The Importance of Interest Rates on the Economy and Financial Markets

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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 …

Aug. 26 Memo to Clients re: Investing vs. Trading

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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 …

Aug. 24 Memo to Clients re: Investing Pitfalls amid Market Volatility

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Given the continued sharp stock price declines on Friday, August 21st, and thus far on Monday, August 24th, we’re sending this follow-up memo to discuss the pitfalls of alternatives to our customary advice of maintaining your current stock allocation. Our advice presumes that stocks are a necessary part of your investment portfolio to meet your long-term financial goals. The following …

Aug. 21 Memo to Clients re: Stock Declines

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The past few days have seen sharp declines in US stock prices, but as of August 20, the S&P 500 stock index is down all of 1% for the year, and still above its January 30th low by approximately 2%.  The current problems for the market range from slow world-wide economic growth; to more specific problems in China, and certain …