The Federal Reserve meeting on Wednesday and Chairman Ben Bernanke’s comments about tapering the bond buying program created a two day sell-off of almost every asset class. With stocks, bonds and commodities seeing across the board selling, one has to wonder why? Continue reading “June 2013 Commentary”
Insights & Commentary
April 2013 Commentary
With the US stock market seeing gains in each of the last 4 calendar years and rising 12% so far in 2013, many investors are worried that the stock markets are overvalued. Continue reading “April 2013 Commentary”
Financial Literacy Term of the Day: Monetary Policy
Monetary Policy – The regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency. Monetary policy is one the two ways the government can impact the economy. By impacting the effective cost of money, the Federal Reserve can affect the amount of money that is spent by consumers and businesses.
Financial Literacy Term of the Day
Fiscal Cliff – A combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective December 31, 2012. The idea behind the fiscal cliff was that if the federal government allowed these two events to proceed as planned, they would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates and undermined consumer and investor confidence. At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.
Financial Literacy Term of the Day
Diversification – A portfolio strategy designed to reduce exposure to risk by combining a variety of investments, such as stocks, bonds, and real estate, which are unlikely to all move in the same direction. The goal of diversification is to reduce the risk in a portfolio. Volatility is limited by the fact that not all asset classes or industries or individual companies move up and down in value at the same time or at the same rate. Diversification reduces both the upside and downside potential and allows for more consistent performance under a wide range of economic conditions.
Financial Literacy Term of the Day
Fixed Income: A security that pays a specific interest rate, such as a bond, money market instrument, or preferred stock.
Financial Literacy Term of the Day
Equities – An instrument that signifies an ownership position, or equity, in a corporation, and represents a claim on its proportionate share in the corporation’s assets and profits. A person holding such an ownership in the company does not enjoy the highest claim on the company’s earnings. Instead, an equity holder’s claim is subordinated to creditor’s claims, and the equity holder will only enjoy distributions from earnings after these higher priority claims are satisfied. Also called stocks or equity securities or corporate stock.
April 5th 2012 Commentary
It was an amazing start to 2012. The first quarter was almost too good to be true. There was an endless amount of up days, with a few scattered days of down. The S&P 500 ended the first quarter with a 12% return. This was the best first quarter since 1998. Continue reading “April 5th 2012 Commentary”
November 22nd Commentary
As we move into the holiday season, the stock market’s attention has drifted away from economic data and earnings reports. The focus is squarely on the travesty that is the world’s politicians and leadership. Daily volatility is driven by reports of the European Union’s inability to come to an agreement on austerity measures for troubled European countries. More recently, the spotlight is on the failures of the congressional “super-committee” to agree to deficit reductions. The disconnect between politicians and reality has always intrigued me, but it is now taking on a life of its own. What does it say for us as a country when our elected politicians cannot agree on $1.2 trillion of deficit cuts when in reality it is $5 to $6 trillion needed to make a difference? I fear that even if we elected new officials to lead our great nation, the results would be the same. I long for the day the markets react on earnings and economic data and not the spectacle that is political sitcom.
As always, I stress that in this ever-changing political and economic environment, sensible diversification is the key to weathering any market
uncertainties.
Jason M. Vavra, CPA, PFS
Disclaimer
The information contained herein is not considered an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual
investors. There is no guarantee that the figures or opinions forecasted in this report will be realized or achieved. Past performance is no guarantee of future results.
August 15 2011 Commentary
This is a quick note on some significant events today.
Most of the people who I have been speaking with recently know that I have been looking for some merger and acquisition activity to add some calm to the market. My thoughts have been that corporate balance sheets are in much better shape than the 2008 financial crisis and comparisons made to that timeframe are unwarranted.
I felt that a few merger and acquisitions would show investors that companies are confident about their own business prospects and do not feel as inclined to hoard the record amounts of cash sitting on corporate balance sheets. The result would be a reduction of the volatile markets we have seen lately and a return to stability.
Today, there were four notable acquisitions made by Google, Cargill, Time Warner Cable and Transocean. Hopefully this is the beginning to the end of the violent swings we have seen daily for the last week and a return to a more fundamental approach to the market.
As always, I stress that in this ever-changing political and economic environment, sensible diversification is the key to weathering any market uncertainties.
Jason M. Vavra, CPA, PFS
Disclaimer
The information contained herein is not considered an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. There is no guarantee that the figures or opinions forecasted in this report will be realized or achieved. Past performance is no guarantee of
future results.
