Will Robots Eat Our Jobs?

By | 2017-07-17T12:21:29+00:00 February 9th, 2017|Global Market Update|

“I’m sorry Dave. I’m afraid I can’t do that.” HAL 9000 Interface. Illustration Grafiker61. Source: Wikipedia That’s what the HAL 9000 computer says to Dr. David Bowman when he tells HAL to “Open the pod-bay door.” HAL had gone rogue and Bowman was in an EVA pod outside the spacecraft. And that’s what a lot of people are worried about in our current robotic revolution. Robots have replaced workers in a whole host of industries, especially in manufacturing. Look at the way factories are [...]

Growing Up

By | 2017-07-17T12:21:29+00:00 February 8th, 2017|Global Market Update|

Is growth inevitable? Photo: Skeeze. Source: Pixabay There’s a common assumption about investing that growth just happens. All you have to do is put your money to work for a long enough time it will ultimately lift off – like a seedling planted in the ground. The combination of competition, commerce, and the free movement of capital is like sunshine, soil, and water. Eventually, a tiny seedling sprouts and grows into a giant redwood. But markets aren’t magic. There’s no physical force of nature [...]

Dividend Aristocracy?

By | 2017-07-17T12:21:29+00:00 February 7th, 2017|Global Market Update|

They were the best of yields, they were the worst of yields … French Aristocracy. Remember what happened to them? Public Domain. Source: Wikipedia In an environment where short-term interest rates are barely moving up and bonds are exposed to rising inflation, many investors have turned to dividend-paying stocks to provide income for their portfolios. Many blue-chip companies yield more than 3%. How risky can such a strategy be? There’s a lot to like about dividends. They are the most transparent part of a [...]

Random Walks?

By | 2017-07-17T12:21:29+00:00 February 6th, 2017|Global Market Update|

How can we find the truth behind a set of numbers? Photo: Jade. Source: Morguefile If you follow the wanderings of a drunk college student and the student’s puppy, they both seem to follow a random walk. The student stumbles about, while the puppy follows every new scent that crosses its nose. But there’s something interesting about them: they never get very far from one another. Periodically, the drunk calls the dog’s name, thinking, “I can’t let him get too far off.” And the [...]

Super Returns?

By | 2017-07-17T12:21:29+00:00 February 3rd, 2017|Global Market Update|

Is it time to break out the Super Bowl Indicator with the chips and wings? Photo: Keith J. Source: Pixabay The Super Bowl indicator is my favorite example of a spurious correlation. It comes from the early history of the Super Bowl. It was discovered by a sportswriter in the ‘70s, who noted that when an NFC team won the Super Bowl, stocks went up that year. When the AFC team won, we had a bear market. The indicator seemed to work out pretty [...]

The Missing Asset (Part 2)

By | 2017-07-17T12:21:29+00:00 February 2nd, 2017|Global Market Update|

Is this a good time to add real estate to a portfolio? Image: Photoeverywhere.co.uk Real estate is a cyclical asset. When times are good, everyone is expanding. They want to be a part of the boom. When times are bad, it’s impossible to even think about positive returns, much less growth. And, of course, your perspective is always affected by your personal experience. While real estate is a global asset class, all real estate is local. Real estate comes in four major flavors: residential, [...]

The Hidden Asset

By | 2017-07-17T12:21:30+00:00 February 1st, 2017|Global Market Update|

What’s the asset that no one talks about? Photo: Bryan Hanson. Source: Morguefile When I discuss asset allocation, I usually focus on stocks and bonds. Bonds are a senior claim on a business’s cash flow, and stocks are a residual claim on cash flow. So stocks benefit from a business’s growth, but they’re riskier – they get wiped out if the business fails. Bonds are safer, but they don’t go anywhere. If everything goes right, you just get back what you put in, with [...]