Lately I’ve been asked if the latest market rally, a record breaking move of 38% or so over the past few months, validates the idea that investors should just buy and hold stocks. For the record, there is no market move, either up or down, that validates the idea that valuations don’t matter and investors…
DetailsHarry Markowitz is considered the father of modern finance by many, and his paper, Portfolio Selection, published in 1952, is the foundation of the Nobel Prize winning body of work known as Modern Portfolio Theory. It provides the mathematical foundation for strategic asset allocation, which is how professionals apply buy and hold investing to multiple…
DetailsCarl Noble, one of our excellent Pinnacle analysts, just passed around a chart from Ned Davis Research showing the short-term standard deviation of the change in price between the Financial SPDR, (ticker XLF), an exchange-traded fund that owns a diversified basket of financial stocks, and the rest of the market as measured by the S&P…
DetailsThe S&P 500 has rallied from the March lows and is now standing in positive territory for the year.But I wanted to take a look at how we arrived at this positive performance.In the chart below I have in the left column the 2009 return for the S&P 500, all 10 GICS sectors (using ETFs),…
DetailsThere seems to be a misunderstanding about generating an investment forecast that presumes that active portfolio managers always have a reliable one in their back pocket. Nothing could be further from the truth. Sometimes the forecast is as simple as “I don’t have a strong opinion one way or the other.” Such a forecast actually…
DetailsMy colleague, Carl Noble, recently wrote about the latest GDP numbers, and mentioned that we view them as mostly backward looking at Pinnacle. Last Thursday, the March report on Personal Consumption Expenditures (PCE), which is just geek speak for consumer spending, was released. Consumer spending data always grabs our attention since spending is such an important driver…
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