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October 16, 2017

The Markets

There’s a new kid in town: narrative economics.

Last week, Richard Thaler was awarded the Nobel Prize in economics. His work in behavioral economics and finance recognizes not all economic and financial decisions are made after rational reflection. In Nudge, he wrote:

“The workings of the human brain are more than a bit befuddling. How can we be so ingenious at some tasks and so clueless at others?…Many psychologists and neuroscientists have been converging on a description of the brain’s functioning that helps us make sense of these seeming contradictions. The approach involves a distinction between two kinds of thinking, one that is intuitive and automatic, and another that is reflective and rational.”

Yale professor Robert Shiller, another Nobel laureate in economics, is exploring a field of study related to Thaler’s. It’s called narrative economics. Narratives are the stories we share with each other. They are fuel for conversation and popular narratives often become viral. During a presentation at the University of Chicago, Schiller explained narrative economics is “the study of the spread and dynamics of popular narratives, the stories, particularly those of human interest and emotion, and how these change through time, to understand economic fluctuations.”

Today, a popular narrative in financial circles focuses on Professor Shiller’s cyclically-adjusted price-earnings (CAPE) ratio, which suggests the market may be overvalued. Barron’s reported, “The CAPE, which is based on average inflation-adjusted earnings over the trailing 10 years, stands at 31, versus 32.5 in 1929 and 44 in late 1999.”

If stocks are overvalued, why do investors keep buying shares? It’s a question narrative economics hopes to help answer in the future.

 

SELF-DRIVING CARS, LIFE-LIKE ROBOTS, ARTIFICIAL INTELLIGENCE, AND VIDEO PHONES. Millennials and members of Gen Z may find the original Blade Runner movie a bit dated. After all, many of the tech innovations imagined have become a part of our daily lives and others, like mood organs, are in the works.

Mood organs were among the human enhancements imagined by Philip Dick in Do Androids Dream of Electric Sheep? (The book upon which Blade Runner was based.) A recent c|net.com article explained:

“Dick doesn’t describe the design of the mood organ or how it works, only specifying that it can stimulate or sedate the user’s cerebral cortex. Users simply dial up the emotion they want, such as 481 (awareness of the manifold possibilities open in the future) or 594 (pleased acknowledgement of a spouse’s superior wisdom).”

Neural implants are a reality already, although they’re not used to control human emotion. Thousands of people with Parkinson’s have implants to manage tremors and applications to help with epilepsy and depression are being explored, according to IEEE Spectrum.

Medical treatments are not the only applications for neural implants. Elon Musk is developing ‘neural lace,’ a brain-computer interface (BCI) that may be injected into the human body, travel through the bloodstream, and settle over the cerebral cortex. While neural lace someday may be used to treat or diagnose neurological issues, The Economist reports Mr. Musk has argued, “human beings need to embrace brain implants to stay relevant in a world which, he believes, will soon be dominated by artificial intelligence.” 

Musk is not the only entrepreneur pursuing brain interfaces. IEEE Spectrum reported Mary Lou Jepsen, an MIT alumnus and tech executive, has founded a company which is working on non-invasive BCIs “for imaging and telepathy (the latter could conceivably be done by reading out thought patterns in the brain).”

It’s possible the idea of humans with superpowers may seem quaint to future generations.

 

Weekly Focus – Think About It

“The real question is, when will we draft an artificial intelligence bill of rights? What will that consist of? And who will get to decide that?”
–Gray Scott, Futurist philosopher

* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.

 Sources:
https://www.forbes.com/sites/frankarmstrong/2017/10/13/richard-thaler-a-giant-in-economics-awarded-the-nobel-prize/#7080f263a107
https://www.amazon.com/dp/014311526X/ref=rdr_ext_tmb (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-16-17_Nudge-Improving_Decisions_About_Health_Wealth_and_Happiness-Footnote_2.pdf)
https://www.uofcbusinessjournal.com/single-post/2017/02/26/With-Narrative-Economics-Shiller-Seeks-to-Broadens-the-Scope-of-Economic-Analysis
http://www.barrons.com/articles/who-says-this-stock-market-is-overpriced-1507956689?mod=trending_now_3 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-16-17_Barrons-Who_Says_this_Stock_Market_is_Overpriced-Footnote_4.pdf)
https://www.cnet.com/news/blade-runner-future-technology-ridley-scott/
https://spectrum.ieee.org/the-human-os/biomedical/devices/5-neuroscience-experts-weigh-in-on-elon-musks-mysterious-neural-lace-company
https://www.economist.com/news/science-and-technology/21719774-do-human-beings-need-embrace-brain-implants-stay-relevant-elon-musk-enters (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-16-17_TheEconomist-Elon_Musk_Enters_the_World_of_Brain-Computer_Interfaces-Footnote_7.pdf)
https://www.brainyquote.com/quotes/quotes/g/grayscott776538.html

 

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October 9, 2017

The Markets 

Slow and steady… 

It has been 332 days since the Standard & Poor’s 500 (S&P 500) Index experienced a 5 percent drop, reported Barron’s. If there isn’t a selloff on Monday or Tuesday, this will become the longest rally without such a drop.

During this period, the Index has gained 33 percent. Think about that for a moment: 33 percent over 332 days. By Barron’s calculations, the market has gained less than 0.1 percent per day. That’s a very slow rate of increase, relatively speaking. The longest-ever rally without a 5 percent drop, which began in November 1994, was accompanied by a gain of 56 percent or 0.17 percent per day.

The most recent issue of The Economist pondered the phenomenon of the slow-as-molasses bull market that has pushed asset prices higher:

“No one would mistake the bloodless run-up in global stock markets, credit, and property over the past eight years for a reprise of the ‘roaring 20s,’ or even an echo of the dotcom mania of the late 1990s. Yet only at the peak of those two bubbles has America’s S&P 500 been higher as a multiple of earnings measured over a ten-year cycle. Rarely have creditors demanded so little insurance against default, even on the riskiest ‘junk’ bonds. And rarely have property prices around the world towered so high…the world is in the throes of a bull market in everything.”

It would be a mistake to assume asset prices will continue to move higher indefinitely. One characteristic that may signal the onset of a bear market is investor euphoria, and we haven’t seen that. The most recent American Association of Individual Investors’ Sentiment Survey showed 2.3 percent more investors were bullish last week, pushing the total to 35.6 percent. That’s still well below the historic average of 38.5 percent.

Last week was punctuated by a senseless shooting. Our hearts and prayers are with the people of Las Vegas.

 

ZOMBIE TOURISM AND ZOMBIE COMPANIES. Zombies have a special place in the heart of pop culture. The undead are pivotal characters in books, movies, games, and television shows. The practical can read The Zombie Survival Guide. Thrill seekers can binge on The Walking Dead. Romantics have Pride and Prejudice and Zombies. Anyone looking for a laugh can watch Shaun of the Dead or Zombieland.

If you’re one of those people who just can’t get enough of roamers, rotters, biters, and crawlers, you’re in for a treat: zombie tourism. National Geographic has identified several travel destinations that are steeped in zombie legend:

1. Haiti. American zombie culture appears to have origins in Haiti, where slaves believed death would reunite them with their gods and homelands. The exception was suicide. If slaves took their own lives, they “would be forced to remain in their bodies, soulless, and continue to work the plantations.”

2. Greece. In Greece and elsewhere, folklore historians have found anyone who died of plague or was cursed, murdered, or born on an inauspicious day, could potentially rise from the dead. Some archeology digs have found graves with skeletons weighted by rocks or millstones.

3. Georgia (in Europe). You won’t find any zombies here – and that’s the point. Apparently, Georgia boasts some of the world’s most promising zombie-proof dwellings. The village of Chazhashi, at the confluence of the lnguri and Black Rivers, has more than 200 nearly impenetrable medieval tower houses.

Zombies aren’t always undead humans. There are zombie companies, too. A zombie company is debt-laden and on the edge of bankruptcy. In fact, the Organization for Economic Co-operation and Development (OECD) thinks zombie firms may be one reason economic growth has been so slow. The Economist reported:

“We know that a few companies are still producing substantial productivity gains but it may be that monetary policy, by keeping rates low, has stymied the forces of creative destruction; ‘zombie’ companies have been kept alive, dragging down the productivity numbers. Whatever the reason, economic growth won’t rebound until productivity perks up.”

Perhaps National Geographic should add some quarterly earnings calls to its zombie tourism list.

Weekly Focus – Think About It 

“Fear is the main source of superstition, and one of the main sources of cruelty. To conquer fear is the beginning of wisdom.”

–Bertrand Russell, British philosopher

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.

 Sources:
http://www.barrons.com/articles/stocks-hit-new-highs-as-the-bull-trots-steadily-on-1507344223 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-09-17_Barrons-Stocks_Hit_New_Highs_as_the_Bull_Trots_Steadily_On-Footnote_1.pdf)
https://www.economist.com/news/leaders/21730019-ultra-loose-monetary-policy-coming-end-it-best-tread-carefully-asset-prices-are (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-09-17_TheEconomist-Asset_Prices_are_High_Across_the_Board-Is_it_Time_to_Worry-Footnote_2.pdf)
http://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
http://www.aaii.com/sentimentsurvey
http://www.nationalgeographic.com/travel/features/tour-sites-zombie-undead-walking-dead-obsessed/
https://www.livescience.com/51335-greek-undead-spirits.html
http://whc.unesco.org/en/list/709
http://www.investopedia.com/terms/z/zombies.asp
https://www.economist.com/blogs/buttonwood/2017/01/light-bulb-moment (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-09-17_TheEconomist-The_Curious_Case_of_Missing_Global_Productivity_Growth-Footnote_9.pdf)
https://www.positivityblog.com/22-inspirational-quotes-on-fear/

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October 2, 2017

The Markets

A lot happened during the third quarter of 2017, but not much changed.

The bull market in U.S. stocks continued to charge ahead. Traditional measures of valuation continued to suggest the market is overvalued, but some analysts argued it’s different this time. The Economist explained:

“The current [cyclically-adjusted price-to-earnings] ratio of 31 suggests that stocks are about 50% over-valued – a figure that has only been exceeded in the past 60 years during the dot-com bubble. Bulls argue that the S&P 500’s constituents can justify this heady valuation. Big American companies are wielding increased market power, enabling them to earn outsized profits at the expense of America’s customers.”

The bull market in U.S. bonds continued. Interest rates on 10-year Treasury bonds were lower at the end of September than they were at the start of the year, despite the Federal Reserve increasing rates in March and June. The Fed also has indicated it will soon begin to unwind its balance sheet, which includes about $4.5 trillion in Treasury bonds, mortgage-backed securities, and government agency debt.

Geopolitical tensions remained high, but investors were impervious to the potential effect of various conflicts on stock and bond markets. In August, Barron’s wrote:

“The biggest surprise of 2017 remains that geopolitical risk continues to not matter. Until Monday, North Korea’s nuclear missile program had again faded into the background as just another high impact/low probability risk with no discernible effect on market sentiment. Brexit, the changes in leadership roles in China after the 19th National People’s Congress, the possibility of a United States-China trade war, and the unpredictable nature of the Trump presidency are not weighing on stocks.”

The CBOE Volatility Index (VIX) keeps plumbing historic lows. The VIX reflects investors’ expectations for market volatility in coming months. The lower the Index reading, the lower volatility expectations are. The historic average for the VIX is about 19.

During 2017, the number of days on which the VIX finished below 10 – suggesting investors are exceptionally calm – increased significantly. In early June, the VIX had closed below 10 just 14 times since 1990. Six of those closes had occurred in 2017. By the end of September, the VIX had closed below 10 on 32 days since 1990 and 24 times in 2017.

We’re still waiting for inflation to move higher. At the end of the quarter, inflation appeared to be heading the wrong way. The core Personal Consumption Expenditures (PCE) index, which is the Federal Reserve’s favorite measure of inflation, came in at 1.3 percent, year-over-year. That’s its lowest level since October 2015, reported Barron’s. The Fed’s goal is to have inflation at 2 percent. It has raised rates during 2017 in anticipation of higher inflation rates, but those higher rates have yet to materialize.

 

THE CASE OF THE SWIRLING EUROS. In mid-September, local authorities in Geneva, Switzerland were investigating an unexpected deposit. Reuters reported:

“…the first blockage occurred in the toilet serving the vault at [a] bank…in Geneva’s financial district, and three nearby bistros found their facilities bunged up with 500-euro notes a few days later…The cash was confiscated during the investigation and it was unclear who would get it if it was found to be lawful. There was no immediate reason to think it was dirty money…”

Whoever was responsible for flushing about $100,000 worth of 500-euro bills may have jumped the gun. The €500 note will be discontinued by the European Central Bank because authorities suspect it has been used to facilitate illegal activities, but production continues until the end of 2018.

The perpetrator hasn’t committed a crime, reported Bloomberg. While it’s illegal to mutilate or deface bills in the United States, that’s not the case in Switzerland. The European Commission isn’t concerned when small amounts of euro are damaged. Its rules for legal tender state:

“The destruction of small quantities of euro banknotes or coins by an individual should neither be prohibited nor penalized. The justification for the non-prohibition is the fact that the lawful owner of a banknote should be able to do what he/she wants with his/her own good as long as there is no impact on third parties.”

Why investigate if there is no crime? There’s nothing like a good mystery to occupy the mind!

Weekly Focus – Think About It

“The problem with putting two and two together is that sometimes you get four, and sometimes you get twenty-two.”
–Dashiell Hammett, American author

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.

Sources:
https://www.economist.com/blogs/graphicdetail/2017/09/daily-chart-10?zid=295&ah=0bca374e65f2354d553956ea65f756e0 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-02-17_TheEconomist-The_S%26P_500_Breaks_Another_Record-Footnote_1.pdf)
https://www.cnbc.com/2017/06/14/interest-rates-addressed-at-fed-meeting-with-janet-yellen.html
https://finance.yahoo.com/quote/^TNX/history?period1=1483250400&period2=1506661200&interval=1d&filter=history&frequency=1d
http://www.barrons.com/articles/whats-driving-asias-stock-market-rally-1504227382 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-02-17_Barrons-Whats_Driving_Asias_Stock_Market_Rally-Footnote_4.pdf)
http://www.cboe.com/blogs/options-hub/2017/06/02/vix-index-closes-below-10-again-as-professor-called-vix-level-the-biggest-financial-mystery
http://www.cboe.com/products/vix-index-volatility/vix-options-and-futures/vix-index/vix-historical-data (Click on ‘VIX data for 2004 to present (Updated Daily)*’ to review the downloaded data in an Excel spreadsheet)
http://www.barrons.com/articles/inflation-falls-again-and-by-more-than-expected-1506691462 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-02-17_Barrons-Inflation_Falls_Again_and_by_More_than_Expected-Footnote_7.pdf)
https://www.reuters.com/article/us-swiss-toilets/geneva-toilets-flush-with-cash-idUSKCN1BT23K
https://www.ecb.europa.eu/press/pr/date/2016/html/pr160504.en.html
https://www.bloomberg.com/news/articles/2017-09-18/geneva-police-confiscate-euro-bills-clogging-up-toilets
http://europa.eu/rapid/press-release_MEMO-10-92_en.htm?locale=en
https://www.goodreads.com/author/quotes/16927.Dashiell_Hammett

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September 25, 2017

The Markets

Geopolitics, what is it good for? Absolutely nothin’!

In January, Robert Kahn of the Council on Foreign Relations wrote in Global Economics Monthly:

“Markets showed impressive resilience in the face of a range of geopolitical shocks in 2016, but recent market moves suggest this year could be different…It should be the year that global geopolitical risks provide the volatility in markets that I, and many other economists, have been predicting for some time.”

Kahn may share the bemusement of bond market prognosticators who have anticipated the end of the bull market in bonds for years and have yet to see their predictions prove out.

So far in 2017, investor confidence has remained impervious to geopolitical threats. Bloomberg reported, while diplomats at the United Nations stress over North Korea’s threat to drop a hydrogen bomb, Russia’s provocations along the borders of Eastern Europe, rising Middle East tensions, and conflict between the United States and China in the South China Sea, investors remain relatively sanguine.

The CBOE Volatility Index, or VIX, which measures market expectations for near-term volatility in the Standard & Poor’s 500 Index (S&P 500), finished below 10 on Friday. Historically, the VIX has finished below 10 on just a few days in its history.5 While the very low level of the VIX doesn’t tell us much about the future, Barron’s reports it indicates investors are not too concerned about “what’s happening now and what has happened.”

That contention appears to be supported by U.S. stock market performance. Despite hostile rhetoric between the United States and North Korea last week, the S&P 500 and Dow Jones Industrial Average both finished slightly higher.

IT’S THE IG NOBEL AWARDS! On September 14, the 27th First Annual Ig Nobel Prize Ceremony kicked off with a flight of paper airplanes.8IT’S THE IG NOBEL AWARDS! On September 14, the 27th First Annual Ig Nobel Prize Ceremony kicked off with a flight of paper airplanes.

The winners were chosen by the publishers of the Annals of Improbable Research, which reviews, “Real research, about anything and everything, from everywhere. Research that’s maybe good or bad, important or trivial, valuable or worthless.” The most important characteristic of the works published is they make people laugh and think.

The evening’s entertainment included ceremonial bows from returning Ig winners John Culvenor, who received the 2003 Physics Prize for analyzing the forces required to drag sheep across various surfaces, and Deborah Anderson, who received the 2008 Chemistry Prize for testing whether a dark cola is an effective spermicide.

This year’s winning research explored diverse and improbable ideas, including studies entitled:

Didgeridoo Playing as Alternative Treatment for Obstructive Sleep Apnoea Syndrome: Randomised Controlled Trial, which discovered that, “Regular didgeridoo playing is an effective treatment alternative well accepted by patients with moderate obstructive sleep apnoea syndrome.”

Never Smile at a Crocodile: Betting on Electronic Gaming Machines is Intensified by Reptile-Induced Arousal, which showed that, “At-risk gamblers with few self-reported negative emotions placed higher average bets at the EGM after having held the crocodile when compared to the control.”

Is That Me or My Twin? Lack of Self-Face Recognition Advantage in Identical Twins concluded that, “identical twins cannot tell themselves apart, visually.”

On the Rheology of Cats, which explored whether a cat can be both a solid and a liquid and determined, “much more work remains ahead, but cats are proving to be a rich model system for rheological research.”

Each of the 10 Ig Nobel winners was given 60 seconds to explain themselves before being awarded a bust replica of a human head with a question mark on top of it, a certificate signed by a Nobel Laureate, and one trillion Zimbabweans.

Russian-born physicist Andre Geim was the first scientist to win both awards. He received a 2000 Ig Nobel Prize for his work using magnets to levitate frogs, and a 2010 Nobel Prize for discovering graphene (a new form of carbon).

Weekly Focus – Think About It 
“Like a welcome summer rain, humor may suddenly cleanse and cool the earth, the air, and you.” —Langston Hughes, American poet

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.

Sources:
1 https://www.cfr.org/report/global-economics-monthly-january-2017
2 https://www.bloomberg.com/news/articles/2017-08-31/bond-market-s-biggest-rally-of-2017-amazes-traders-as-fed-looms
3 https://www.bloomberg.com/news/articles/2017-09-20/stress-at-un-not-shared-on-wall-street-as-stocks-set-records
4 http://www.cboe.com/products/vix-index-volatility/vix-options-and-futures/vix-index/vix-historical-data
5 http://www.cboe.com/blogs/options-hub/2017/06/02/vix-index-closes-below-10-again-as-professor-called-vix-level-the-biggest-financial-mystery
6 http://www.barrons.com/articles/the-pros-and-cons-of-vix-the-markets-fear-gauge-1505942074 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/09-25-17_Barrons-The_Pros_and_Cons_of_VIX-the_Markets_Fear_Gauge-Footnote_6.pdf)
7 http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_Nav_MAR_other (Click on U.S. & Intl Recaps, then “The Fed and BoJ do the expected”) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/09-25-17_Barrons-Global_Stock_Market_Recap-Footnote_7.pdf)
8 https://www.youtube.com/watch?v=yNwLfRpNHhI
9 http://www.improbable.com/about/
10 http://www.improbable.com/ig/2017/#opera
11 http://www.bmj.com/content/332/7536/266?ref=driverlayer.com
12 https://link.springer.com/article/10.1007/s10899-009-9174-4
13 http://www.improbable.com/ig/winners/
14 http://www.rheology.org/sor/publications/rheology_b/RB2014Jul.pdf
15 http://www.npr.org/sections/thetwo-way/2017/09/15/551225637/ig-nobels-awarded-for-research-into-big-ears-feline-fluidity
16 http://www.npr.org/templates/story/story.php?storyId=130353581
17 https://www.brainyquote.com/quotes/quotes/l/langstonhu121611.html?src=t_humor

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September 18, 2017

The Markets

“In theory, there is no difference between theory and practice, in practice there is.”

Yogi Berra was talking about baseball, but the concept also applies to diversification, according to the GMO White Paper, The S&P 500: Just Say No. From the title, you might think the authors – Matt Kadnar and James Montier – don’t like U.S. stocks. They do:

“Being a U.S. equity investor over the past several years has felt glorious. The S&P 500 has trounced the competition provided by other major developed and emerging equity markets. Over the last 7 years, the S&P is up 173 percent (15 percent annualized in nominal terms) versus MSCI EAFE (in USD terms), which is up 71 percent (8 percent annualized), and poor MSCI Emerging, which is up only 30 percent (4 percent annualized). Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI Emerging’s $1.30.”

The authors’ concern is U.S. markets have performed so well, investors may be tempted to abandon diversification and concentrate their portfolios in indexed U.S. stocks. Kadnar and Montier wrote, “Human nature is to extrapolate the recent past. It is easy to see, given the strong performance of U.S. equities in both absolute and relative terms, why many are suggesting they are the only asset you need to own.”

Focusing assets in the United States, according to GMO, ignores the most important determinant of long-term returns: valuation. “From our perspective, one has to make some fairly heroic assumptions to believe that the S&P is even remotely close to fair value.”

High valuations haven’t dulled the appeal of U.S. stocks for investors, though. Last week, the S&P 500 closed at a record high, and the Dow Jones Industrial Average posted its biggest gain since last December, reported CNBC.com.

7 STEPS TO PROTECT YOURSELF AFTER THE EQUIFAX BREACH. From May through July, hackers exploited a website vulnerability at Equifax, one of the major consumer credit reporting agencies. If you have a credit report, there is a chance your sensitive and personal information including Social Security numbers, birth dates, addresses, and driver’s license numbers, may have fallen into the wrong hands. The stolen information could be used in tandem with passwords taken from other databases to commit financial crimes against you, reported a source cited by Consumer Reports.

Here are seven steps to take to help protect your assets and credit:

1. Find out if you were affected. From a secure computer or encrypted network connection, go to the Equifax website, www.equifaxsecurity2017.com. Scroll down and click on ‘Potential Impact.’ You will be asked to provide your last name and the last six digits of your Social Security number.

2. Enroll in TrustedID Premier. If your data has been breached, Equifax will offer enrollment in TrustedID Premier. The program provides up to $1 million in ID theft insurance, Social Security Number Scanning, 3-bureau credit file monitoring, and the option to freeze your Equifax credit report.

3. Place a fraud alert or credit freeze on your other credit reports. Experian, TransUnion, and Innovis also provide credit reporting services. Contact each of the companies to place an alert or a freeze on your credit report:

          • A fraud alert warns both current and prospective lenders they must take reasonable steps to verify your identity before providing credit. When you’re a victim of ID theft,                   an alert can be put in place for up to seven years.

          • A credit freeze is different. It restricts access to your credit report. If you request a freeze, the credit agency will send a letter with a personal ID number (PIN). Keep the PIN              in a safe place. You’ll need it to unfreeze your accounts, according to the Federal Trade Commission.

4. Change your passwords. Create new passwords for online banking, brokerage, and financial accounts. Each account should have a unique password. Best practices suggest passwords have 12 to 14 characters.

You may want to consider using a password management application. They’re designed to store and retrieve passwords so you can keep track of multiple long, unique password combinations without security issues like storing passwords improperly or failing to remember them.

5. Activate two-factor authentication. Two-factor authentication provides an additional layer of security for email and other accounts. After you enter your user ID and password, you’ll be asked for a code to verify your identity. You can have the account provider text a code to your phone, although that creates vulnerability if your phone is stolen. A better option may be to download an authenticator app so you can generate your own code.

6. Beware email links. Some fraud attempts are obvious: text or email from a Nigerian prince or an update request from a financial institution where you don’t have an account. Others may be more difficult to spot. As a rule of thumb, if you receive an email with a link requesting you update or make changes to a financial account, don’t click on it. Call the financial institution or go directly to its website to make any changes.

7. Keep an eye on your accounts. Check bank, brokerage, and other financial statements for suspicious transactions. If you find unauthorized activity, report it to the institution and the proper authorities.

If you have any questions or concerns about this breach or the markets, please contact us. 

Weekly Focus – Think About It 
“The most effective way to do it, is to do it.”–Amelia Earhart, American aviation pioneer

 * These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.* Past performance does not guarantee future results. Investing involves risk, including loss of principal.* You cannot invest directly in an index.* Consult your financial professional before making any investment decision.* Stock investing involves risk including loss of principal.

Sources:1 https://www.brainyquote.com/quotes/quotes/y/yogiberra141506.html2 https://www.gmo.com/docs/default-source/research-and-commentary/strategies/asset-allocation/the-s-p-500-just-say-no.pdf?sfvrsn=7 (Pages 4 and 8)3 https://insight.factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_091517.pdf4 https://www.cnbc.com/2017/09/15/us-stocks-weekly-gains-fed-retail.html5 https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do6 https://www.equifaxsecurity2017.com/potential-impact/7 https://www.consumerreports.org/equifax/how-to-lock-down-your-money-after-the-equifax-breach/8 https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs9 https://support.norton.com/sp/en/us/home/current/solutions/v121052439_EndUserProfile_en_us10 https://www.pcworld.com/article/3056827/security/4-password-managers-that-make-online-security-effortless.html11 http://stylecaster.com/beauty/strong-women-quotes/

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August 28, 2017

The Markets

Hope floats.

Optimism about possible pro-growth economic policies, including tax reform and deregulation, helped U.S. stock indices finish higher last week, reported Barron’s. It wasn’t all smooth sailing, though. Stocks bobbed up and down as investors’ optimism was weighted by concerns about a possible debt-ceiling battle and government shutdown.

CNN offered some insight to the historic economic impact of government shutdowns on productivity:

“The last time the government was forced to close up shop – for 16 days in late 2013 – it cost taxpayers $2 billion in lost productivity, according to the Office of Management and Budget. Two earlier ones – in late 1995 and early 1996 – cost the country $1.4 billion.”

For investors, it’s important to distinguish between a shutdown’s potential effect on the U.S. economy and its possible impact on U.S. stock markets. A source cited by The New York Times reported:

“…during all 18 government shutdowns, starting in 1976…the Standard & Poor’s 500-stock index averaged just a 0.6 percent loss over the course of those closures. Early on in shutdown history, investors reacted very negatively. Closures in 1976 and 1977 coincided with 3 percent declines in the [S&P 500].

As investors grew more accustomed to shutdowns, they seemed to become more blasé about them. During the mid-1990s and the 2013 closure, for instance, stocks actually rose. They gained 3.1 percent during the 2013 stoppage.”

Bond investors were relatively calm last week, according to Financial Times. Although, there were signs of “debt ceiling jitters.” Yields on U.S. Treasuries that mature in October (when a shutdown may occur) rose on concerns investors might not be repaid in a timely way.

No matter what happens in September and October, keep your eyes on the horizon and your long-term goals.

  

 Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

MILLENNIALS ARE KILLING IT! A recent article in Buzzfeed listed headlines announcing the various things Millennials have “killed” or are “killing.” The list included Big Oil, the NFL, the workday, the cereal industry, and bar soap.

Here’s another industry that is being undermined by millennials’ preferences: cable and satellite television. Millennials are leading a viewing revolution. They are unwilling to ante up for cable and satellite subscriptions, preferring less expensive Internet and streaming services that provide content via the World Wide Web.

A 2017 survey from Videology found more than half of millennial men (ages 18 to 34) have stopped paying for cable, and Forbes reported:

“…on average, the 30-and-under crowd’s primary means of consuming content is through mobile devices, streaming, and online. That’s in sharp contrast to the over-30 crowd who still rely on television for an average of more than 80 percent of their film and TV show viewing.”

The waning popularity of cable and satellite TV appears to have a lot to do with cost. The typical household paid more than $1,200 a year, on average, for cable and satellite television in 2016, according to Nerdwallet – and the cost increased in 2017. Consumer Reports wrote, “Most pay TV companies have announced modest price hikes, but there are also new hidden fees.”

Budget-minded millennials may be having an influence on older generations whose preferences appear to be changing, too. GfK, a market research company, reported:

“New findings…show that U.S. TV households are embracing alternatives to cable and satellite reception. Levels of broadcast-only reception [a.k.a. antenna reception] and Internet-only video subscriptions have both risen over the past year, with fully one-quarter (25 percent) of all U.S. TV households now going without cable and satellite reception.”

So, what kind of savings can be generated when you cut the cable? It all depends on what you currently pay, but it may be worth crunching the numbers.

Weekly Focus – Think About It

“I find television very educating. Every time somebody turns on the set, I go into the other room and read a book.”
–Groucho Marx, American comedian

 * These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.

Sources:
http://www.barrons.com/articles/stocks-rally-on-renewed-talk-of-tax-reform-1503725643?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-28-17_Barrons-Stocks_Rally_on_Renewed_Talk_of_Tax_Reform-Footnote_1.pdf)
http://www.cnn.com/2017/04/25/politics/government-shutdown-daily-life-trnd/index.html
https://www.nytimes.com/2017/08/25/business/government-shutdown-investors.html
https://www.ft.com/content/a5509830-e4ad-3c7f-a821-d92c14374c21 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-28-17_FinancialTimes-Debt-ceiling_Debate_Starts_to_Stir_Parts_of_US_Treasuries_Market-Footnote_4.pdf)
https://www.buzzfeed.com/ahmedaliakbar/millennial-murder-spree?utm_term=.qh8Nr12Rax#.cwL25Np1Pm
http://www.gfk.com/en-us/insights/press-release/one-quarter-of-us-households-live-without-cable-satellite-tv-reception-new-gfk-study/
https://videologygroup.com/press-releases/2017/2/13/new-survey-highlights-digital-habits-of-millennial-males
https://www.forbes.com/sites/markhughes/2015/03/21/the-millennial-trends-that-are-killing-cable/#cbe981e2293b
https://www.nerdwallet.com/blog/finance/bills/cut-the-cord-and-save-money-if-you-do-it-right/
https://www.consumerreports.org/tv-services/your-cable-bill-is-going-up-more-than-you-think-this-year/
https://www.brainyquote.com/quotes/quotes/g/grouchomar109303.html

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The Markets

North Korea may be a little country, but it can churn up big trouble.

The possibility that verbal hostilities between the United States and North Korea could trigger geopolitical conflict had investors on the run last week. In the United States, the Standard & Poor’s 500 Index fell by 1.4 percent, the Dow Jones Industrial Average lost 1.1 percent, and the NASDAQ Composite finished 1.5 percent lower.

Financial Times explained:

“The sell-off came as U.S. President Donald Trump escalated the war of words against the North Korean regime’s accelerated [program] of nuclear testing. Mr. Trump tweeted on Friday, “military solutions are now fully in place, locked and loaded, should North Korea act unwisely.”

While major U.S. indices headed south, the CBOE Volatility Index (VIX) – also known as Wall Street’s fear gauge – headed north. The VIX, which has been flirting with historic lows for much of the year, rose 44 percent in a single day, reported CNBC.

Stock markets in Europe and Asia were also affected by the saber rattling. National indices across Europe suffered weekly losses of 2.2 percent (Sweden) to 3.5 percent (Spain), according to Barron’s. In the Asia-Pacific region, India’s Sensex 30 lost 3.4 percent and South Korea’s Kospi was down 3.2 percent for the week.

Geopolitical concerns overshadowed some important economic news in the United States. Inflation, as measured by the U.S. Consumer Price Index, rose very little in July. In fact, consumer prices have been soft for five straight months, reported MarketWatch. Persistently low inflation could affect the Federal Reserve’s plan to raise interest rates this year. The Fed’s goal is 2 percent inflation.

 

ARE ELECTRIC ENGINES THE TORTOISE COMPETING WITH THE COMBUSTION ENGINE’S HARE? In the late 1800s, the Paris-Rouen race for horseless carriages included 102 vehicles fueled by steam, petrol, electricity, compressed air, and hydraulics, reports The Economist. Not a single electric engine made it to the starting blocks. (The internal combustion engine won.)

Oh, how times have changed!

The International Energy Agency’s Global EV Outlook 2017 reported:

“New registrations of electric cars hit a new record in 2016, with over 750 thousand sales worldwide. With a 29 percent market share, Norway has incontestably achieved the most successful deployment of electric cars in terms of market share, globally. It is followed by the Netherlands, with a 6.4 percent electric car market share, and Sweden with 3.4 percent. The People’s Republic of China (hereafter, “China”), France, and the United Kingdom all have electric car market shares close to 1.5 percent. In 2016, China was by far the largest electric car market, accounting for more than 40 percent of the electric cars sold in the world and more than double the amount sold in the United States.”

Financial Times reported the UBS analysis suggests the market may be at an inflection point as the total cost of ownership for electric vehicles may become comparable to that of combustion engine vehicles as early as 2018 in Europe, 2023 in China, and 2025 in the United States.

Even though their popularity is growing, electric cars comprise a small portion of the market today. UBS expects electric cars to account for 14 percent of the global market, and more than one-third of the European auto market, by 2025.

Weekly Focus – Think About It

“Though most of them sit idle, America’s car and [truck] engines can produce ten times as much energy as its power stations. The internal combustion engine is the mightiest motor in history.”
–The Economist, August 12, 2017

 

* These views are those of Peak Advisor Alliance, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Consult your financial professional before making any investment decision.
* Stock investing involves risk including loss of principal.

 

Sources:
https://www.ft.com/content/44ce541e-5e13-365a-8918-2857025b8cb0 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-14-17_FinancialTimes-S_and_P_Clocks_Worst_Week_Since_March_Despite_Fridays_Bounce-Footnote_1.pdf)
https://www.cnbc.com/2017/08/11/all-time-record-options-bets-on-volatility-spook-wall-street-over-leverage-risk.html
https://www.cnbc.com/2017/07/25/heres-what-happened-the-last-time-the-vix-traded-this-low.html
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html (Click on U.S. & Intl Recaps, “Geopolitical worries deflate stocks”) (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/08-14-17_Barrons-Global_Stock_Market_Recap-Footnote_4.pdf)
http://www.marketwatch.com/story/us-consumer-inflation-remains-soft-in-july-cpi-shows-2017-08-11
https://www.federalreserve.gov/faqs/money_12848.htm

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