Foggy Prospects

By |2019-09-11T06:30:13-04:00September 11th, 2019|Global Market Update|

We had some pretty thick ground-fog the other day. Photo: StockSnap. Source: Pixabay. License. We didn’t have fog very often where I grew up in Minnesota. The prairie is flat and clear, and the temperatures evenly distributed. But in northern New England, the mountains cool much faster than the surrounding land. The heavier cold air flows downhill into the valleys, where the atmosphere is thick with moisture. The cold, dry air forces the water vapor to condense, and a thick fog forms. It’s interesting [...]

The Return of Risk

By |2019-08-06T06:26:40-04:00August 6th, 2019|Global Market Update|

Why are the markets so volatile? Photo: Phoebe Tengdin. Used by permission. Happy markets are all alike. Each unhappy market is unhappy in its own way. It started with a dispute between the Fed and the Administration. Like every first-term president since Harry Truman, Donald Trump wants lower interest rates. And he wants them now. Lower interest rates will improve the short term performance of the economy and help his chances for reelection. The Fed has its own institutional priorities. They want to maintain [...]

Dreamland

By |2019-07-05T05:59:48-04:00July 5th, 2019|Global Market Update|

Are market changes real changes? Dreams of World War 1 soldiers, by Jan Styka. Source: Lublin Museum There’s a common understanding that market gains or losses aren’t real gains or losses—they’re only “on paper” until the investor sells the stock, making them “real.” But that’s a cognitive error—a kind of egocentric bias that says that something is only real if it affects me. In fact, price changes are real changes. When Apple goes from $100 to $200 per share, that gain is real. And [...]

Shaky Legs

By |2019-06-12T22:54:12-04:00June 12th, 2019|Global Market Update|

This is the time of year the baby fawns start come out. Photo: Bryan Hanson. Source: Morguefile. Fawns are adorable. They gambol and play and remind us of the cycle of life. But they’re shaky on their new feet. Like everything that starts fresh, the first few steps can be unsteady. In this, they’re a lot like small companies. Small stocks are a lot more volatile than big stocks. They can jump or drop by up to 20% in a day and no one [...]

Don’t Do Stupid Stuff

By |2019-01-06T22:12:32-04:00January 6th, 2019|Global Market Update|

How do we avoid doing stupid things? Tourist taking selfie near riot. Photo: Matthew Roth. Source: Flikr. CC-BY-2.0 We’ve all done them: rushed off to the airport and forgot our driver’s license. Gotten off a train or plane and left a critical item behind: a wallet, a cellphone, the car keys. We take a wrong turn on the way home – a route we’ve driven hundreds of times – and suddenly we’re in a bad neighborhood, or we’re going the wrong way on the [...]

Winter Storm Watch

By |2018-12-07T14:30:03-04:00December 7th, 2018|Global Market Update|

Are we ready for this? Early winter storm. Public Domain. Source: Max Pixel November this year was the coldest and snowiest ever in the Northeast. In general, we try to prepare for winter early, cleaning the yard, raking leaves, splitting and stacking wood. But these early storms caught us a little off guard. In particular, I hadn’t changed to snow tires. Usually, putting them on by Thanksgiving and taking them off after tax day is good enough. But not this time. Apparently, we weren’t [...]

Avoiding a Crash

By |2018-11-26T07:54:53-04:00November 26th, 2018|Global Market Update|

Did everyone get home safely? Photo: John Mosesso, NBII. Source: Wikimedia The Sunday after Thanksgiving weekend is one of the busiest travel days of the year. It’s estimated that over 4 million people flew home on Sunday, with almost 50 million taking to the roads. I drove into Boston’s Logan Airport early Sunday morning, and the traffic at 5:30 am was something to see – cars honking and cutting each other off, security officers yelling and waving frantically, folks scrambling to get themselves and [...]

Of Chaos and Control

By |2018-04-05T07:10:45-04:00April 5th, 2018|Global Market Update|

How do you deal with chaos in the market? Photo: Raj Vitthalpura. Source: Free Range Stock Photos It’s easy to freak out when you see how volatile the market has been, lately. One day the market is down 3%, the next it’s up. Yesterday the Dow was down over 500 points in the morning. Traders were freaking out over the prospects of a trade war. By the afternoon, folks had calmed down and the average was up a couple hundred points. How do you [...]

Fed Obsessions

By |2018-03-09T07:14:23-04:00March 9th, 2018|Global Market Update|

What effect does the Fed have? Poster from 1880s. Source: Wikimedia For years we’ve obsessed about the Federal Reserve. Whether we picture the Chair as a heroic figure fighting off the forces of darkness and doom, or see the Fed as the center of a global conspiracy to enact vicious cycles of ruin, or view Fed staff and officers as primarily technocrats overseeing the country’s banking and monetary system, the Fed is at the center of a lot of our thinking. And a lot [...]

Risk, Uncertainty, and Balance

By |2018-03-02T07:31:03-04:00March 2nd, 2018|Global Market Update|

The Era of Low Volatility is Over. Photo: NOAA. Source: Wikimedia That’s what I thought when I looked at last month’s returns. Equity markets around the world were down around 5% last month, led by economic stalwarts like Johnson & Johnson and Samsung Electronics. Growth-oriented companies, like Amazon and Microsoft, still keep chugging along. But the market’s unbroken string of monthly advances – with barely a pause to admire the scenery – ended in February. A series of scary stories has spooked market participants. [...]