The fact that the S&P 500 index has reached all-time highs is great news.  It displays the resilience of people, companies, and markets in overcoming challenges to achieve long-term growth and prosperity.  From an investment standpoint, it can also be very emotional.  To recognize that emotion, it requires a long-term mindset which allows one to … Continued

By most measures, stocks are currently trading at or near all-time highs.  On that basis, one might conclude that stocks are at least high and perhaps too high.  This is looking at the markets in absolute terms. But what about relative value?  Are stocks high compared to the major alternative investments, cash and/or fixed income?  … Continued

Over the last several weeks there have been a number of commentaries and news items suggesting that stock picking has fallen out of favor and investors, both individual and institutional, are shifting some assets to passive investments, such as index funds and ETFs.  Some commentators have even suggested that stock pickers seek other employment. Not … Continued

The concept of sustainability, particularly with respect to natural resources, is the subject of a heightened level of interest.  Specific proposals are increasingly appearing in corporate proxies and many companies are introducing practices that are designed to protect and extend the useful life of natural resources. While environmental sustainability is garnering increased attention, investors should … Continued

There is a spirited debate within the investment community on the role that “alternative investments” should play in one’s portfolio.  In the simplest of terms, an alternative investment is an investment in an asset class other than stocks, bonds and cash.  One of the rationales used to promote these investments is that by introducing alternative … Continued

A few days ago The Wall Street Journal carried an excellent article by Mark Hulbert, basically concluding that, “trying to time the market is by and large a losing proposition, even for the pros.” Mr. Hulbert further noted that, “it is hard to decide when the market has peaked and it’s time to get out.  It … Continued

It has been said that “flying is hours and hours of sheer boredom punctuated by moments of stark panic.” The stock market would seem to have some of the same attributes.  Most of the time, the popular averages tend to drift along, generally with a moderately positive bias, and relatively modest percentage gains and losses. … Continued

Wikipedia defines credit risk as the risk that a borrower will default on any type of debt by failing to make required payments.  With the recent news regarding Argentina’s debt, this may be a good time for investors to carefully review their fixed income strategy. Two years ago, we blogged the question, “If You Borrow … Continued

Recently the Wall Street Journal[1] reported that the largest public pension fund in America, “California Public Employees Retirement System” (known as Calpers), is reducing its exposure to hedge funds by an estimated 40%. When interviewed, a spokesman indicated Calpers has decided to take a “back to basics approach” with regard to investing and portfolio construction.  … Continued

Recently, Paul Krugman, a well known Nobel Prize winning economist and a regular New York Times columnist, suggested that the wealthiest Americans wanted a depression because aggressive monetary policy has materially reduced their income from bonds and other interest-paying assets. While it is very likely that the wealthy, like the rest of us, have suffered … Continued

Investment strategies, of necessity, involve estimates and projections. First, investors, as part of constructing a portfolio strategy, should, in conjunction with their advisor(s), prepare a carefully developed projection of their financial outlook and objectives. Second, investors must recognize that investment decisions, designed to implement a portfolio strategy, rely on estimates of future corporate operating results, … Continued

I’m not sure that anyone knows the answer to this.  Every day, all day, CNBC features a wide range of market experts and pundits who, invariably, take positions that are 180 degrees divergent on each side of every issue.  At the end of the day, you will have heard from those who believe that the … Continued