There have been many days during the first quarter when stocks have fluctuated, either up or down, more than one percent. Some days, those fluctuations have exceeded two percent. The investment community and media refers to these kinds of large fluctuations as volatility. We can use the major US stock indexes as illustrations: With the Dow Industrials at approximately 24,000, …

This month’s Comments provide current examples of an important point we have made regularly in the past: no one really knows the causes for stock prices and their sometimes dramatic changes. Current case in point: from Friday, February 2nd through Thursday, February 8th, covering only five business days, US stock prices (S&P 500), declined by approximately 9% (2,832 to 2,581, …

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 …

  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 …

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 …

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 …

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 …

At Park Piedmont Advisors (PPA), we advise clients that trying to predict future events, and the financial market’s reactions to future events, can often lead to disappointing results.   Rather, we advocate ignoring most current events and focusing instead on long term financial goals and the cost efficient investments that help achieve those goals. Here is an example of how even …

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 …

In the immediate aftermath of Donald Trump’s unexpected election as President of the United States, global stock prices are experiencing substantial short-term volatility.  As always, when events create this kind of volatility, we think it useful to step back and think more long-term with regard to your investment portfolio.  Here are some points worth considering: The meaning of “big” declines: …