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
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
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
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
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, …
Ongoing Market Recoveries Against a Backdrop of Uncertainty
The broad stock and bond markets experienced ongoing recoveries against a backdrop of uncertainty in April. US stocks have risen almost 8% for the year, with developed markets up 10% and developing markets up 3%. The 10-year US Treasury rate has declined from 3.88% at the beginning of the year to 3.44% at the end of April, and in turn …
Market Gains Across the Board
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 …
Think Like a Freak
I’m a relative latecomer to podcasts. I had heard a lot about them, of course, but hadn’t really tried them out until the last year or so. (I’m a notorious late-adopter of pretty much all new media and technology.) We started with Serial, and then moved on to Office Ladies, featuring Jenna Fisher and Angela Kinsey dissecting each episode of …
Making Sense of the Recent Bank Failures
Recent economic and financial news has left many heads spinning and brought back reminders of the 2007-2009 financial crisis. To help you make sense of the recent bank failures, below we provide an overview of economic events, share our current assessment, and take a look at the bigger picture. Current Economic Events Here are a few of the main events …
Stocks and Bonds Fell in February
Stocks and bonds fell in February after recovering over the past four months from the declines of early 2022. Bonds prices fell as the benchmark 10-year Treasury rate rose to 3.92% at the end of February from 3.52% at the end of January. This rate began 2023 at 3.88%, after starting 2022 at 1.51%. We discuss interest rates in more …