Our Market Commentary

Join The WealthPlan team as we explore topics around investments, practice management, advisor technology, and more.

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Long Term US Equity Returns: Why Active Management is Difficult (Part One)

In these pages we typically reference the S&P 500 Index because it is a widely used and well-known index. In this and following notes, however, we are going to use the suite of Russell US Indices because of their elegant design and formulation and the resultant insights that can be brought forth from them. To…

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Pause, Reversal, or the Beginning of a New Trend?

The degree to which stock market returns since the 2022 market lows have been dominated by a narrow group of large cap tech stocks receives a lot of attention in the financial media. This coverage is justified, because the degree to which index returns have been dominated by these companies is overwhelming. To put it…

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Data Dependent

The market is now placing nearly a 100% probability on a September rate cut based on Powell’s recent comments on inflation progress. We will learn more from Powell after the Fed’s July 30-31 meeting comments. As of today, we’re asking the question: might this expectation be too optimistic? Powell has made it abundantly clear that…

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How to manage money in an uncertain world

The capital markets are inherently uncertain. We financial and investments practitioners engage in all kinds of research, analysis and innovation to help manage this uncertainty. And the industry has made massive strides in creating a framework for understanding better the drivers of uncertainty and for managing the potential for bad outcomes within our clients’ portfolios.…

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Alternative Investments: What they are and how WealthPlan approaches them

Alternative Investments is a catch all phrase to capture any investment that does not fall under the broad category of publicly listed stocks and bonds, or registered funds containing stocks and bonds. If you ask a hundred people what an alternative investment is, you probably get a hundred different answers. The reason is that “Alternatives”…

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Playing the Players

Early on in my investment management research career, which I began in 1992, I met a veteran trader who’d been in the business for several decades by the time I met with him in the mid 1990’s. You meet all kinds of people in this career. Most are highly educated from elite universities, but some…

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Perspective: countervailing short-term and narrow thinking

When it comes to investing, we sometimes get so caught up in the short-term and in the minutiae, that we lose sight of the most important thing that stocks, as an asset class, accomplish for investors—building long-term wealth. Examples of such “short-termism” and narrow thinking are captured in questions like these: How did stock X…

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The Yield Curve: A primer and the current inversion

The yield curve, also known as the term structure of interest rates, is an important reading on economic health. Think of it as something akin to your resting heart rate or blood pressure readings. Just as your resting heart rate or blood pressure can be an important indicator for your future medical health, the yield…

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Corporate Earnings: Growth and Optimism amid the AI revolution

We hear so much in the financial media about inflation, slowing economic output, and the Fed’s inflation fighting efforts, that it’s easy for people to become overly pessimistic. We are even hearing about the threat of the 1970’s bugaboo “stagflation.”  While it is true that we still have persistent inflation and economic growth isn’t as…

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Pullback or Something More?

This current market sell off is the first material pullback in the US stock market since it began advancing in the Fall of 2023. You can see from the chart below, until the recent pullback, the stock market, as measured by the S&P 500 Index, was on a tear. The recent sell-off has taken the…

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Inflation dynamics in one chart

Last week inflation was updated for the month of March. In short, inflation progress has stalled both on the Consumer Price Index (CPI) and the Producer Price Index (PPI). We’ve been saying that inflation is primarily a consequence of money supply and policies that affect money supply. The chart below shows three series: 1) the…

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Competing Policies and Forces

We’ve dedicated a considerable amount of attention within our weekly written missives addressing inflation. Of late, inflation has stalled even while Federal Reserve policies remain restrictive. Here’s what the two Fed tools of interest rates and balance sheet assets looks like: As can be seen, the Fed has been forceful and relentless in its pursuit…