Category Archive

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: …

On Thursday, June 23, British voters, by a majority of 52% to 48%, voted to have their country leave the European Union (EU), an event dubbed “Brexit” by the media. Since the financial markets reacted sharply to this event (stock prices down, then quickly recovering; bond prices sharply higher, meaning continuing lower yields to investors), and the media proclaimed the …

Financial stock markets around the world have reacted negatively to the unexpected victory of the “Leave EU” campaign in Great Britain.  However, US Treasury bond prices are higher, which often occurs when stock markets decline sharply. While the immediate impact on the markets seems clear, the longer term outcome based on England’s negotiations with the EU over the terms of …

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 …

From time to time since Park Piedmont Advisors was founded in 2003, we have quoted extensively from various authors whose books we have embraced.  These authors and their books include Burton Malkiel’s A Random Walk Down Wall Street;  John Bogle’s Common Sense on Mutual Funds;  David Swensen’s Unconventional Success; Charles Ellis’ Investment Policy; and Nassim Nicholas Taleb’s The Black Swan and Fooled by Randomness. …

With a volatile third quarter now ended, it may be helpful to offer some historical context for the recent market declines. Since the financial crisis in 2008, stock prices have had only one substantial period of decline (approximately 20%), in 2011. Since this has been a long period of generally steady stock price increases, it is perhaps reasonable to point out that …

The much awaited decision by the U.S. Federal Reserve as to whether to start raising interest rates was answered in the negative yesterday, while still leaving open the possibility of an increase before year end. “Heightened uncertainty abroad” and “prospects of low inflation,” both of which are reasons not to raise rates, were deemed more important at this time than …

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 …