Alone with My Thoughts – 10/10/25
There are two epic and related battles beginning to shape up as we go head first into the final quarter of 2025. First, the corporate bond market is on a tear, with record setting new issues at the most narrow credit spreads since 1998 according to the Wall Street Journal. This would make investors think that the economy is strong and the chance of default is low. On the other side, economists and politicians are clamoring for lower bond yields because the economy is weak based on much slower job and wage growth. This leads us to the other battle, significant slowing job growth representing a weak economy versus an AI driven new gold rush to higher productivity indicating a strong economy that just needs fewer jobs. There it is, the yin versus the yang, which could ultimately work out to higher inflation, lower job growth, higher productivity, and lower interest rates and hopefully bullish stock prices.
Alone with My Thoughts – 7/22/25
A quick public service announcement, Wall Street can resemble a factory, churning out shiny new products as fast as retail investors can buy them. These products can carry higher fees, more complexity, and liquidity issues. The White House is now in the process of allowing private equity to be invested within 401k plans. Private equity can carry higher fees, be very complex, less transparent in pricing, and illiquid. 401k plans have been arguably quite successful, now managing almost $9 trillion dollars. They are typically low cost, very liquid, and offer different levels of complexity, all with price transparency. Squirrel! Squirrel! Buyers beware.
Alone with My Thoughts – 5/2/25
If March has lions and lambs, then April 2025 had its own bulls and bears. A falling market picked up momentum on April 2nd, and hit new recent lows the following week, only to now have rallied about 14% from the bottom, with the Nasdaq actually positive for the month. Investors were again rewarded (or not punished) for maintaining a long-term view and for being diversified. In the coming months, Wall Street will obviously be paying close attention to tariff news. With oil prices in the mid to high $50’s per barrel, the ten-year bond at 4.1%, and the looming possibility of permanent tax cuts, what would happen if a trade deal is announced with someone like India? Stay tuned…
Alone with My Thoughts – 3/20/25
The first quarter of 2025 has been marked by volatility and turbulence as Wall Street comes to grips with wide ranging new government mandates. From tariffs and cost cutting, to interest rates and inflation, there is plenty of headline risk to go around. Take a moment, go to a Zen like place, and remember that the markets have been on a tear, what with two years in a row of 20% up moves for the S&P 500 and high valuations. Interest rate cuts have been paused and March can be a historically rough month for stocks all the while we haven’t had a 10% drop since the summer of 2023. The turbulence should be kind of expected then and a well-diversified portfolio with some exposure to fixed income, is probably faring better than the media talking heads would have you believe.
Alone with My Thoughts – 2/06/25
According to a recent research report from JPMorgan, the largest tech companies, aptly named the “magnificent seven” now make up 32% of the S&P 500 and another 19% of the index are technology companies in general. That means that more than 50% of the market is tech related and very much in a space race to capture investor’s hearts with AI. It seems like quite a concentration in a passive index investment. With recent volatility that can at times accentuate this concentration, 2025 may be the year for active asset management and possibly tip toeing away from being “all in”.
Alone with My Thoughts – 1/05/25
Are Wall Street traders and economies from all around the world telling us to have more babies? For example, Barron’s recently reported that the 3.7 million births in the 27 European Union countries in 2023 was the largest annual decline (-5.5% a new record) ever. They also reported in another recent issue that there were 33 major European corporate defaults so far in 2024, which is the second highest number of failures since 2008. Maybe we need to follow Elon Musk’s lead (he has 12 children) when it comes to his concerns about the lower population rates and the resultant effects on world finances and civilization. Investors take note.
