Youth League

By |2019-08-16T06:29:00-04:00August 16th, 2019|Global Market Update|

August is when fall practice starts. Photo: Luvmybry. Source: Pixabay. I remember biking to soccer practice. The hot August days were even hotter as we warmed up, ran drills, and scrimmaged twice a day. Life was simple: the only thing I had to remember was to bring my soccer cleats and some extra water bottles. Later, I took my kids to their own soccer leagues. They had a blast, running up and down the field. The notion of passing the ball, working together, and [...]

Considering Our Options (Part 5)

By |2019-06-24T10:45:19-04:00June 28th, 2019|Global Market Update|

Can options explain strategy? Gridiron quarterback option play. Source: Wikimedia. Public Domain. Options are choices. Strategy is acting on our choices. When a company decides to lay off workers and focus on an online platform, they’re exercising a real, strategic option. When the market falls and investors exercise protective puts on S&P 500 futures, they’re exercising financial options. When professionals “dress for success” and choose between flats and heels, they’re exercising personal options. Investment strategies can be explained with options, too. Two of [...]

Considering Our Options (Part 4)

By |2019-06-24T10:44:59-04:00June 27th, 2019|Global Market Update|

Can options help us understand how investments work? Source: Sure they can. Options are choices: the right, but not the obligation, to buy or sell something. When you combine investment options with other instruments, you can see how the combination explains how another investment works. First, we need a quick course on option pricing. An option price has four major components: the stock price, the exercise price, the time left until expiration, and the underlying volatility stock. If you wanted an option [...]

Keeping Our Options Open (Part 3)

By |2019-06-24T10:45:33-04:00June 26th, 2019|Global Market Update|

Where do we find options in every life? Chrome browser settings. Source: Ctrl blog Options are choices. They represent the ability, but not the obligation, to buy or sell something. Financially, we know that options are complex instruments that have strike prices, an implied leverage and time-decay. They’re priced according to a complex formula that only folks with high-powered math or finance degrees really understand. But they show up in all kinds of unexpected places. Consider mortgages. Most people have a mortgage on [...]

Keeping Our Options Open (Part 2)

By |2019-06-24T10:44:48-04:00June 25th, 2019|Global Market Update|

Can we use options to invest? Illustration: Koltepranita. Source: Wikipedia Options are powerful. And there’s a lot to understanding them. Call options give us the right, but not the obligation, to buy something at a specific price within a certain time. They don’t cost as much as the underlying stock, but they benefit just as much when the price goes up. As a result, there’s a lot of implicit leverage in an option. An option on a $100 stock might cost you $3. [...]

Keeping Our Options Open (Part 1)

By |2019-06-21T14:08:55-04:00June 21st, 2019|Global Market Update|

What are options? Source: Pxhere. CC0 Strictly speaking, options are choices: the choice to buy, sell, or hold; the choice own or rent a home; the choice of what to plant in the garden. Having options means we have the ability to make – or not make – choices about our lives. Financially, though, options have a very specific meaning. An option on a stock or bond is the right, but not the obligation, to buy or sell the security at a specified price [...]

On the Water

By |2018-11-13T07:41:29-04:00November 13th, 2018|Global Market Update|

Have you ever been on a canoe trip? Photo: Olivier Labbe. Source: Pixabay The experience is singular. Each day is unique, but along the way they merge into one another. You lose our modern sense of time and develop a daily rhythm: dawn, morning fog, daylight, evening. Sometimes the scenery opens up, and you get views of the hills and landmarks around, but more often your vision is confined by the banks and the shore. You get to know your paddling partner’s habits and [...]

Weathering the Market

By |2018-08-08T06:57:19-04:00August 8th, 2018|Global Market Update|

Why should the market listen to economic forecasts? Broad Street in Manhattan. Source: Wikimedia The short answer is, to make predicting the weather look easy. But seriously, the market depends on earnings, earnings depend on revenues, and revenues depend on the economy. All else being equal, a strong economy should lead to strong earnings and a strong equity market, which feeds back to the economy. But all else is never equal. Good economic news can become bad market news when filtered through the Fed. [...]

Warmer Weather Ahead?

By |2017-07-17T12:21:34-04:00December 20th, 2016|Global Market Update|

Warmer Weather Ahead? What’s the forecast? Source: NOAA The short answer is, no one really knows. There were very few prognosticators that predicted a Trump victory, and even fewer who thought a sweep by the Republicans would lead to a major stock market rally and bond market selloff. But that’s where we find ourselves. Stocks are up in the US in the low teens—almost 10% more than most folks expected a year ago. Interest rates are up modestly. A year ago, many thought the [...]

Chinese Fortunes

By |2017-07-17T12:21:41-04:00September 30th, 2016|Global Market Update|

What’s happening in China? Forbidden City in Beijing. Photo: Saad Aktar. Source: Wikimedia Anyone who wants to understand the global economy needs to have a sense of what’s happening in China. China has the second largest economy in the world--almost 2/3rds the size of the US. Last year they grew more than the US and Europe combined. They’re essentially tied with Canada as our largest merchandise trading partner, providing 15% of our imports and exports--$300 billion worth. So what happens in China affects the [...]