What interest rate do you use when planning for life? Rick Miller discusses the use of risk-free rates when planning for returns.
Stock Market
Expected Returns and the Risk Premium
Returns are unknown, and an individual cannot be certain they will achieve a larger return from one management strategy over another. Rick Miller discusses the how risk premiums should factor into expected returns.
Recent Stock Market Performance in Context
The stock market has been quite volatile in the last month. There has been considerable investor uncertainty associated with the novel coronavirus and COVID-19. Historical perspective The chart shows the performance of the S&P 500, adjusted for inflation using the US Consumer Price Index (CPI) since the beginning of 1926 (when the Standard Statistics Company[Learn more…]
The 2011 Credit Crises and Market Volatility
The current credit crises in both Europe and in the US are “sovereign” crises: they reflect investor concerns about government ability to repay debts. Investor concerns are clearly present in declining stock prices and stock market volatility. Stock market volatility is likely to continue until governments resolve both sovereign credit crises. The next several months[Learn more…]
Full Stock Market Perspective
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…]
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…]