The Random Quilt of Wall Street

Nick Levinson Comments, Life with Money

A picture is worth a thousand words, as the old saying goes. The “quilt” chart below, prepared by JP Morgan Asset Management, colorfully demonstrates many of the points Park Piedmont Advisors has made over the years. Several of them derive from Burton Malkiel’s 1973 classic, A Random Walk Down Wall Street: While the stock and bond markets have produced positive returns …

Money Market Funds as Part of a Balanced Portfolio

Nick Levinson Comments, Life with Money

Money market funds have displaced stock and bond investments in many portfolios, as a recent Wall Street Journal article discusses: “With markets rocky and cash earning 5% or more, investors have boosted their holdings of money-market funds to a near-record $5.6 trillion, according to the Investment Company Institute. Both individuals and institutional investors are piling in – asset managers now have …

The Trouble with One-Size-Fits-All Investing Approaches

Nick Levinson Comments, Life with Money

The Wall Street Journal posted an interesting article yesterday – “The Trusted 60-40 Investing Strategy Just Had Its Worst Year in Generations” by Eric Wallerstein – that several Park Piedmont clients have already asked us about. Especially in this period of geopolitical turmoil and what appear to be fragile markets, we thought it would be helpful to consider the article in …

Bonds and Fixed Income Alternatives

Nick Levinson Comments, Life with Money

We’ve discussed the August stock market update, but what about the bond market, or “fixed income,” as it’s also known in financial industry jargon? Interest rates have risen significantly over the past year and a half, as the US Federal Reserve and central banks around the world have worked to contain inflation. When interest rates rise, bond prices decline, and …

The Futility of Predictions

Nick Levinson Comments, Life with Money

As you know, we avoid making predictions about where the stock and bond markets are headed. There are simply too many factors that impact the markets – economic, political, atmospheric too – over the short and long terms. On the other end of the prediction spectrum, a Morgan Stanley analyst recently made the sheepish admission that “we were wrong. 2023 …

June Market Activity: Stocks and Bonds Continued Their 2023 Recovery

Nick Levinson Comments, Life with Money

Stocks and bonds continued their 2023 recovery in June from the dismal results of 2022. Broad-based US stocks rose 16% through the end of June, while developed country stocks increased 11% and emerging markets stocks were up 5%. The tech-heavy NASDAQ index climbed almost 32% through half of 2023. Bonds also had positive returns through June 30. With the benchmark …

May Market Update: A Crisis Averted

Nick Levinson Comments, Life with Money

To the surprise of many, the US debt ceiling issue was resolved relatively peacefully in the last week of May into early June. President Biden and House Speaker McCarthy worked out a deal that pleased few of the more extreme members of both political parties, but which raised the debt ceiling until early 2025 in exchange for modest spending cuts …

The Planning Fallacy: A Lesson in Behavioral Finance

Nick Levinson Life with Money

We wrote recently about a Freakonomics book called Think Like a Freak. That book included many important pieces of advice related to the personal financial advice PPA provides our clients. I just listened to a Freakonomics Radio podcast, “Here’s Why All Your Projects Are Always Late – and What to Do About It,” that has similar relevance to behavioral finance, …

Market Gains Across the Board

Nick Levinson Comments, Life with Money

After the large declines from 2022 in both the stock and bond markets, the first quarter of 2023 showed market gains across the board. US stocks rose 7%, developed country international almost 8%, and emerging markets international 3.5%. With the 10-year Treasury interest rate declining from 3.88% at the end of 2022 to 3.48% on 3/31/23, bond prices – which …