tactical investment

The U.S. economy is clearly slowing down – real growth was only 1.1% (annual rate) in the second quarter of 2016. Real (net of inflation) growth in gross domestic product is the broadest measure of the health of our economy, and is the main driver of income and employment growth.

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With the Q2 earnings reporting season drawing to a close, the S&P 500 operating earnings continue to decline. Growth currently stands at -3.5% year-over-year, according to Factset.  Companies beat their carefully-designed targets by a margin that’s consistent with the historical average, 3% to 4%. When Q2 earnings are fully reported, I

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Roman Chuyan, CFA July 18, 2016 The Federal Reserve has been trying to boost inflation since the financial crisis, and inflation finally did begin to rise this year. In fact, core (excluding food and energy) consumer price index inflation was at 2.2% in June (the orange line on the chart

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On June 23rd, the citizens on the United Kingdom voted decisively (51.9%) to leave the European Union, despite a campaign to remain in the EU led by the UK’s top politicians.  Markets reacted sharply to the news: the pound sterling lost about 10% and is trading near its lowest level in

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Roman Chuyan, CFA June 24, 2016 Yesterday, the citizens on the United Kingdom voted decisively (51.9%) to leave the European Union, despite a campaign to remain in the EU led by the UK’s top politicians including Prime Minister David Cameron.  Markets reacted sharply to the news: the pound sterling lost about

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Roman Chuyan, CFA June 10, 2016 After a seven-year bull run, stock market valuation reached its highest level since 2000. Then, corporate earnings began to decline in 2015 and U.S. economic fundamentals deteriorated this year. Under these conditions, we would normally expect a stock market correction, or worse. Yet, stocks continue

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Roman Chuyan, CFA June 1, 2016 Central banks’ monetary policies – zero or negative interest rates and bond purchases – are losing their effectiveness. Earlier this year, the G-20 country leaders stated that “monetary policy alone cannot lead to balanced growth” and advocated that governments add fiscal stimulus. It was followed by similar

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Roman Chuyan, CFA May 5, 2016 “If many remedies are prescribed for an illness, you may be certain that the illness has no cure.” ~ Anton Chekhov, The Cherry Orchard Most observers agree (at least, those whose experience spans a complete market cycle) that the equity market is overextended. Market

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