“Real Fed Rates Are the Most Accurate Predictor of Future S&P 500 Volatility,” Says SocGen SocGen says it is the most accurate predictor of S&P 500’s volatility over the last 50 years. Should investors be nervous about rising real interest rates? Yes, higher real interest rates mean higher borrowing costs. Real Fed funds rate is…
“U.S. Stock Market, No Froth In Sight” Says Stock Market Sentiment Index Keep in mind that it is just another investor sentiment tool. But it does not show at all if the US stock market is overvalued or undervalued. See our stock market valuation model (99% correlation and R² = 0.97 since 1970).
Can History Help Us Predict the Future of the S&P 500? When the S&P 500 hits all-time high and AAII Investor Sentiment Survey bulls is below 35%, then 88% of the time the S&P 500 is positive one year later (1986-2019). Image: SentimenTrader
Why Potential GDP Has Been Cut in Half Since the 1950’s? The main reason is a lower productivity than previous business cycles, due to: – lower population growth – the service sector is growing faster than the industry sector – lower quality jobs in the service sector have a lower productivity than in the industrial…
The Long-Term Impact of Compounded Returns The amount earned from compounding grows exponentially over time. Successful investing is all about patience and discipline. So, a lack of patience and investment discipline may impact long-term returns. And keep in mind that the power compounding only works if you do not lose capital during the investment horizon. What about compound…
Why a Low or Negative Equity Risk Premium Coincides with a Temporary Market Peak? Because it pushes investors into bonds rather than equities. This was the case in 1973, 1981, 2000, 2007 and 2018 before the market crash. The current equity risk premium is available to our subscribers. Our equity risk premium model has a great 96% correlation with…
BlackRock Geopolitical Risk Indicator for Global Trade Tensions The recent decline of the indicator suggests that investors may be more complacent about the risk and impact of trade conflicts. Source: BlackRock Investment Institute – Global Investment Outlook Q2 2019
The words and wisdom of investing legend Jack Bogle Jack Bogle, founder and CEO of Vanguard, is credited with creating the first index fund. He did as much for investors than any Nobel prize winner.
‘We are entering into the later market cycle,’ says portfolio manager Mike Morey, CIO of Integrity Viking Funds, says why investors should be more risk averse at this point of the cycle. https://www.youtube.com/watch?v=g_vVdwtu6SM
Where Joel Greenblatt sees value now Joel Greenblatt (Gotham Funds) is a legendary value investor. He talks about the market and the future of value investing with Leslie Picker on CNBC. https://www.youtube.com/watch?v=V8Zuw8Mnc-I