For decades, it has been conventional wisdom in American business that the one proper objective of corporate managers is to increase the company’s share price. That is the principal behind stock options, which tie compensation to share price. Other considerations, such as worker satisfaction, civic engagement, or environmental impact, have been perceived as irrelevant, except to the extent that they bear on profitability, and thus on share price. The…
Many people are aware of the benefits of a Roth IRA: you put your after-tax money into it, after 20 or 30 years when you retire, you pull all of the money out tax-free. This can be a big benefit when you consider the effect of compounding returns over time. There are other benefits such as that you may be in a lower tax bracket when you pay taxes…
Currently, one of the nation’s biggest banks, Wells Fargo, is in the middle of a serious scandal. The company fraudulently opened extra customer accounts without their consent or knowledge in order to boost revenue. (Click here to read story) Prior to the latest news, Wells Fargo was considered to be one of the darlings of Wall Street. Warren Buffett, a major stakeholder, loved to talk about the bank. However, since the…
The global investment community has been focused on the recent vote by the UK to leave the European Union, broadly referred to as the “Brexit.” This historic event will have economic impacts on the UK and the European Union, as well as their trading partners. Unsurprisingly, equity markets experienced sharp declines in the days following Brexit and have since seen a significant rebound. If you haven’t already, please read our…
The global investment community has been focused on the recent vote by the UK to leave the European Union, broadly referred to as the “Brexit.” This historic event will have economic impacts on the UK and the European Union, as well as their trading partners. Unsurprisingly, equity markets experienced sharp declines in the days following Brexit and have since seen a significant rebound. If you haven’t already, please read…
How do you solve a problem like commodities? Sound of Music, anyone? Well, if you are not a fan of musicals, that is okay. Chances are at this point in the market cycle, you are probably not a fan of commodities, either. Commodity prices are clearly a hot-topic right now and not in a good way. As anyone who owns commodities knows, returns for the asset class have been more than frustrating the…
Halloween is almost upon us and it seems the market is doing its part to spook investors. As a result, many people may experience higher levels of anxiety regarding their investments. We prepared the following commentary as part of our most recent quarterly update to our clients. We think it provides useful perspective. Market Volatility The global equity markets the past two quarters can be summed up in one word: volatile. As…
Many people are aware of the benefits of a Roth IRA: you put your after-tax money into it, after 20 or 30 years when you retire, you pull all of the money out tax-free. This can be a big benefit when you consider the effect of compounding returns over time. However, not everyone can contribute to a Roth IRA. The reality is the IRS puts limitations on who can contribute…
In the media there is a lot of talk about the Federal Reserve Board (“the Fed”) and its chairman, Ben Bernanke. The Fed is often charged with managing the country’s monetary policy. Monetary policy helps manage the amount of actual money in the financial system and helps establish interest rates for US borrowers. Currently, the Fed is taking extraordinary steps to keep interest rates low in order to help facilitate…
Did you know that most active equity mutual fund managers under perform their peer benchmarks over time? As the time period stretches past 10, 15 or 20 years, the amount of under performance can be staggering. Under-Performance in US Equities According to data compiled by The Vanguard Group (Phillips, Christopher. “The case for indexing.” Valley Forge, PA: The Vanguard Group, 2012.) the percentage of actively managed US equity funds that…
