At the end of June we made some trades in the Conservative portfolio largely because one of our holdings, ETRACS 1xMonthly Short Alerian MLP (MLPS), was liquidated for lack of investor interest. ...read the rest of this article»

The market was rolling along just fine in May with the volatility from earlier in the year seemingly easing and good economic data slowly pushing up stocks and interest rates (and inflation). Then, at the end of the month, Italy returned as a potentially destabilizing force to foreign investing, sending Italian stocks (which we own directly through iShares MSCI Italy Capped (EWI)) down sharply and taking the euro and most other foreign markets down with it. ...read the rest of this article»

Our slant towards longer-term bonds didn't help in April compared to benchmarks. ...read the rest of this article»

The relatively tame overall decline of 2.56% in the S&P 500 in March belies the extreme swings that have occurred in the market lately. In the last two months we've seen a fairly quick 10% drop followed by a very quick recovery and then another collapse just recently. Hot tech stocks actually moved to new highs in the bounce back. ...read the rest of this article»

The problem with a fast climbing market is that sometimes it falls just as fast. This was the case in 1929, 1987, and 2000. Valuations like P/E ratios are relevant to long-term returns but don't mean much when facing extreme short-term volatility. Investors want to make money during sharp rises but don't want to get caught without a chair when the music stops; they tend to leave quickly and in droves at the first hint of a downturn. ...read the rest of this article»

Too much of a good thing is the main worry right now. We cut taxes into an already heating up economy which will lead to more inflation which will cause the federal reserve to raise rates higher than they would with no tax cuts. This means higher mortgage and other financing rates — and if those go high enough we could be looking at another recession. ...read the rest of this article»

In 2017 the Powerfund Portfolios gained 13% and 12.1% in our Conservative and Aggressive portfolios respectively. It must have been a hot year in the markets because these were underwhelming returns, not considering downside. ...read the rest of this article»

It doesn't seem like what you would want to do in the face of dead-end bonds and fast rising equities globally (not to mention the increasing likelihood of corporate tax cuts), but we may have to take the portfolio's risk levels down a bit soon. Hopefully a risk reduction will be contrarian and not stupid…but the two often walk hand-in-hand. ...read the rest of this article»

OK it's official: the market is overheating. What minor skittishness there was around the 30th anniversary of the 1987 crash evaporated faster than a Bartles & Jaymes wine cooler spilled on the hood of a VW Rabbit in the parking lot of a summer concert featuring Poison, Ratt, and Cinderella. ...read the rest of this article»

Stocks were hot and recent bond gains evaporated as investors moved back into risky assets. Interest rate sensitive stocks (like telecom and utilities) were down as well — 10-year treasury bond yields moved from just over 2% in early September to over 2.3% by the end of the month. ...read the rest of this article»