Bob's Journal
Found 587 Articles.
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Understanding Market Indexes
Index investing often is called passive investing, but it is far from passive. An index is not “the market,” as many people believe. Instead, people construct the indexes. Sometimes the index creators are trying to develop a subset of stocks that they believe best reflects the total market. Other times they’re trying to develop an […]
Talking About Market Bubbles
When will this market bubble finally burst? The question is asked a lot lately. Market indexes set a lot of records during the last couple of years, with the latest being the Dow Jones Industrial Average closing above 22,000. Some analysts believe the entire market is in a bubble, while others say that only stocks, […]
Second-Half of 2017 Starts with a Rally
Monday’s market close marked the end of the first seven months of the year, and it’s interesting to compare the results so far with what people expected at the start of the year. At the start of the year, many investors and analysts were sold on the notion of the so-called “Trump Trade.” Deregulation and […]
It Is All about the Earnings
Rising earnings are boosting stock prices. Until recently, central banks (especially the Federal Reserve) were prime movers of the markets. Quantitative easing was designed largely to increase stock prices by pushing money into the markets, and it largely had that effect. But the Fed has been reducing its role since 2014. That pushes earnings and […]
The Fed Still Doesn’t Need to Worry About Inflation
Many analysts and investors misunderstand inflation, and that’s caused them to misjudge markets the last few years. Most people believe that a lot of money printing by the central bank always leads to a lot of inflation. I remember making an investment presentation to a local group a year or so after the financial crisis. […]
The Second Quarter and First Half in Perspective
Most investors and media focus on U.S. stocks but that is not where the important action has been this year. We wrapped up the second quarter of the year on June 30 and stocks did well across the board for the month, the second quarter and the first half of 2017. As seems to have […]
European Central Bankers Rattle the Markets
Do you remember the Taper Tantrum? Europe had its own version this week. Back in 2013, Fed Chairman Ben Bernanke caused a panic when he casually stated in a congressional hearing that at some point the Fed would stop its quantitative easing and reduce the assets on its balance sheet. Many investors thought the change […]
The Next Bear Market
It is time to plan for the next bear market and recession. I’m not predicting that either is imminent. In fact, the reliable lead indicators of recessions aren’t issuing any warning signs yet. The best time to plan for bear markets and recessions is when they don’t seem to be on the horizon. Most people […]
