Following Friday’s selloff amid the resurgence of tariff threats on China, I asked ChatGPT a simple question: ” How to Stay Calm In The Stock Market?” That simple question generated an engaging and humorous take on financial advice for navigating volatile markets. In this week’s post, I thought it would be helpful to review ChatGPT’s advice […]
When bear market losses occur, headlines talk in percentages: “The market dropped 20 %.” Investors nod. A 20 % decline sounds manageable, historical, and expected. As Ben Carlson recently penned: “Bear markets have some symmetry to them, at least in the short-term. In the long term, bull markets versus bear markets are asymmetric. Things are not balanced. Look at […]
In the world of technical analysis, there is one reliable indicator for measuring market risk. The relative strength index (RSI) measures overextension (in either direction). Developed by J. Welles Wilder in 1978, the RSI is a momentum oscillator. As such, it measures the velocity and magnitude of price changes, plotting those on a scale from 0 […]
Just recently, Scott Rubner of Citadel Securities wrote an excellent piece discussing the bull versus the bear case for the markets. You look at the markets today and see a tension between expectation and reality. On one hand, equities—especially tech and growth—are pushing to fresh highs. Optimism about rate cuts, AI and productivity gains, global […]
Diversification has been the backbone of “buy and hold” strategies for the last few decades. It was a boon to financial advisors who couldn’t actively manage portfolios, and it created a massive Exchange-Traded Funds (ETFs) industry that allowed for even further simplification of investing. The message was basic: “Buy a basket of assets, dollar cost […]
Alfonoso Peccatiello recently wrote an interesting piece on portfolio risk management, starting with a quote from Steve Cohen: ‘’I compile statistics on my traders. My best trader makes money only 63 percent of the time. Most traders make money only in the 50 to 55 percent range. That means you’re going to be wrong a […]
“Buy Every Dip” has lately been the “Siren’s Song” for this market. Such is seen in the flows into ETFs over the course of this year. Retail investors treat pullbacks as temporary noise, and their behavior borders on mechanical. Every sell-off is seen as an opportunity, not a warning. Meanwhile, institutional managers sit it out. […]
“Buy Every Dip” has lately been the “Siren’s Song” for this market. Such is seen in the flows into ETFs over the course of this year. Retail investors treat pullbacks as temporary noise, and their behavior borders on mechanical. Every sell-off is seen as an opportunity, not a warning. Meanwhile, institutional managers sit it out. […]
There is little doubt that excess bullishness has invaded the general market psyche. Just a couple of months following the market decline in March and April, where sentiment turned exceedingly bearish, the S&P 500 hovers near its highs. Furthermore, analysts are rushing to raise price targets to 7,000 or more. Nicholas Colas of DataTrek notes […]