Eight years ago from yesterday the S&P 500 set its closing low of the Great Recession bear market. We couldn’t know it at the time, but that day marked the end to one of the worst bear markets on record. Since that low close of $676, the S&P has risen 250% to $2,365 where it closed yesterday. Here’s the path it took.
Pretty impressive. In fact, this bull market is the second longest and second strongest going all the way back to the Great Depression.
In addition to experiencing the second greatest rise since the Great Depression, this market is now also experiencing the second most stretched valuations of all time… just a few percent behind the Dot-Com Bubble. To be clear, that’s not a good thing.
Continue reading “Happy 8th Birthday to the Bull Market”
Your investment strategy should be determined by the lesser of (1) your financial capacity for risk and (2) your emotional capacity for risk. Otherwise, you are likely jeopardizing your financial goals.
What’s the difference you ask?
Financial capacity is the ability to achieve your financial goals even after a severe stock market decline.
Emotional capacity is the ability to stomach volatility and losses in a severe stock market decline.
A couple examples will help illustrate these concepts.
Continue reading “Financial vs. Emotional Capacity for Risk: The Importance of Weighing Both When Building An Investment Portfolio”
Dr. John Hussman wrote another great commentary this week on the topic of extreme valuations in the market currently. His article is linked here with some notable quotes extracted below:
Notable quotes from the article:
Continue reading “Hussman: When Speculators Prosper Through Ignorance”
Wedding season is almost upon us. I love weddings. When I think of weddings I think of dressing up, mingling with friends and family we haven’t seen in a while, fancy venue, and… free beer.
I’ve experienced weddings from a few different perspectives: as a guest, as the co-star, in a supporting role and as the bartender. Bartending is a great gig for a college-age kid by the way.
Bartenders are notoriously observant…especially once the guests are loosened up and start filling the dance floor because this is the time when things start to slow down for the bartenders giving them a chance to really observe the festivities. Not long after this point (sometimes it feels far too soon when you’re a guest) the party begins winding down, and the cleanup begins.
But you don’t need to be a bartender to make the following observations. In fact, I’m sure you’ve already made these observations:
Continue reading “Free Beer! But First…What Free Beer Teaches Us About Economics”