How We Define Risk

The potential of losing money by investing in the stock market has become front and center over the past several weeks. The decline in the S&P 500 index and the bigger drops in other indexes and stocks has drawn attention. It has also led to the usual chatter about what the downside volatility means and…

 

Credit Spreads Aren’t a Reason to Alter Bond Allocations

A year ago, I wrote about why I favored corporate bonds instead of government bonds. I revisited the subject this week after doing my semiannual review of my workplace retirement savings account. One of the funds I hold in my 403(b) account is the Vanguard Intermediate-Term Investment-Grade Fund Admiral Shares (VFIDX). As the name implies, it invests…

 

Actionable Steps for the Current Market

As a follow-up to last week’s commentary about the recent bout of downside volatility and how many stocks are performing worse than the major indexes, I want to discuss strategies this week. Specifically, actionable steps you can take between now and the end of the year. None of these will be purely tactical in nature (e.g., “reduce…

 

Increasingly, Just One Analyst Is Behind a Stock’s Long-Term Earnings Forecast

Based on casual analysis, it seems there has been a decline in the number of analysts making long-term earnings forecasts on publicly traded stocks. When the subject was raised during a regular portfolio review meeting, we lacked the evidence to support or debunk this hunch. So, using AAII’s Stock Investor Pro stock screening and database…

 

SEC to End Five-Cent Spreads on Small-Company Stocks

It didn’t receive much in the way of attention, but last week the U.S. Securities and Exchange Commission (SEC) announced its intention to end the pilot program testing five-cent bid/ask spreads. The program mandated minimum quotations and trading increments for stocks of certain smaller companies. It was originally scheduled to expire on October 2, 2018….

 

Mr. Market Has Reverted Back to a Calm State

On Tuesday, The Wall Street Journal observed in its morning briefing that “The S&P 500 has gone 53 trading days without a move of 1% in either direction, the longest such streak since January.” As of today’s close, the streak now stands at 56 days. This is just the fifth time in five years that…

 

Helpful Steps My Late Father-in-Law Took

Special note: This commentary originally ran in March 2017. I received more feedback about it than any other Investor Update column I’ve written over the past eight years. Since many of you found it helpful and I’m out of the office this week, I decided to republish it. My father-in-law passed last week. Les was…