Summer is here once again with its ubiquitous combinations like mosquitoes and barbeques, lightning and thunder, swimming pools and sunshine. One exciting pairing for 2019 that has been far less common, in fact it hasn’t happened since the early 1990s, is an American League-leading Minnesota Twins and equity market all-time highs. As a lifelong Minnesota sports fan, and having experienced what felt like greatness coming up short one too many times, it’s easy to be conditioned to feel that the ... [Continue Reading]
Updates and articles on timely topics from the Investment Team.
Understanding how markets function is critical when making investment decisions. This is why Hendrick Bessembinder’s 2018 study of historical stock returns was so important; it revealed to investors that the vast majority of individual stocks underperform. This information is critical. It helps us better understand why active stock-picking managers underperform at such a high frequency, and it gives us a deeper understanding of the importance of portfolio diversification--not just to mitigate ... [Continue Reading]
March 9, 2009, is an important day in our shared history. We didn’t necessarily know it at the time as it took a few months for the significance of the day to reveal itself, but it was on this date when the financial markets hit rock bottom during the Global Financial Crisis (GFC). From that day forward the markets stopped their painful retreat and began to recover. That was ten years ago now, and as we reflect on those ten years, of course there are countless learnings and insights that could ... [Continue Reading]
Research demonstrates that over the past 50 years, every U.S. recession may have been predicted ahead of time by using one simple indicator--the spread between short and long-term government bonds. Usually, long-term bonds offer higher yields than short-term bonds due to the additional risk that an investor assumes when buying bonds with longer maturities. However, every once in a while the dynamic flips, where short-term government bonds offer higher yields than long-term government bonds. This ... [Continue Reading]
The S&P 500, an index that tracks the performance of large U.S. company stocks, has delivered 9.99% average annual returns since 1926 1 . We know that this terrific performance is compensation to investors for taking on risk, and that returns weren’t achieved in a slow and steady manner. Investors don’t have to look too far back in time to remember the poor performance of the tech bubble in the early 2000s or the financial crisis of 2008. In fact, the 10-year annual return of the S&P ... [Continue Reading]