When Diversification Fails

 

Correlation coefficients are one of the most complicated areas of the asset management world, but the idea behind them is pretty simple–or, at least, most of us thought it was until the 2008-2009 meltdown. The basic idea is that you study the price movements of, say, the stocks of large companies (represented by the […]

Relative Prosperity

 

You might have read that the U.S. investment markets are jittery on the news that Japan has experienced two consecutive quarters of economic decline—the official definition of a recession. But if you turn the news around, it offers us a reminder that, however much we complain about slow-growth recovery from 2008, Americans are actually […]

Cheap Oil Gets Cheaper

 

The economic news that everybody is talking about lately is the sudden unexpected drop in oil prices. One type of oil, West Texas Intermediate crude, has fallen from over $140 a barrel in the Summer of 2008, and $115 a barrel as recently as June, down to $91, and there is no sign that […]

Japanese Stimulus

 

You may have read that the U.S. stock market was buoyed to new record highs by news that Japan was stimulating its economy. And you might have wondered about the connection.

Over the last 25 years, the Japanese economy and stock market have been remarkable stories, but not in a good way. As the […]

Election Returns

 

Now that the midterm elections are safely behind us, a lot of people are wondering how politics will impact their investment returns. The conventional wisdom is that divided government–where one party holds the White House while the other controls the House, the Senate or both–is good for the markets. But is that true?

The […]

Losses Do Matter

 

Everybody who told us that the steep market drops earlier this month wouldn’t last can rightly claim they’re right. When the S&P 500 was down 7.4% during a two-week selloff, there was no way to know whether we’d have to endure more of the same. Staying the course turned out to be exactly the […]

Getting Premium at the Cost of Regular

 

Whenever we fill up our cars with gas, we have a choice: we can buy “regular,” or we can pay extra (sometimes as much as 30 cents a gallon extra) for “premium” gasoline. Experts say that, for most cars, premium gas doesn’t accomplish anything except, perhaps, adding to the bonus pools of oil company […]