Ever since the crisis of 2008 the Fed had been utilizing what’s been called “quantitative easing” to focus on commercial banks to stimulate the economy. This approach involved purchasing a significant volume of bonds to drive up bond prices and reduce interest rates, with the expectation that the lower rates would stimulate demand for more…
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In the past two months we’ve experienced one of the most volatile starts to a new investment year in history. Surely there must be a good reason why this is occurring.  Is it a harbinger of a severe economic downturn?  Recognition that stocks have been overvalued for years?  A response to the fact that Donald…
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As stock prices continue to fall across the globe, you will inevitably be hearing the term “bear market” bandied about in the media. While the definition is vague, as is its etymology, broadly speaking the term signifies a general decline in the stock market over a period of time, coupled with a transition from high…
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Now that the capital markets have once again begun exhibiting a level of volatility not seen for a number of years, it’s appropriate to revisit the relationship between risk and return. Wesley Gray, CEO of Alpha Architect, a Pennsylvania investment advisory firm, has come up with an interesting thought experiment that brings this relationship into…
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One of Benjamin Franklin’s well-known aphorisms is, “An ounce of prevention is worth a pound of cure.” Could this apply to the world of investing as well?  Yes, as it turns out. I’ve written before on the topic of volatility drag (see https://www.cognizantwealth.com/2012/05/15/volatility-is-a-drag/) which causes an investment whose return is constantly fluctuating between positive and…
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