Q1 Review: Worst To First In 3 Months Flat

Some of last years worst performing fund categories are the best performers this year. Surprised? You shouldn’t be. It happens often. It’s not always consistent across every asset class or sector. But when you beat something down far enough, eventually it has no place to go but up.

It happened with solar in 2013. This year-long term government bonds, muni bonds, REITs, utilities, and gold are outperforming the S&P 500.

Should you pour money into these categories because each performed well? Chasing is a bad strategy. Maybe it’s time to spring clean your portfolio, not rearrange it. Continue Reading…

Outlook 2014: What To Expect In The New Year

Crystal BallEvery year the predictive powers of Wall Street are put on display for all to see. What follows is a wild mix of forecasts for the next year. Some are outlandish, others obvious, but another main theme plays out. Skepticism at the thought itself.

Should we be surprised? Not really. Much like baseball, batting .300 is a good year for forecasters. Far too often the focus turns to the one or two home runs they hit every year while ignoring all the strikeouts.

For me, it’s a way to test my understanding of what’s going on and have some fun in the process. That last part can’t be overstated enough. This exercise is meant to be fun first. Honestly, I just hope to do better than last year.

Call it what you will. Predictions. Best guesses, some more educated than others. It’s what I think will happen based on what I know now. Of course, rarely do things go as planned. There are always a few surprises. I don’t expect 2014 to disappoint either. With that, here’s my take on the next twelve months. Continue Reading…

Where Do We Go From Here

What appeared to be a great start to the year has since cooled off. The S&P 500 has had a great year in only eight months. Bonds became a real downer in a very short time. Europe is showing signs of life. Emerging markets have done so poorly, for so long, it might be the next big opportunity. The Fed has done nothing since it announced a planned future possibility of tapering. And the market impatiently throws temper tantrums in the hopes of finding out.

Caught amid all that, investors are scrambling to make up the difference. In the end it still comes down to proper allocation. As is always the case, the question becomes where do we go from here? Continue Reading…

The Feds Power Of Words

Not much has changed in the past three years with the Fed and monetary policy. QE is still ongoing. Inflation is low. Unemployment is slowly falling. The Street is still trying to  predict the end of QE. So nothing has changed except for one word.

Taper  ta·per (tāpər): To become gradually smaller or less; slacken and finally stop. Bernanke’s beard tapered off.

Who knew one word had so much power. Since its introduction, dividend stocks have sold off and bonds have sold off. Asset bubbles aren’t talked about as much (those were the days). One word seemingly ended worries of three asset class bubbles while creating new risks for each at the same time. Continue Reading…

Planning Around Gold And The Weeks Ahead

GoldNow that the tax deadline is over we can get on with everything else. Enough has happened in the last two weeks to make big waves in the markets. Earnings season, Japan, and falling gold prices all made news. Two matter, one does not, unless you owned gold.

Japan kicked things off with an aggressive monetary policy announcement. It will follow the Feds playbook to jump-start its economy.  If you didn’t know, the Bank of Japan has fought deflation for the past two decades and failed.

It’s latest attempt to jump-start inflation will throw 60 to 70 trillion yen at the problem. If it works, it would push more money out of savings accounts and into stocks. Sound familiar?

We can add one more country to the list of long-term debt buyers trying to boost an economy. Continue Reading…

Annual European Bailout Returns

CyprusOnce again, Europe has taken the center stage in the global economy. This has become an annual rite of passage.

Europe has taken upon itself to slowdown the market’s great start with another debt crisis. In other words, Europe has taken their ball and gone home. Again. For the fourth time. Such a tease. And we keep falling for it.

This year’s debt crisis is brought to you by Cyprus. Did you know Cyprus was in the European Union? Me neither. And it’s the geography lesson of the day (check the map). Who knew a country one million strong with an economy weighing in at 0.2% of the EU could put the brakes on a fantastic first quarter run. Continue Reading…