Publications

  •   The London Interbank Offered Rate (LIBOR) began when banks realized they needed a consistent benchmark to reflect the cost to borrow on an unsecured basis in “wholesale” markets, for bank-to-bank services. Today LIBOR is the most widely used interest rate benchmark in the world and determines the interest rate on a range of financial instruments including mortgages, student loans, government loans, and currency swaps, among others. LIBOR is calculated and published daily across five...
    Post date: 08/07/2019 - 5:44pm
    Category: White Papers
  •   “If the flap of a butterfly’s wings can be instrumental in generating a tornado, it can equally well be instrumental in preventing a tornado.” -Edward Lorenz Interesting to consider, no? Pop culture is very familiar with the adage about a butterfly’s wings flapping in one part of the world ultimately causing a tornado in a completely different part. We often interpret this on a kind of karmic scale, considering the far-reaching consequences of seemingly insignificant actions. However,...
    Post date: 08/05/2019 - 11:24am
    Category: White Papers
  •   PART I: WHAT IS SOCIAL SECURITY AND HOW DOES IT WORK? Established in 1935 by President Franklin D. Roosevelt’s New Deal, Social Security is a comprehensive federal program designed to provide American workers and their dependents retirement income, disability income, survivorship payments, and death benefits. The Social Security system is one of the world’s largest government run programs, paying hundreds of billions of dollars per year in benefits to retirees across the country. The system...
    Post date: 07/29/2019 - 10:57am
    Category: White Papers
  • About mid-June I received an interesting question from a colleague at Howe & Rusling—one that probably could have come at any point over the past few months, but with the end of the quarter looming, it seemed the perfect time. Retail sales growth picked back up. GDP printed over 3% in the first quarter and was expected to be at least as strong in the second quarter. The employment rate is sitting at generational lows and there are still roughly 1.6 million more job openings than there are...
    Post date: 07/16/2019 - 9:54am
    Category: Our Perspective
  • In reversing some of the steadier seas seen in the first quarter, the second quarter of 2019 marked a return to a volatile environment more closely resembling the tail end of 2018. Despite a peak-to-trough decline in the S&P 500 in May (by about 7%), little changed in aggregate as markets subsequently recovered and ended the quarter up just under 4%. Energy was the only sector to experience a negative return, down almost 4% on the back of oil prices that were down low single digits for the...
    Post date: 07/16/2019 - 9:46am
    Category: Our Perspective
  • The fixed income markets certainly started off 2019 on the right foot. To use an old saying generally reserved for the month of March (though this is a quarterly commentary), the first quarter came in like a lion. The first two weeks of 2019 saw 10-year Treasury yields jump by over 20 basis points. And the first quarter went out… like a lion. Following the volatility that we saw in the last quarter of 2018 in risk assets (equities and non-Treasury securities) and the resulting flight to...
    Post date: 04/16/2019 - 2:59pm
    Category: Our Perspective
  • The first quarter of 2019 was certainly easier to stomach than the one prior in which we experienced a dramatic sell-off to finish 2018. Refreshingly, the S&P 500 Index finished the first quarter up over 13%, recouping nearly all of its losses from the fourth quarter (although it hasn’t quite cut through its 2018 high of 2929.67). This was actually the market’s best start to a year since 1998—and every sector brought in positive returns. Market performance is just one piece of the puzzle,...
    Post date: 04/16/2019 - 2:51pm
    Category: Our Perspective
  • The four most powerful words in the universe of bonds are “full faith and credit.” These words apply to government Treasury bills, notes, and bonds whose timely interest and principal payments are backed by an unconditional guarantee from the United States Government. Since Treasury securities are backed by the full faith and credit of the government, they are referred to as “risk free” securities. The government cannot default on its obligations, as it has the power to levy taxes or print...
    Post date: 03/08/2019 - 6:19pm
    Category: White Papers
  • And good riddance to what turned out to be a very difficult year for the markets and investors. There was essentially nowhere to hide. Of the 15 major asset classes (everything from US large caps to emerging market stocks to high yield bonds to gold), US cash equivalents was the only one to finish the year with positive returns. Likewise, the 25 largest equity ETFs were all down for the year, with almost half of the funds down double digits. Only 3 of 48 country ETFs posted positive returns...
    Post date: 01/15/2019 - 4:11pm
    Category: Our Perspective
  • What a way to end a year. As the third quarter was ending, it seemed everyone was expecting yields to continue the slow ascent for the final three months of 2018. The Federal Reserve had just raised the overnight fed funds rate for the third time in September and a rate hike at their final meeting in December was all but a certainty. Bond investors were also thinking about and planning for further rate increases in 2019. That lasted for a few weeks into the fourth quarter, but as it turned out...
    Post date: 01/15/2019 - 3:53pm
    Category: Our Perspective

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