The Proper Investment Time Horizon

I have been studying the Maryland State Pension and Retirement Savings Plan just because I’m interested in how professionals go about investing $36 billion of assets. It’s difficult to evaluate the plan’s asset allocation without considering the investment time horizon that is used to evaluate success. As you might imagine, the plan seems completely uninterested…

Dollar Breaking Down

This big news this week was that the European Central Bank (ECB) raised interest rates on Wednesday. While it was only a 0.25% increase, from a very low level (1% to 1.25%), it has had a big impact on currency markets. The euro has certainly gotten a big boost, and as a result, the dollar…

Review of Global Central Bank Policy

In this morning’s daily report, Ed Yardeni provided a useful review of Central Bank policy around the world. Since one of the biggest risks to the current bull market is a reversal of policy from being accommodative to being restrictive, I thought it was worthwhile to share some of the information in Yardeni’s report.

Pharmaceuticals Beginning to Show Some Life

Sector rotation is one way we attempt to add value in client portfolios. We rotate within both the equity and fixed income allocations, as we continue to look for good values across asset markets. Currently our equity portfolios have employed a barbell, with cyclical overweight positions in the Energy and Technology sectors, as well as…

Life Isn’t Always Linear

Being an Investment Analyst often involves looking at a vast array of indicators that are supposed to be correlated to different degrees with some relevant financial variable. When a given indicator is said to be either positively or negatively correlated to a variable, in most instances this refers to linear correlation. However, two variables may…

Coal a Winner on Nuclear Concerns

The ongoing crisis in Japan has cast a shadow on the nuclear industry, and even China has announced plans to look for alternative energy sources. There have been many perceived winners including solar energy and natural gas; however, the coal industry has become a major beneficiary due to current energy infrastructure. The nuclear industry is…

Guest Lecturing at Hofstra University

I have been invited to speak to the finance students at the Zarb School of Business at Hofstra University. The engagement is sponsored by GARP, the Global Association of Risk Managers. I’m very grateful to the Pinnacle client who asked me if I would be interested in speaking as well as Ahmet Karagozoglu, Ph.D., and…

Housing Problems Resurface

There have been several updates on the housing market in the past couple of weeks, and none have been very encouraging. This morning brought the latest reading of the S&P Case/Shiller Home Price Index, and it showed that housing prices are falling anew. The 20-city composite has fallen to its lowest point since May 2009.

Watching Gold Closely

Lately we’ve been watching the price of gold closely. What’s on our mind is that despite extreme havoc in the Middle East, a nuclear disaster in Japan, and a nasty plunge in dollar, the shiny metal has not been able to break convincingly to new highs. Late last week some analysts were noting a key…