Financial Media and the Search for (and Fallacy of) Causation

Victor Levinson Comments

During September 2021, the three major US stock indices declined between approximately 4.5% and 5.5%, with nine down days out of twenty-one total trading days. The financial media found it necessary to attribute causes to declines of this magnitude. But the frequent price increases in the midst of declines make the effort to attribute daily causation highly suspect. What we …

Are There Any Losers in the Financial Markets?

Victor Levinson Comments

After another month of modest, slow and steady gains in the financial markets, even in the face of what seems to be unrelenting negative news in the “real world,” we consider the existence of so many “winners” in the financial markets, compared with what appears to be precious few losers  A recent piece by Jason Zweig in his “Intelligent Investor” …

Asset Allocation & Rebalancing in a Rising Stock Market

Victor Levinson Comments

Asset Allocation, as our clients and readers know, refers to the diversification of an investment portfolio among a variety of liquid asset classes. At Park Piedmont (PPA), we use four such asset classes: Cash Equivalents; High Credit Quality Bonds; High Yield/Lower Credit Quality Income; and Stocks. In times of modest market price changes, allocations that have been established to meet …

Impact of Government Actions on Financial Markets

Victor Levinson Comments

With financial markets showing modest changes in May, even with Inflation fears and improving economic activity continuing to dominate the financial media (see also our April 2021 Comments), we add the impact of government actions to our discussion. While the market-based private sector dominates U.S. economic activity, there are times when government action plays a crucial role. When the Coronavirus …

Inflation, Financial Markets, and Bitcoin

Victor Levinson Comments, Digital Assets

INFLATION AND THE FINANCIAL MARKETS As the financial media continues to stress the role of inflation in the financial markets, we will discuss this topic of inflation here in the US. The Ibbotson 2020 SBBI (Stocks, Bonds, Bills, Inflation) Yearbook describes inflation as “the rate of change of consumer goods prices,” with the figures coming from the US Department of …

A More Detailed Look at Stock Market Results

Victor Levinson Comments

In March, market interest rates, which are set by buyers and sellers in the bond market, continued their rapid rise from year-end 2020, with the ten-year US benchmark rate increasing from 0.93% to 1.74%. But even in the face of these rising rates, stock prices continued to advance. Since we have discussed rising rates, inflation, and their impact on bond …

January Markets for Stock & Bond Prices

Victor Levinson Comments

January Markets for Stock Prices  January 2021 month-end stock market figures showed little change, even though there was considerable volatility within the month. The big new news for the financial media was the action in a few small stocks that made huge gains, most likely because they were part of a so-called “short squeeze” by relatively new traders in the …

Stock Prices & Looking Ahead to 2021

Victor Levinson Comments

During November and December, stock prices in the US and internationally made significant gains, which took the three primary US indexes to new all-time highs. Since the March 23, 2000 lows of 2,237 for the S&P 500, 18,591 for the Dow Industrials, and 6,860 for the NASDAQ Composite, the three indexes closed December at 3,756; 30,606; and 12,888, respectively. The …

Consolidated Appropriations Act

Victor Levinson Comments

Consolidated Appropriations Act In our March 2020 Comments, we discussed the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed on March 27, 2020 in response to the pandemic. We also addressed the parts of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, passed in late 2019, that made changes to IRA rules. We now review …