How Avoiding Risk Can Create Risk: A Primer on False Risk Avoidance
Students of finance become acquainted with what is taught to be the “risk-free rate.” This is the return that can be obtained by investing in securities of the United States Treasury. Usually, the five-or ten-year treasury yield is counted as the benchmark rate, with potential returns taken as some increment of this rate.
GameStopped: Revenge of the Internet on the Hedge Funds
Today, we are witnessing another transition. Through the internet, hundreds of thousands of unversed speculators are being harnessed to focus on a few stocks.
On the Eve of Inauguration: Does the Stock Market Care Who Is President?
The financial press is awash in predictions as to how the stock market will perform under a Biden presidency. Implied in these predictions is a belief that who occupies the Oval Office will impact the stock market. The record of this is more one of coincidence than causality.
After 2020: Ready for 2021? Insights for the New Year
This year will be best recalled as one where the economy went down, and the stock market went up. After suffering a 30 percent contraction in March and April, the GDP came back forcefully in the summer, only to fade out in the closing months of the year.
Waiting for the Calvary to Arrive: What a Vaccine Will and Won’t Do for the Economy
As the Coronavirus continues to stalk the land, killing at last count over 260,000 Americans, word of at least three vaccines have been delivered for FDA approval.
Can the Election Winner Influence the Stock Market? Not in the Way You Think.
Many investors have decided to wait until the election is decided before investing in the stock market. Based on history, there is a two-to-one chance; this is a bad idea.
Party Like It’s 1999: The Return of Day Trading and Its Impact on the Markets
With so many people impaneled at home due to the coronavirus pandemic, and with the introduction of apps on smartphones like Robinhood that permits people to trade their accounts anywhere, a new generation of day trading has come back to the stock market at full force.
“This Too Shall Pass:” Notes on the Investment Environment Going Forward
After five weeks of quarantine, many people are wondering when, if ever, life will return to normal. The short investment answer is that it won’t.
The Danger and Limits of a Virus: Notes on the COVID-19 Outbreak
The effect on the stock market has been pandemonium. There is an old adage on Wall Street that markets take an escalator going up, but the elevator going down. Program trading has exacerbated this.
Sacrifice the Saver: How Low Interest Rates and Fiscal Stimulus Distort Investor Options
The Federal Reserve recently issued an opinion that was interpreted by many as a signal for a rate cut at the next meeting. The current interest rate for ten-year Treasury bonds is around 2 percent per year. However, this return is high compared to other countries. In Germany, the ten-year government bond or bund, as […]
