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 […]
Meme stock trading has returned in force. As discussed last week, the fear of missing out (FOMO) continues to dominate investor sentiment. The meme stock movement is again dominated by speculative retail trading driven by online forums, social media hype, and short-term momentum. Unlike GameStop and AMC in 2021, the current cycle revolves around names […]
In recent months, much debate has been about rising debt and increasing deficit levels in the U.S. For example, here is a recent headline from CNBC: The article’s author suggests that U.S. federal deficits are ballooning, with spending surging due to the combined impact of tax cuts, expansive stimulus, and entitlement expenditures. Of course, with […]
As the turn of the calendar occurred on Friday, the bull streak for the market since the April lows ended. Such was not unexpected, and the correction has been a topic of discussion in our #DailyMarketCommentary over the last two weeks. To wit: “While the overall backdrop remains bullish, including stable economic growth and earnings, […]
Over the past year, financial headlines continue to flood investors with doomsday predictions about the U.S. dollar. Whether it’s social media influencers waving “dollar collapse” charts or YouTube personalities warning about debasement, the noise has become deafening. The narrative is seductive: inflation is out of control, the government is printing money, and the dollar is […]