There has been a lot of talk in the press about stock market volatility this year. During the last week of January and the first week of February, there was talk of a “correction” (a 10% decline in the stock market). The US stock market (represented by the S&P 500, SPY in the chart below)[Learn more…]
Investments
Responding to the Recent Stock Market Decline
You may have heard that the stock market has been very volatile recently, with several days of significant declines. The drops in the US market on Monday, February 5th and Thursday, February 8th were especially large, around 4%, depending on the index. This followed a decline on February 2nd of a bit over 2%. To add[Learn more…]
Stock Market at Record Highs – What Now?
Stock Market at Record Highs – What Now? The stock market has been rising fairly steadily for some time. Depending on the newspaper you read, or the analyst you follow, this “bull market” has been going since March of 2009, or September of 2011. As the “nominal” columns in the table at right indicate, the[Learn more…]
August 4, 2011 Market Decline
Yesterday, world stock markets declined significantly. The S&P 500 lost 60 points, or nearly 5%. Other US stock indices had similar losses. International markets had mostly smaller declines (3-4% in Europe, 0-2% in Asia). Today, Asian and European stock markets lost roughly enough to make up the difference with yesterday’s US market declines (although European[Learn more…]
Yield Curve Inversion
Who’s afraid of the inverted yield curve? The financial press has been worrying about the yield curve[1] recently. The yield curve is “flattening,”[2] and that flattening “raises a warning flag.”[3] If you read the articles, you’ll see that the authors are most concerned about the possibility that the yield curve may become “inverted.” This raises[Learn more…]
Updating Preferred ETFs – An Analytical Approach
Every year, we review and update the preferred exchange-traded funds (ETFs) in Sensible Financial’s investment models. We focus on (1) minimizing tracking error, the difference in return between a fund and its benchmark index and (2) cost-efficiency – we want your investments to follow the model closely at the lowest possible cost. In our ETF[Learn more…]
Should you be concerned about exchange traded funds (ETFs)?
A recent Wall Street Journal article raises concerns about exchange-traded funds (ETFs). Specifically, on August 24th, a day of extraordinary stock market volatility, several ETFs traded well below the values of their underlying securities (their net asset values or NAVs). You might wonder whether you should be concerned about this issue – after all, Sensible[Learn more…]