Notes

The fourth quarter of 2018 proved to be one of the roughest on record for stock market investors with the S&P 500 Index falling 14%.  Market participants are expressing worry about the current economic outlook by selling shares indiscriminately.  Here is a brief list of the sources of investor angst:

Some commentators, including the one currently residing in the White House, complain that the U.S. Federal Reserve Board has gone too far in its quest to normalize our country’s interest rate regime.

A few months ago most financial commentators were in agreement that the global economy had entered a phase of synchronized global expansion.  It is true, by means of international trade and cooperation, the world economy has been operating pretty close to the way economic theorists have mapped it out for generations.  The theory is if each country trades what it has in abundance in re

After consistently posting positive returns over nine quarters, the U.S.

New Year Rundown

This past year was another barn-burner for stock markets around the world.  Of all the major international indexes, every one ended the year in positive territory.  The best performer was the Argentine Mervel Index which increased 78% for the year, while the Russian RTS Index brought up the rear with a positive return of 0.2%.

U.S. stocks have performed well recently because global economic fundamentals are sound and corporate earnings are strong and potentially getting stronger.  But what is the market going to do from here?  Will it go higher?  Is the market overvalued?

The first two quarters of 2017 proved to be profitable ones for investors. Over that period, the S&P 500 stock index appreciated 8.2% before dividends. The best performing sectors of the S&P 500 were its two largest: information technology and healthcare. Combined those sectors account for approximately 37% of the index.

In the investment world, it is an accepted principle that there is a direct relationship between risk and reward. Generally, stocks of safe, slow-growing companies sell at lower valuations than risky, fast-growing ones.

The fourth quarter of 2016 proved to be an eventful one for America. In November, a large portion of the populace decided it was time for regime change in Washington. Fair enough. However, many questions remain about what kind of government we are going to get and how exactly its policies will affect the U.S. economy and, by extension, the financial markets.

That is the term used by professors of finance to describe “an event outside the economic system that affects its course.”  Just last week, we experienced one.