Investors often find that temporary recessions provide an opportunity to invest at lower relative prices and therefore achieve outsize returns on long-term investment positions. Many private equity firms are seeking to do exactly that in the current environment on behalf of their investors, but they’re faced with…
In a recessionary environment, many companies are faced with the challenge of adhering to their debt covenants, paying interest on their bonds and bank debt, and ensuring liquidity for ongoing operations. This is important to stock investors because equity shareholders in a company hold claim only to…
Over the past week, we've had the chance to assess the impact of recent economic tumult on business operations, revenue, and profit margins as companies reported earnings for the first quarter of 2020. Earnings reports and…
Tumultuous capital markets serve as an important reminder to incorporate basic, timeless investing principles when constructing, building, and maintaining a portfolio. Investors are reminded that: bonds are not without…
Looking at today’s stock, bond, real estate, and commodity markets in the context of history can be a useful exercise. A balanced view of history can provide valuable perspective that mitigates myopic fear and prevents investors from making knee-jerk…
The ability to invest in stocks may well be one of the most beneficial opportunities that exists for individuals in an economy that incorporates characteristics of capitalism. Investing in stocks, or equity, gives individual investors ownership of a piece…
An investment portfolio should be allocated to provide the risk/return profile that meets the investor’s needs in support of his or her financial goals, risk tolerance, and investment time horizon. This allocation strategy can be developed with an understanding of the probabilistic expected…
Bonds issued by sovereign governments typically offer investors cash flow in the form of coupon payments and principal repayments that are backed by the ability of the government to…
Equity dividend yields are an essential element in the portfolios of many investors. Dividends enable investors to directly receive free cash flows that exceed a company’s…
Earnings reports from the first quarter will provide investors a glimpse into how companies are dealing with the recessionary pressures of early 2020. While we should…
Retirement accounts like a Traditional IRA or a Roth IRA give an immense boost to an investor’s savings by taking advantage of provisions that protect capital gains, dividends, and interest earned from the…
Along with stocks and bonds, real estate is an asset class that warrants consideration for inclusion in an investor’s portfolio. Diversified real estate holdings can provide returns that diverge from those of stocks and bonds under…
When deciding how to apportion their investment portfolios, investors have several allocation tools at their disposal. These include, but are not limited to, mutual funds and…
The stock prices of small-capitalization companies have been disproportionately affected by recent market activity relating to the COVID-19 pandemic, as funds tracking smaller companies are…
Individuals who use 401(k) accounts to save and invest for retirement are typically able to take advantage of matching employer contributions, along with the same tax shelter benefits that are afforded to Traditional or Roth IRA accounts, depending on…
As we navigate the turbulent market volatility that long-term investors inevitably encounter from time to time, high-quality debt securities can play a critical role in providing a well-diversified investor’s portfolio with relatively stable cash flow and the …
The current economic environment has provided opportunity to benefit from historically low interest rates. As the federal fund rate and the rate on 10-year Treasury notes have plummeted, consumers have largely benefited from a…
In a market with such disparate upside opportunity and downside risk, it’s important to take a balanced, pragmatic view of economic factors. In the words of Howard Marks, co-founder and co-chairman of Oaktree Capital Management, “we have to consider the…
When we see the market price of our stock portfolios drop sharply from an exogenous catalyst like the coronavirus, an intuitive knee-jerk reaction is to liquidate everything, take the cash that we can, and…
