in price but zig when other things zag, they can reduce a portfolio’s risk while still contributing to its return. […]

The Tyranny of Science

By |2017-07-17T12:22:44-04:00June 11th, 2015|Global Market Update|

Is technology all that matters? Photo: Giedre Raminate. Source: Refe I’m an advocate of science and engineering. I was a science major in college. Three of my children are engineers. I have family members who design rockets and power systems. But I’m a little uncomfortable with the exclusive emphasis on science and math these days. Radio stations have special STEM reports to discuss trends in education. When a college has to shut down a department, it’s usually something like literature or Latin—rarely physics or chemistry. [...]

5-Year-Old Finance

By |2017-07-17T12:22:45-04:00June 10th, 2015|Global Market Update|

Can 5-year-olds teach us about finance? Photo: Efes Kitap. Source: Pixabay In 1972 a Stanford psychologist studied self-control in children. He put a marshmallow in front of each and said that if they could wait 15 minutes before eating it, they could have another. Of the 600 children in the study, about a third were able to wait long enough to earn the second marshmallow—sometimes by covering their eyes. In two follow-up studies, he found that the children who waited had significantly better test [...]

Global Trading Places

By |2017-07-17T12:22:45-04:00June 9th, 2015|Global Market Update|

Does increased trade cost us jobs? Photo: J Brickman. Source: MorgueFile Economists have long touted trade as a way to improve economic performance that doesn’t require new technology or skills. At least that’s how it’s supposed to work. Some economists think that if inexpensive outside labor displaces too much domestic production, the exporter does better but it hurts us too much. […]

Triple Crown Lessons

By |2017-07-17T12:22:45-04:00June 8th, 2015|Global Market Update|

Can investors learn anything from the Triple Crown? Photo: Peter Wright. Source: Pixabay American Pharoah’s win on Saturday at the Belmont Stakes makes him the first Triple Crown winner since Affirmed earned the honor in 1978, and the twelfth in history. He’s also only the fourth Crown winner in over 65 years. It’s a hard to win all three races—the Kentucky Derby, the Preakness, and the Belmont Stakes. The races are quite different—different track lengths, different field sizes. Most horses who race at Belmont [...]

Performance Anxiety

By |2017-07-17T12:22:45-04:00June 5th, 2015|Global Market Update|

How are your investments doing? Photo: Ryan McGuire. Source: Gratisography On one level, this seems like a straightforward question: divide the portfolio ending balance by its beginning balance: that’s your return. But it gets more complicated. Did you add or subtract money? What are the tax implications? How did the rest of the market do? Above all, how much risk did the portfolio experience? […]

Fear, Greed, and 100-Year Bonds

By |2017-07-17T12:22:45-04:00June 4th, 2015|Global Market Update|

Is market getting too risky? Photo: Victor Hanacek. Source: Pikjumbo Market averages are hitting records. Stocks have tripled from their lows of just six years ago. Crazy things seem to be happening: burger chain IPOs are doubling out of the gate, and Brazilian oil-producer Petrobras—of Operation Car Wash infamy—just issued a 100 year bond. Think about that: 100 years ago buggy whips were a steady business, and railroads were high-tech. 100 years from now who knows what we’ll be using to power our smart [...]

Federal Reserve Reservations

By |2017-07-17T12:22:45-04:00June 3rd, 2015|Global Market Update|

Do Fed officials make good stock market analysts? Source: Wikipedia That’s what I wondered when I read Ben Bernanke’s market musings in his latest blog. He argues that a stimulative Fed hasn’t really juiced stock prices; rather, the Fed’s actions have just returned the stock market to its pre-crisis trend. This is in contrast to current Fed Chair Janet Yellen, who noted last month that she thought valuations were quite high. […]

China Envy

By |2017-07-17T12:22:46-04:00June 2nd, 2015|Global Market Update|

Is China the future? Source: Wikipedia Wherever you look, China is in the news. Last night’s tragedy on the Yangtze River is just the latest example. But China seems to always be on the business, politics, and op-ed pages too. Concerned about pollution? China has an environmental crisis at hand. Geopolitics? China is constructing a pair of artificial islands in order to claim deep-sea mineral rights. Whether it’s green energy, infrastructure, or education, Americans are continually reminded that China is beating us at something. [...]

The Two (Investment) Cultures

By |2017-07-17T12:22:46-04:00June 1st, 2015|Global Market Update|

Can’t we all just get along? Teamsters wildcat strike, Minneapolis, 1934. Source: Wikipedia Fifty-five years ago scientist and novelist C.P. Snow gave a lecture on “The Two Cultures,” bemoaning the gap of understanding between literary intellectuals and scientists—between the humanities and science. At the time, policy-makers worried that many scientists had never read Dickens, and that the Atomic Age would establish a technocratic tyranny, a “Brave New World.” To these people Snow asked, “Can you describe the Second Law of Thermodynamics? Or what is [...]