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 …
February Financial Markets in Light of Rising Interest Rates & More About Bitcoin
In February, 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 rising from 0.93% to 1.40%. Many in the financial media have begun to attribute down days in the stock market to this move to higher rates. We at PPA are quick …
January Markets for Stock & Bond Prices
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 …
The Trouble with Crystal Balls
In his first piece of 2021, Jason Zweig, the “Intelligent Investor” columnist for the Wall Street Journal (WSJ 1/9/21), offered the following hypothetical: “Imagine that it’s Jan. 1, 2020, and you have a magic crystal ball. It tells you that coronavirus will spread like wildfire, killing nearly 2 million people worldwide and putting the global economy into an unprecedented coma …
Stock Prices & Looking Ahead to 2021
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
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 …
November 2020 Stock Prices
During November, 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 November at 3,622; 29,639; and 12,199, respectively. The percentage gains …
The Psychology of Money
“Behavioral finance” is a relatively new but increasingly influential part of the financial world. Where traditional economic/finance theory assumes that consumers and investors regularly maximize their opportunities, behavioral finance acknowledges that this is not always the case. If you’re interested, excellent books on the subject include Thinking, Fast and Slow by Daniel Kahneman; Misbehaving by Richard Thaler; Nudge by Thaler …
Bond Prices
As stock price volatility continues, both up and down (more down for September and October, after a major gain from the 2020 lows in March through August), investors tend to pay more attention to bonds as an alternative to stocks for their liquid investment portfolios. (Although our Comments are written as of the end of each month, we take note …
Stock Prices
In our August Comments, we presented several investment definitions and principles that we consider useful in further understanding price changes in the financial markets. Interestingly, the price earnings (P/E) ratios we discussed in August have become a talking point in September’s media coverage of the volatility. Briefly put, some number of market analysts and financial media believe that stock prices …