Special Memo: Longer Term History of Stock Price Declines

Sam Ngooi Comments

As stock prices continue their recent sharp fluctuations, mostly to the downside, we are writing again with more information (research from Guggenheim Investments), to present a long term perspective. From year-end 1945 to year-end 2017, covering 72 years and using the S&P 500 index (note: S&P 500 index and Dow Industrial average often have similar percentage price changes), there have …

Jan 2018 Comments: How Interest Rates Impact Stock Prices

Sam Ngooi Comments

  Last month in our discussion of interest rates, we stated that ”one major interest rate story for the year 2017 deserves additional comment:  the fact that while there were three one-quarter point increases in the short-term rates controlled by the Federal Reserve, the ten-year US Treasury rate, set by the marketplace of buyers and sellers, was almost unchanged for …

Special Memo: Current Stock Price Declines

Sam Ngooi Comments

Whenever stock prices experience large short-term declines, we make sure to check in with you to put the declines in perspective. The chart at the bottom of this memo provides figures that should help. The media likes to present large numbers in its reporting, but the focus should always be on percentages. Using end of January 2018 price levels, a …

Dec 2017 Comments: Bitcoin & Interest Rates

Sam Ngooi Comments

Since Bitcoin has become a very popular topic of discussion in and out of the financial world, we thought it was time for Park Piedmont to add our viewpoint. As you might imagine from a firm that advocates long-term investing with asset allocations implemented using low cost index funds, even the mention of Bitcoin would be highly questionable. Nevertheless, we …

Nov 2017 Comments: Giancarlo Stanton & the Folly of Prediction

Sam Ngooi Comments

As you may know, the Levinsons are pretty big baseball fans. Vic and Nick actually coached Tom’s little league teams (photos are available upon request), and Nick and Tom (and their sister Lynn) grew up going to Yankees games on the 4 train in the 70s and 80s.  So there was some excitement upon the announcement, made this past weekend, …

October 2017 Comments: Bond Investments

Sam Ngooi Comments

Last month we changed our focus from the surprising, ongoing advance of stock prices since the 2016 election, to bonds, the other major asset class in most client portfolios. During September there was a substantial increase in market interest rates, which brought the benchmark ten-year US Treasury yield to 2.34%, up 21 bps from August’s close of 2.13%. October’s increase …

Don’t Touch My Money, Just Hold My Hand

Sam Ngooi Comments

A recent article by Wall Street Journal columnist Jason Zweig, entitled ‘Don’t Touch My Money, Just Hold My Hand’ (WSJ, June 9, 2017), touched on topics that reinforce the investment approach Park Piedmont has been conveying to clients since its founding in 2003. First: many people look to investment advisers to boost their investment returns. If that’s your perspective, “you may …

“Dream Paychecks”: Thoughts on Hedge Fund Returns & Fees

Sam Ngooi Comments

We’re going to start commenting on investing/financial items we read or hear about in the media, in the hope that it’s interesting and informative for you. Please let us know if you have any comments or questions. Our first post involves the 5/16/17 NYT article titled “Dream Paychecks.” It discusses the enormous 2016 earnings for hedge fund managers (ranging from …

The Importance of Interest Rates on the Economy and Financial Markets

admin Comments

Since the financial crisis of 2008, and the resulting stock market declines (which reached 60% on the S&P 500 index, from October 2007 to the low of March 2009), interest rates have been maintained at extremely low levels by the US Federal Reserve (the “Fed”). While the Fed controls short term interest rates (overnight borrowing rates by financial institutions), it …

Aug. 26 Memo to Clients re: Investing vs. Trading

admin Comments

As the world’s stock markets continue to capture our attention with their extreme fluctuations, we think it’s important to present our view that most of this volatility is actually being created by traders, as opposed to long-term investors. (Note: this is our third memo in the last several days addressing current stock price declines.) What’s the difference between trading and …