WEALTHTRACK

For financial historians and serious market observers, the current era has all the signs of a developing market bubble.  Money is abundant, a wide range of financial assets have risen to record or near-record levels, and enormous amounts of money are flowing into stocks. Private equity funds are flourishing and bonds continue to attract huge sums.   Demand for residential real estate is...

How strong and lasting is the current rebound we are seeing in the economy? What about the resurgence in inflation? Those are major debates raging on Wall Street right now.   This week’s WEALTHTRACK guest is looking beyond the current rebound and focusing on what he sees as massive problems which will act as drags on recovery.  Robert Kessler, Founder, and CEO of Kessler Investment Advis...

The consensus for the economy is bullish. After a 6.4% annualized increase in real GDP, that’s without inflation, in the first quarter, recent forecasts are for 10% GDP growth in the second quarter, 7.5% in the 3rd, and 5% in the fourth.  As for inflation expectations, they are up. Again the consensus is that the combination of a rapidly rebounding economy, supply shortages, and tight labor m...

Times they are a-changin'…  With COVID vaccinations becoming widespread, savings rates high, and consumers ready to spend, the economy is reopening and rebounding with gusto.  All of these developments are creating new opportunities and challenges for bond investors.  Bond prices fall when interest rates rise and vice versa. After a 40-year bull market in bonds, with interest rates...

“Jack be nimble Jack be quick” isn't a concept one usually associates with long-term value investors but sometimes extraordinary times call for exceptional responses. The first quarter of 2020 was one such event for this week’s guest.  Steven Romick, who has appeared on WEALTHTRACK since our launch in 2005 rarely does television interviews which is one of the many reasons we are delighted to...

There is a rule of thumb on Wall Street that when a fund knocks it out of the park in any given year or has an exceptional winning streak for a couple of years it is bound to fall to earth sooner rather than later and lag the market, its peers, or both for several years. It's called reversion to the mean. With few exceptions, this week’s guest has been in the winning streak category for a while. H...

The shift from COVID lockdown to COVID reopening has been stunning. Depending upon the stage of reopening economies around the world are rebounding. The markets’ response has been swift and dramatic particularly in the U.S. So what do you do if you are running a highly concentrated, large-cap growth fund? That is the challenge facing this week’s guest. Damon Ficklin is head of the Large Company Gr...

Beware the headline makers! According to Wall Street lore when a financial asset hits the front pages it can signal a turning point, either a recovery if negative, or a fall if positive. What’s making headlines today? Bitcoin and other cryptocurrency-related investments, including dogecoin, a meme-inspired cryptocurrency created as a joke in 2013. “This is absurd,” said Billy Markus, the co-creato...

Have you noticed how rampant speculation is? Random investors seem to be making money hand over fist in numerous assets: disruptive companies like Tesla, whose stock has soared 600% in the last 12 months. Old economy stocks like video retailer GameStop up nearly 6,000% propelled by traders on commission-free trading platforms like Robinhood.  These are not isolated events. The zeitgeist is be...

We have been living through an extraordinary period. It was a year ago that COVID was recognized as a global pandemic and since then over 100 million people have been stricken and more than 2 million have died.  Economies were locked down causing severe recessions. Central banks and governments responded with unprecedented amounts of monetary and fiscal stimulus. A worldwide effort by pharmac...

When a fringe economic theory goes mainstream and is actually implemented by policymakers you better pay attention. The once-fringe theory in question is called Modern Monetary Theory, or MMT for short.  The assumption behind MMT is that massive government spending helps the economy grow to its full potential, including full employment, and also finance major programs like universal healthcar...

It doesn’t take a rocket scientist to figure out that 2021 is a year of significant political and macroeconomic change. Meanwhile, the rollout of COVID vaccines is starting to unleash a year’s worth of pent-up consumer and business demand.  That demand is also putting upward pressure on prices and inflation expectations. Those pressures are showing up in the bond market where yields on long-t...

Part 2 of 2 John Rekenthaler has been tracking mutual funds at Morningstar since 1988.  He correctly predicted early on that index funds would surpass actively managed funds. Now he sees a similar trend for ETFs as they attract record amounts of cash and mutual funds suffer outflows.  WEALTHTRACK #1737 published on March 11, 2021 More info: https://wealthtrack.com/morningstars-john-reken...

John Rekenthaler, Vice President of Research at Morningstar and author of the twice-weekly “Rekenthaler Report” analyzes the influence of the online investment communities that have driven GameStop’s meteoric rise and stunning declines. Rekenthaler says their influence is here to stay, at least until regulators get involved.  WEALTHTRACK #1736 published on March 05, 2021 More info: https://we...

The balance sheet of the Federal Reserve continues to surge at an unprecedented rate, up 83% y/y to a historic level, $7.59 trillion at the latest count. According to our WEALTHTRACK podcast guest, financial historian, and long-time market observer James Grant , interest rates, the “central pricing mechanism for financial markets” have been pushed to artificially low levels by the Fed’s policies w...

Part 2 of 2 Old fashioned asset allocation used to be a fairly simple exercise: 60% individual stocks, usually U.S. large-caps and 40% bonds, mostly investment-grade corporates, some Treasury securities for liquidity, and a smattering of municipal bonds for higher tax bracket individuals.    Today it's a whole different ball game, juggling multiple global asset classes, using complex com...

Part 1 of 2:  Talk to most investment professionals and they will tell you that portfolio diversification is the key to successful investing and that asset allocation among multiple asset classes, not individual security selection, accounts for as much as 100% of investment returns. Being broadly diversified among different asset classes is supposed to give you strong exposure to market ralli...

One of the most notable characteristics of the last decade was the wide divergence in market performance. We have reported many times on the narrow group of superstars, mainly large-cap U.S. tech stocks and the much wider universe of laggards, value and small-cap stocks in particular.  In 2020 that divergence blew up.  Small-cap went from worst to first. The year began disastrously. &nbs...

Blast off! Stock markets are setting records, with tech stocks leading the charge once again. “Don’t fight the Fed” should now encompass “don’t fight the Treasury, fiscal stimulus, vaccinations and investor demand for ‘real’ (after inflation) returns.” The Wall Street Journal reports that the “S&P 500 rose 14.3% from Election Day through Inauguration Day, its best performance on record for tha...

COVID-19 has affected just about every aspect of our professional and personal lives, including the state of our finances. Whether you or a loved one are among the more than 20 million Americans who lost their jobs in the spring of 2020 in the depths of the lockdowns, or one of the millions of Americans who saw their retirement portfolios plunge in the shortest bear market on record in February an...

We have a special treat for you. Robert Shiller, a Nobel Prize-winning economist , a pioneer in the field of behavioral finance, long-time Yale professor, financial innovator, and prolific author. Shiller is also the co-creator of the widely cited gauge of U.S. housing prices, the Case-Shiller Home Price Index, and creator of the cyclically adjusted PE ratio known as the Cape Ratio which is a pric...

This week, in part 2 he will share his fifty years of economic perspective on the extraordinary events of 2020 and how the pandemic has changed the economy and markets. It will be a fascinating conversation with one of the best business cycle analysts of our era.      Every year at around this time we sit down for an in-depth interview with legendary economist Ed Hyman.  H...

It's an annual tradition on WEALTHTRACK to sit down for a rare in-depth interview with Ed Hyman, Wall Street’s number one-ranked economist for an unrivaled forty years!  Hyman is a Wall Street legend. His ability to gather reams of economic data, including proprietary information from many sources including his weekly company surveys of industries ranging from retailers to restaurants, to hom...

According to Medicare benefits expert, Dr. Katy Votava COVID-19 has altered several aspects of Medicare coverage and procedures. She will tell us what’s different and how to take advantage of the changes. She will also help us meet the deadline for Medicare’s annual enrollment period which ends on December 7th and allows medicare beneficiaries to evaluate their Medicare Advantage Plans and part D,...

Can investing be simple? Can we stop worrying about what’s happening on Wall Street, in Washington, with Fed policy, inflation, corporate earnings, and numerous other headline-making concerns? Can we just get on with our lives and still invest successfully?  According to this week’s guest, the answer is yes, and we shouldn’t even care what the market is doing.   What should we care about...