As the financial markets respond to the new health and economic uncertainties stemming from the spread of the coronavirus, most of the attention has been focused on the dramatic fluctuations of the US stock market. After the last week in February, the S&P 500 had declined 11.5%, from 3,338 to 2,954. In the first week in March, surprisingly, the index …
Coronavirus & Stock Market Declines
During the last week, Park Piedmont has written two Special Comments regarding the major financial issue of the day, which is the negative impacts of the newest coronavirus on the health, economic activity, and stock prices around the world. You will note the first one dated February 25th focused on the percentage declines of the S&P 500 index during five …
Special Memo: Longer Term History of Stock Price Declines
The US stock market (S&P 500) has declined 12% from its all-time high of 3,386 reached on February 19th (measured from its close of 2,978 on February 27th). A decline of 10% to 20% is referred to as a correction. This decline, attributed primarily to the likely negative economic impacts of the spread of the new coronavirus, comes in the …
Special Memo: Coronavirus & Market Declines
After the substantial declines of 3% or more in US and international stock prices on Monday, February 24th, we are writing to provide some additional information on the situation. The media has attributed the declines to the spread of the new coronavirus, even as there are some signs of improvement in China, where this all began (NYT, front page, 2/25/20). …
Uncertainty and Financial Markets
The recent appearance of the fast-spreading and at times fatal Coronavirus; the tragic deaths of Kobe Bryant, his daughter, and seven others; and the warning from Larry Swedroe (above) that we repeat each month; all have a common underlying theme, which is that the future is unknowable, and uncertainty is very much part of the human condition. This has been …
On Asset Allocation
This month we present an expanded discussion on asset allocation, which we think is pertinent in light of the major gains in US stock prices for the year 2019. Using the S&P 500 as a proxy for US stocks, the index advanced from 2,507 at year-end 2018 to 3,231 at year-end 2019, a 724 point, or 28.9%, increase. (Unless otherwise …
Joyful & Mindful: PPA’s Guide to Holiday Gift-Giving
The holiday season is here, and while it may be the “most wonderful time of the year,” holiday shopping can make the season of giving one of the most busy and stressful. Finding the perfect gift for loved ones can feel next to impossible; according to Harvard Business School professor Michael Norton, “being obligated to give and worrying about how …
Interest Rates and the Current Financial Markets
At the end of October, the Federal Reserve reduced the short-term interest rate it controls by a quarter percentage point (1/4%), the third such decrease during 2019. Ten-year US Treasury yields continue below 2%, although they have now moved higher than the three-month yield, reversing at least for now the so-called “inverted yield curve.” This unusual circumstance describes a time …
Impeachment and the Financial Markets
The financial media continues to assign reasons for current stock and bond price movements, up and down, including: (a) the extent of economic slowdown in the US and internationally; (b) progress, or lack thereof, in the ongoing trade war with China and other countries; and (c) the Federal Reserve’s willingness, or reluctance, to continue lowering interest rates to stimulate economic …
Early Lessons About Money
Usually in our Monthly Comments, we share our observations about the financial markets. But this month, we’d like to shift the focus, onto some thoughts about how we live with money. We start with a question: How did you learn your early lessons about money? Was it from your family? Or maybe from your friends? Were you in a classroom, …