Will the S&P Fall to 400?

By 2 Cents on May 30th, 2011 | Category: Investing | 10 comments
falling-stock-market

The future is an opaque mirror. Anyone who tries to look into it sees nothing but the dim outlines of an old and worried face.

~Jim Bishop

Most people would agree that it’s pure folly to try to predict the future – especially that of the financial markets. And yet we don’t want to invest blindly either. We need to have at least some concept of where we’re at in the economic and market cycle, as well as the future prospects and valuation metrics for any company we may choose to buy.

Every investment decision is a bet on the direction of a given company, sector, or index. I know some passive investors out there don’t think they’re making market calls, but buying any financial instrument is a wager it will be worth more by the time we sell it. Otherwise, why buy it in the first place?

[...]

Read on and enjoy … Will the S&P Fall to 400?

Category: Investing | Tags: , , , |

End of QE2 Marks D-Day for the Markets: Bill Gross

By 2 Cents on March 4th, 2011 | Category: Investing | 9 comments
End of QE2 Is D-Day for the Markets

Because quantitative easing has affected all risk spreads, the withdrawal of nearly $1.5 trillion in annualized check writing may have dramatic consequences.

~ Bill Gross

The Ides of March will soon be upon us, but it’s not the 15th of this month that has PIMCO’s Bill Gross a little concerned. He’s more worried about June 30th, the date on which the Federal Reserve’s latest Quantitative Easing program is set to end. His latest Investment Outlook extends the concerns about U.S. Treasuries which he outlined in last month’s missive.

Gross, like many others, has been a critic of the Fed’s Quantitative Easing programs, wondering “whether [they] actually heal, as opposed to cover up, symptoms of an unhealthy economy.” Among a couple of other factors, its success, according to Gross, depends on “the willingness of creditors to believe in future real growth as a [...]

Read on and enjoy … End of QE2 Marks D-Day for the Markets: Bill Gross

Category: Investing | Tags: , , , |

Interest Rates: 2010 Mid-Year Review

By 2 Cents on June 30th, 2010 | Category: Investing | 7 comments

It’s better to stir up a question without deciding it, than to decide it without stirring it up.

~ Joseph Joubert

Update: This article was included in the Carnival of Financial Planning #150 posted at Military Finance. Thank you!

I’m going to try to raise some of the key issues that might affect interest rates over the second half of 2010 and beyond. Like most of the economic and market analysis we undertake here, these will just be the observations of an interested amateur. They are designed to be food for thought, and not definitive investing advice.

Interest Rate Drivers

On Monday we looked at inflation and deflation. Getting the call on that debate right will likely determine the relative success of any portfolio over the next decade or so. It will also have a profound effect on interest rates. [...]

Read on and enjoy … Interest Rates: 2010 Mid-Year Review

Category: Investing | Tags: , , , , , |