Category Archives: Analysis

The Individual Investor is at a Disadvantage

In the following video, Michael Lewis, author of “The Big Short,” delivers his personal experience with investment management during the financial crisis. He describes the inherent conflict of interest investment banks have because of their dual roles as both client advisors and proprietary traders. Continue reading

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What’s the equation for long-term, consistent returns?

Clients and advisors ask me–all too frequently–“What is a good ETF/Mutual Fund/Stock to invest in?” Generally, these questions are accompanied by some type of buy-and-hold comment indicating these monies are for retirement. Let’s break this question apart in this way: … Continue reading

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The Yen’s Meteoric Rise: The Case for Intervention

Central Bank policy makers seemed to be engaged in a race to the bottom, each seeking to depress their currency in order to hike exports and increase the attractiveness of their labor force in the international market.

The Japanese have long advocated for a weaker Yen, particularly since China’s rise to prominence on the back of an artificially low Yuan, and have become alarmed at the rapid increase in their currency relative to major trading partners. Despite the fact that top policy makers expressed a commitment to open markets, the tide has rapidly turned and now these same individuals are openly speaking about market intervention. The probability of the BoJ taking steps to increase competitiveness via a Yen depreciation was greatly magnified by the recent announcement that China had surpassed Japan as the world’s second largest economy.

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Tax Receipt Increases May Be Too Late

Harrisburg, Pa., will skip a $3.29 million payment on its general obligation refunding bonds, series D and F of 1997, according to a letter obtained by Dow Jones Newswires.

Clients and advisors have found themselves reaching for yield in this low return environment. After calculating the tax-equivalent yield, municipal bonds were some of the highest yielding investments. It is unfortunate that the trend of reaching for yield has ignored the risk associated with these investments. Municipalities do default. Governments do default.

Based upon this default, the risk premium for holding municipal debt obligations just went up. As with a previous post, it is imperative to be able to dynamically adapt your portfolio structure.

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Lithium: The Next Oil?

A unique and highly reactive metal, lithium is the lightest and least dense solid element known. For years the relatively rare element has been studied and utilized for a variety of applications ranging from medical usage to nuclear power generation. More recently, lithium has being touted as “the next oil” and as a cure-all for the energy and climate problems facing the world. Investor interest is increasing daily as the material has generated considerable excitement. Despite the great aspirations, it is important for a prudent investor to avoid being caught up in the hype. Examining the true fundamentals of this anomalous metal must be done in an objective manner if investors are to safely profit from lithium.

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