Introduction
Last week, the stock market was positive for half of the week and then negative for the remainder. More →
Last week I discussed how the risk are piling up on the debt side of the equation. However, those aren’t the only risks piling up which isn’t uncommon for humans. When we stray, we usually stray in a big way.
So, on top of the debt, there are other huge risks and today the discussion will be about valuations:
Now, I’ll discuss a lot of macro, and even some politics on Monday, but such factors might be insignificant or very significant depending on market valuations. High market valuations make stocks fragile, while low valuations make them more robust as once stocks are low, there is little room to go lower. However, when stocks are high, a lot of bad things can happen. The sad thing is that we have been there and we are doing the same mistakes all over again. More →
There’s some volatility in the markets that we haven’t seen for a long time.
The increased volatility is a sign of nervousness and the market is looking for direction.
No one knows where things will go in the short term as that’s impossible to know. Even Warren Buffett never fails to mention how he has absolutely no idea about where markets will go in the short to medium term.
If we look at things from a macro perspective, the economy is at its limits and we’ve seen the actual GDP finally reach the potential GDP. More →
Introduction
Volatility has really spiked in the last few weeks and the stock market is in correction territory. The main question everybody would like to know the answer to is whether this slump will continue.
Of course, even if fundamental indicators have been showing the market is overvalued for quite a while now, you can’t precisely know what will happen. However, the market isn’t risky because of volatility, it’s risky due to extremely high valuations and rising interest rates. More →
Introduction
Yesterday, I discussed how a stock market crash can happen anytime. However, most of the triggers that I mentioned would have had the same credibility in 2012. Therefore, getting out of the market now might not be the smartest idea.
It’s important to remember that time in the market and dividends are the main contributors to long term wealth creation. More →
Introduction
Yesterday, we discussed how the economy is in the late part of the economic cycle and everything is leading toward a recession.
No one knows exactly when the next recession will start or what the trigger will be. So the only thing to do is to be prepared. More →
Introduction
If you’re a value investor or have been invested in a value fund, you probably aren’t the happiest investor in the world right now. More →
Introduction
Many will say that a portfolio owned by an investor who is about to retire or is retired should be a defensive one. However, I find focusing on age isn’t smart because no matter our age, we have to always protect our portfolio and try to maximize returns. After all, isn’t the first rule of investing to never lose money while the second rule of investing tells us to read rule number one again? More →
When the market reaches extreme levels—to either the upside or the downside—it’s pretty normal to see conditions generally start to become more volatile. With the market at historical highs, investors start to become more and more nervous about whether staying in the market exposes them to more risk, or whether taking profits now would mean leaving money on the table when the market surges to yet another historical high. A similar kind of uncertainty happens at or near market bottoms, as speculation centers around whether the market has dropped enough for investors to start buying obvious bargains or whether there is still even more downside to be avoided. More →
Introduction
What’s equally important to how much you expect to make from your investments if things go well is the question of how much volatility you can take if things go wrong. Today’s article is more of a reminder that there are two sides to each investment, the return side and the risk side.
I’ll elaborate on techniques that will help you assess your future returns and risks. We’ll start with the fun part, the returns, and finish with the necessary part, the risks. More →