This fall the Federal Reserve intends to officially begin the process of unwinding their large balance sheet, marking an end to the program known as quantitative easing (QE). This program was initiated in 2008 as the U.S. economy was quickly heading into recession, led by the U.S. housing crisis. The Federal Reserve, over the following six years, purchased $4 Trillion worth of Treasury bonds and mortgage-backed securities in an attempt to prevent the recession from turning into another Great ... [Continue Reading]
Articles and resources related to Market Conditions.
Last week, Wall Street’s so-called 'fear indicator,' the VIX (Chicago Board Options Exchange Volatility Index), set a new low since just prior to the 2008 financial crisis. The only time in the past two decades that this indicator was so low was in 2007, right before markets started to decline. Many are wondering aloud if this means that the market has again become too complacent, and that a recession and subsequent market decline are just around the corner. This is the subject of today’s ... [Continue Reading]
2016 was a rollercoaster ride for equity investors. Despite the volatility, and a few white knuckle moments, last year ended up being an excellent one for investors who maintained a long-term perspective. Not only did the S&P 500 recover from the worst start in U.S. stock market history, but CCM clients also captured additional returns from the outperformance of small company stocks and value stocks. In this recommended reading article, Paul Merriman recaps that outperformance and highlights ... [Continue Reading]
As the new year begins, one of the most common questions I’m asked in my role at the firm is, “What do you think about 2016? Was it a good year?” In this context, the question typically refers to the year from an investing perspective. However, assigning a letter grade or a broad ranking to the span of a year doesn’t necessarily align with the depth of our experience and how the world’s events impact our lives. Categorizing a year as exclusively good or bad can overlook the complexity of events ... [Continue Reading]
“When markets hit new highs, is that an indication that it’s time for investors to cash out?”This is the question asked by the research team at Dimensional in their new white paper "New Market Highs and Positive Expected Returns." With new all-time market highs being reached earlier this month, and the psychological watermark of 20,000 on the Dow Jones industrial average close to being broken, it seems perfectly logical to wonder if future returns might be lower or if a correction should be ... [Continue Reading]