Uncertainty over whether Congress would pass a new health-care law, coupled with the prospects of additional interest rate hikes later in the year, may have weighed on investors’ minds as stocks tumbled early last week. BWFA will look closely at… Read More
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The Markets (as of market close March 3, 2017)
Following President’s speech to Congress last Tuesday evening, stocks soared Wednesday before retreating Thursday and Friday while bond yields soared, possibly in response to Fed Chair Janet Yellen’s indication that interest rates are likely to be raised when the Committee next meets later this month. The price of… Read More
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The Markets (as of market close February 27, 2017)
Most of the benchmark indexes listed here rallied by the close of the market last Friday to finish ahead for the week. The Dow led the way by marking its 11th consecutive day of positive gains, followed by the S&P 500, which… Read More
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The Markets (as of market close February 17, 2017)
Equities closed last week in positive territory, as several of the indexes listed here posted record gains. Some positive economic news, particularly from FOMC Chair Janet Yellen, and favorable corporate earnings reports may have enticed investors to stay in the… Read More
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The Markets (as of market close February 3, 2017)
Stocks fell early last week, with the Dow dropping below 20000, while yields on long-term Treasuries receded as prices climbed with increased demand. However, news that the Fed was not raising interest rates this month, coupled with a favorable jobs… Read More
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The Markets (as of market close January 27, 2017)
The Markets (as of market close January 27, 2017) The Dow reached 20000 for the first time ever as favorable earnings reports coupled with anticipated pro-business policies apparently spurred trading, although a relatively weak GDP report at week’s end may… Read More
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The Markets (as of market close January 13, 2017)
The Markets (as of market close January 13, 2017) The past few weeks have seen the markets experience some volatility following several weeks of post-election gains. The Dow fell for the second time in the past three weeks, while the… Read More
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The Markets (as of market close December 16, 2016)
The fallout from the increase in the federal funds rate saw bond yields rise, with the yield on 10-year Treasuries hitting a 2-year high. Bond prices tend to fall (and yields rise) when interest rates increase. Lender rates from financial… Read More
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The Markets (as of market close December 9, 2016)
Following a week of tepid movement in the major stock market indexes, equities picked up the pace last week. Growth in financial company and bank stocks led the way as both the large-cap Dow and S&P 500 rose moderately. Some… Read More
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The Markets (as of market close December 2, 2016)
Robust gains that marked the last few weeks turned to modest declines last week. Gains in energy shares, following OPEC’s announcement to cap production, weren’t enough to totally offset a regression in small-cap and technology stocks. Both the Russell 2000… Read More
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The Markets (as of market close November 18, 2016)
Treasury yields continue to climb as the 10-year rate jumped 20 basis points for the week while exceeding last year’s closing yield for the first time in 2016. The dollar has been keeping pace with rising bond yields, which is… Read More
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The Markets (as of market close November 4, 2016)
Even a good jobs report wasn’t enough to steady investors last week, as stocks lost value from the prior week. Oil prices fell midweek following a report that crude oil inventories are larger than expected. While OPEC leaders agreed to… Read More
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The Markets (as of market close October 28, 2016)
As the presidential election draws near, news about the candidates may be affecting the markets. Word of an FBI investigation into more Clinton emails, coupled with some earnings reports that were weaker than expected, sent equities into the red for… Read More
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The Markets (as of market close October 21, 2016)
Last week began with a whimper as equities closed down (the Dow fell 0.3%), while the 10-year Treasuries yield dropped 4 basis points and bond prices increased. Oil (WTI) fell below $50 per barrel before rallying to around $50.50 per… Read More
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The Markets (as of market close September 30, 2016)
Last week equities started off well enough, still feeding off the Fed’s decision to leave interest rates alone for the time being. But fear of financial instability for one of the world’s largest banks may have prompted many investors to… Read More
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The Markets (as of market close September 23, 2016)
Buoyed by news from the Fed, as well as the Bank of Japan, that measures intended to stimulate the economy would continue — at least in the short term — U.S. stocks and U.S. bonds posted gains for the week…. Read More
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The Markets (as of market close September 16, 2016)
Volatility in the markets reigned last week as each of the indexes enjoyed gains early in the week, only to give most of them back by last week’s end. The Dow and S&P 500 closed last week only slightly ahead… Read More
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The Markets (as of market close September 9, 2016)
The Markets (as of market close September 9, 2016) Equities indexes rebounded early last week as lackluster economic reports in the labor and manufacturing sectors, coupled with a falling dollar, appear to be fueling speculation that the Fed won’t be… Read More
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The Markets (as of market close September 2, 2016)
Trading continues to be light heading into the Labor Day weekend. Stocks finished modestly higher for the week, buoyed by last Friday’s favorable employment report. The price of crude oil (WTI) closed at $44.36 a barrel last week, down from $47.33… Read More
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The Markets (as of market close August 26, 2016)
As the “dog days” of summer drag on, trading continues to be relatively light. Oil prices fell at the beginning of last week amid rumors that Iraq may up its oil exports, prompting stocks to retreat. While stocks rallied midweek,… Read More
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The Markets (as of market close August 19, 2016)
By the close of last Monday, the Dow, S&P 500, and NASDAQ each had reached record highs for the second time in the past week, only to retreat by Tuesday’s close. The dollar lost value against the euro, yen, and pound on… Read More
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The Markets (as of market close August 5, 2016)
As the week progressed, oil prices gained some momentum, as did U.S. stock indexes, after starting out downward early in the week. Also, on the heels of a favorable jobs report, stocks rebounded by the end of last week to… Read More
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The Markets (as of market close July 29, 2016)
GDP growth rate for the second quarter, earnings reports from some key companies, as well as the large cap market indexes all cooled off last week. The tech-based NASDAQ and the small-cap Russell 2000 each posted weekly gains, with the… Read More
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The Markets (as of market close July 22, 2016)
The S&P 500 reached a record high last Friday while other major indexes posted marginal gains over the prior week. Equities have demonstrated a positive trend over the past several weeks. The NASDAQ eclipsed its previous high only to slip… Read More
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The Markets (as of market close July 15, 2016)
Stocks continued to move up for the third week in a row as each of the indexes listed here posted significant gains by last week’s end. The Dow gained almost 370 points, and is substantially ahead of its 2015 closing… Read More
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The Markets (as of market close July 8, 2016)
Equities continue to put the upheaval caused by Brexit in the rearview mirror as several of the indexes listed here are above their 2015 closing values. Of those indexes, only the Nasdaq and Global Dow remain below their end-of-year values…. Read More
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A Week Later: The Stock Market and Brexit
Due to Great Britain’s vote to exit the European Union (Brexit), June 24 was a tumultuous day for the financial markets. In the U.S. the S&P 500 Index fell by more than 3%. Other markets around the globe fell even… Read More
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Britain’s Surprising Decision
This week many investors waited in anticipation for the outcome of yesterday’s vote in the United Kingdom. The question to be answered was “Should the United Kingdom leave the European Union?” The consensus view was that those voting “Remain” would… Read More
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The New Normal?
The Federal Reserve’s decision to leave interest rates unchanged at last week’s meeting was not surprising. It is also becoming increasingly commonplace to see the Fed ratchet down its expectations for interest rates and economic growth. There appears to be… Read More
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The Dangers of Hindsight Bias
After an event has occurred, we have a tendency to see the event as having been predictable, even if we had little or no objective means for predicting it. This concept is referred to as hindsight bias or the knew-it-all-along… Read More
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Dividends: The Power of Compounding
The income provided by dividend-paying stocks can be a critical element of long-term returns. First, dividends always represent positive returns. As dividends rise, the related investment income increases. For retirees, a strong stream of dividend payments can reduce the need… Read More
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Be Careful About Averaging Down
The concept of averaging down, or adding more shares to an existing security position when the price falls, is well known to many investors. In fact, some of history’s best investors have added considerable wealth by adding to positions that… Read More
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Shifting Winds in Retail Sales
Earnings for big-box department stores continue to decline. Since peaking at a cyclical high on April 8, 2015, large department store stocks in the S&P 500 such as Nordstrom (JWN), Macy’s (M) and Kohl’s (KSS) have each fallen more than… Read More
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Pay Attention to What Might Happen, but Be Careful About Reacting to It
In the United Kingdom, June 23 looms as being a potentially significant day. On that date, a referendum will be held to determine whether or not Britain will leave the European Union (collectively, Brexit). Should investors try to position their… Read More
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Investing and Baseball
There are numerous parallels between sports and investing. Last fall we discussed some of the similarities between football and investing. With baseball season underway, let’s take a look at some of the ways in which investing and baseball are alike…. Read More
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Reveal Your Inner Skeptic
Behavioral finance tries to address those psychological traps that are confronted while making decisions under uncertainty, such as those investors make when deciding to buy or sell securities. In the past we have talked about behavioral biases such as myopic… Read More
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On Contrarianism, Black Swans and Following the Crowd
Last Tuesday, the S&P 500 Index closed above 2100 for the first time since December; it is also currently trading within about 2% of last May’s all-time record close of 2130.82. In fact, the S&P 500 Total Return Index, which… Read More
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The Too Hard Pile
Any person who thinks investing is easy or that he is going to be able to get every stock pick or market-related forecast correct is simply fooling himself. We cannot assure investment success by buying shares of the company that… Read More
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Putting Your Retirement Needs First
The rules related to how financial professionals manage the trillions of dollars they invest on behalf of Americans saving for retirement are about to get stronger. The impetus for the pending change comes from the Securities and Exchange Commission’s Study… Read More
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Concern About Special Charges Is Growing
When companies report earnings, they typically provide investors with a series of numbers. The most basic earnings measure is accounting profit divided by shares outstanding, which is more commonly referred to as GAAP earnings or earnings under Generally Accepted Accounting… Read More
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Thinking Fast and Slow
In 2011, Daniel Kahneman, who shared the Nobel Prize in Economic Sciences in 2002, published his best-selling book, Thinking Fast and Slow. The book summarizes the decades of research he performed, often in collaboration with Amos Tversky. The broad theme of his research is that human beings… Read More
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Investment Patience is a Virtue
By: Chris Kelly, CPA, CFP®, M. Accy | Financial Advisor and Portfolio Manager Patience is defined as “the capacity to accept or tolerate delay, trouble, or suffering without getting angry or upset.” eighteenth century philosopher, Jean-Jacques Rousseau once said, “patience is bitter, but… Read More
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Target-Date Funds: A Good Choice For Retirement Accounts?
By: Joseph Caputo | Chief Information Officer & Associate Portfolio Manager Over the years, target-date mutual funds have made their way into many investors’ portfolios, particularly 401(k)s and other types of employer-sponsored retirement plans. Perhaps one reason for their popularity is that they seem… Read More
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What Happened to Capital Spending?
Although the U.S. economy has been in expansion mode for much of the last seven plus years, U.S. businesses are spending less on buildings, equipment and software than they have historically. The data tells us that companies are reducing their… Read More
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After a Lot of Angst, We Are Back to Where We Started
In 2016, the market got off to one of its worst starts in history. At its February 11th close, the S&P 500 was down about 11% from where it ended 2015; it was also more than 14% below its May… Read More
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A Bull Market Retrospective
On Monday, March 9, 2009, the S&P 500 Index closed at 676.53, representing that index’s lowest close in more than a decade. On the previous Friday, the index touched its low (666.79) in a bear market that seemed like it… Read More
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Share Buybacks: Time to Pay the Piper?
Over the past few years, many U.S. companies have borrowed heavily. However, many companies have used these funds to repurchase their shares instead of investing them to spur future growth. According to FactSet, the dollar value of share repurchases amounted… Read More
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The Millennial Generation: Experiences Versus Things
Based on our observations, what consumers want to spend their money on is changing. A conversation with most of our children typically shows that they are much more interested in experiences than in things. For many, the primary item they… Read More
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Would a Time Machine Make Investing Easier?
If you remember the movie Back to the Future II you will recall that Biff goes to the future and steals a Sports Almanac. He then returns to the past and gives it to a younger version of himself. Young Biff used… Read More
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What’s up (or Down) With Oil?
In our recent discussions related to the stock market’s somewhat tumultuous start to the year (see here, here and here) as well as our thoughts about what might happen in 2016, we have highlighted oil as one of the key… Read More
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A Look at the U.S. Economy
January was certainly a turbulent month for investors. The S&P 500 Index declined 5.1%, its worst month since August. Daily stock-trading volumes were above normal levels, as the most shares changed hands since August 2011. Of course, two weeks ago,… Read More
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Time to Take a Deep Breath?
After declining on seven of 2016’s first 12 trading days, the S&P 500 Index closed Wednesday down a little more than 9% year-to-date and almost 13% from its all-time high last May. (It was down nearly 15% from its record… Read More
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Market Bears Are out in Full Force
This is easily the worst start to a year for the stock market in history. While we said we expected the market would be more volatile this year, we certainly did not anticipate a start like this. Whether the market… Read More
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What Is the Market Telling Us?
The first week of the New Year was a rough one for investors. The S&P 500 Index closed lower on each of the year’s first five days. While the S&P 500 is still nearly 3% above its closing low of… Read More
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A Look at the Year That Was, and Thoughts About the Year Ahead
For much of the year’s first half, 2015 looked a lot like 2014, as returns were somewhat in line with long-term averages. However, as the year progressed, the S&P 500’s performance became more uneven. On August 24, the market tumbled,… Read More
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When Should Performance Be Assessed?
We hope that all of you who are reading this commentary are enjoying the holiday season and getting an opportunity to spend time with friends and family. Happy Holidays to all! As we approach year end, we are reminded that… Read More
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A Look at Director Pay, Not the Fed’s Interest-Rate Hike
As expected, last Wednesday the Federal Reserve finally raised interest rates and moved away from its seven years of zero-interest-rate policy. If you came here expecting to find our thoughts on topics such as what the rate increase means or… Read More
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Prepare for an Onslaught of News About the Fed and Interest Rates
At the risk of dulling your senses with yet another discussion of the Fed and interest rates, we thought it would be worthwhile to share a few thoughts about interest rates and the markets. Admittedly, we know that having great… Read More
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Should You Buy Stock if You Like/Love the Product?
When you find a product or service you like, love or know a lot about, should you consider investing in the company that makes the product? The short answer is that it could be a good starting point. After all,… Read More
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Digging Deeper into Share Buybacks
Companies continue to repurchase shares at a prodigious pace. According to S&P Dow Jones Indices, almost one-quarter of the S&P 500’s constituents have reduced their shares outstanding by at least 4% over the past year. Based on data provided by… Read More
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Myopic Loss Aversion
Last week was not a good one for most investors. The S&P 500 closed higher only one day during the week, Tuesday, when the index rose about three points (about 0.15%). S&P 500 Performance week of 11/9/15-11/13/15 This short-term performance… Read More
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The Knowledge Effect
The U.S. stock market’s recovery from its August 24th low has largely been driven by five of the 10 largest companies, as measured by market capitalization, listed on U.S. stock exchanges: Apple, Alphabet (Google), Microsoft, Facebook and Amazon.com[i]. As shown… Read More
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Football and Investing
There are a surprising number of parallels between investing and sports. Given that we are in the heart of football season, let’s take a look at some of the ways in which a football team and an investment portfolio are… Read More
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Investing: Patience Needed
If you are a parent, it is likely that you have told your children that “patience is a virtue.” It is quite possible that you have reminded yourself of the merits to practice the art of patience when you are… Read More
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Is the Dividend Safe?
Dividend-paying stocks are an important part of client portfolios. We prefer companies with growing dividends. When companies regularly increase their dividends, the income earned from an investment relative to the purchase price (yield on cost) will rise. For example, last… Read More
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Our Changing Oil Markets
Over the last 18 months, prices for West Texas Intermediate crude oil (WTI) have tumbled from a June 20, 2014 high of $107.26 to an August 24, 2015 low of $38.24. During this same period, prices for Brent crude (Brent)… Read More
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Teamwork: The Sport of Rowing…And Your Team At BWFA!
By: Joseph Manfredi, MBA Chief Operating Officer and Senior Portfolio Manager Here at Baltimore-Washington Financial Advisors our coordinated team approach to serving our clients, parallels the disciplined, synchronized efforts required in the sport of rowing, which happens to be my passion. The… Read More
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The Importance of Consolidating Assets
There are many reasons why investors hold assets at multiple institutions. An individual might have left a 401(k) behind after a job change, retained accounts established for various reasons at different life stages, or received a gift of stock certificates or other assets from a relative…. Read More
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The Impact of Changing Demographics On The Housing Market
By: Philip Weiss, CFA, CPA Chief Investment Analyst Recent trends typically have little impact on BWFA’s search for potential investments or our analysis of securities we already hold for our clients. We are more interested in trying to identify long-term or secular changes to the economy… Read More
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Do You Really Want To Beat The Market?
By: Joseph Caputo Chief Informa tion Officer & Associate Portfolio Manager All investors want their portfolios to do well, and of course we all would love to“beat the market.” But at what cost? How much risk are you willing to take? COMPARING APPLESTO… Read More
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BWFA Family of Clients Continues to Grow Throughout USA and Abroad
By: Rob carpenter I President & CEO “Better Solutions. Better Service. Better Results.” BWFA always strives to make client relationships both impactful and meaningful. Those relationships are usually formed by in-person meetings with BWFA’s team of advisors. Putting clients first by providing great… Read More
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Can a Single Tweet Stop an Industry in Its Tracks?
On September 21, Hillary Clinton harshly criticized Turing Pharmaceuticals about an outrageous 5,000% price hike to a drug used by HIV patients. The story’s negative backlash caused the drug maker to back down from the price increase. However, the episode… Read More
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Heightened Volatility Makes the Market a Scarier Place
Increased market volatility makes it harder for investors to stay the course. Investors have not had to fear volatility much over the past few years as the market went nearly four years between corrections (a decline of at least 10%)…. Read More
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More of the Same from the Fed
Last Thursday’s announcement that the Federal Reserve was leaving rates unchanged remains a dominant topic in the financial news. There continues to be considerable hullabaloo about if/when the Fed will eventually decide to start pushing rates higher as well as… Read More
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Should Investors Care If the Federal Reserve Raises Interest Rates?
On Wednesday and Thursday the Federal Open Market Committee (FOMC) will meet. The FOMC is the monetary policymaking body of the Federal Reserve System. There is a chance this meeting will conclude with the Federal Reserve (Fed) increasing interest rates… Read More
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Continued Market Volatility Seems Likely
Up until about two weeks ago, the S&P 500 Index had traded in a relatively narrow range for all of 2015. In fact, the first day that the S&P closed more than 4% above or below the level at which… Read More
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Thoughts about Capital Spending
Typically when the economy expands, there is a sharp upswing in corporate investment in new machines, factories and technologies. With the current expansion proceeding at a more measured pace, capital spending has not boomed. Economists and policy makers around the… Read More
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Should Investors Run for the Hills?… No
Last week’s market performance was tough on investors. On Friday, the S&P 500 stock index fell 3.2% completing the market’s worst week since 2011. That put the market roughly 7.5% below its recent peak on May 21. It was also… Read More
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The Possible Impact of China’s Currency Devaluation
Last week China decided to devalue its currency in an effort to boost its economy. We do not often write about the latest economic or market news because we find it too hard to predict with any degree of certainty what… Read More
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Do Earnings Surprises Mean Much?
In July and August of each year, most public companies report their second-quarter earnings. If you read or listen to media reports discussing the quarter’s results, you will likely find commentary discussing whether or not results exceeded analyst consensus estimates…. Read More
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Beware of the Cycle of Market Emotions
Beware of the Cycle of Market Emotions It is hard to be a successful investor. No matter how much due diligence and analysis is performed before an investment is made (and, afterwards, while the security is held) mistakes will be… Read More
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The Number of U.S. Public Companies is Shrinking
The number of publicly listed companies trading on U.S. exchanges has fallen by nearly half from its 1996 peak. In fact, since then, it has fallen in every year except 2014. In May, Craig Doidge, G. Andrew Karolyi and… Read More
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Why We Rarely Discuss What Might Be Next for the Market
How much time should investors allocate to trying to answers questions such as these? Where is the market headed? What action will the Fed take next? When will interest rates change and by how much? Will the US dollar continue… Read More
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Mergers, Buybacks and Dividends, “Oh My!”
Companies continue to allocate significant amounts of capital to share repurchases and dividends. This trend has largely been in place since 2009’s third quarter. More recently, companies have significantly ramped up merger and acquisition activity as well. Source: Standard &… Read More
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Omaha in Early May is a Must See… For Investors
BACKGROUND Fifty years ago, an investment partnership controlled by Warren Buffett acquired control of Berkshire Hathaway Inc. (BRK), a struggling textile manufacturer. Buffett has been BRK’s Chief Executive Officer since 1970. He is a legend among value investors—and for good… Read More
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Four Questions Every Do-It-Yourself Investor Should Ask
Many years ago, a potential client asked me, “Why do I need you to manage my money, when I can do it myself?” This question comes up frequently. Although I fully understand the numerous benefits of professional investment management, I… Read More
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2015 S&P 500 Performance: A Look under the Hood
Year-to-date the market, as measured by the S&P 500 Index, has been relatively calm. So far, the index has yet to fall more than 3.2% or rise more than 3.5%. In fact, this is only the fourth year – the… Read More
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Could We Invest in Tesla? Probably Not… At Least Not Today
Fundamentals-based investment research can be fun. It involves constant learning. Serious investors can gain insights into many different businesses and evaluate their potential long-term outlook. Investment research can help you understand the latest innovations in fields such as technology and… Read More