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The Inflation Paradox at the End of 2013
The latest inflation numbers are out from the Bureau of Labor Statistics and they show that consumer prices barely increased over the past twelve months. The most commonly-cited measure of consumer prices is the CPI-U, the Consumer Price Index for Urban consumers. The CPI-U is up 1.2% over the twelve months through November, and this is almost identical to the 1% 12-month rise in the data through October. The other major inflation measure, the Personal Consumption Expenditure index (PCE), is even lower because housing is a smaller component of PCE than CPI.
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Posted in Current Events, Historical Data, Market Trends, Other Blogs
Tagged causes of inflation, market trends
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Do you have too much cash?
How much cash is too much cash? That’s the topic of BR’s latest article, “How Much Cash Should You Hold In A Portfolio?“. It’s a great question, and one I’ve struggled with repeatedly over the past few years.
According to BR:
The bottom line is this: Cash, in modest increments, has a role in any portfolio. But unless you are Warren Buffett, you should limit it to 2 or 3 percent.
You already know that money management is a crucial part of your safe investing process; both portfolio and position sizing. However, actually putting that money into the market is the hard part. The psychological part of investing only comes into play after you’ve bought securities and have money at risk.
So what do you think? How much cash is too much cash in your process?
Sources:
How Much Cash Should You Hold In A Portfolio?
http://www.ritholtz.com/blog/2013/12/the-story-is-not-the-music/
Posted in Investing, Money Management, Other Blogs
Tagged asset allocation, investing process, money, money management, personal money management
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Weekend Reading – Elliott Wave Update
REVIEW
The market gapped up on Monday, rallied to SPX 1792 in the opening minutes, then pulled back until just after the FOMC statement at 2pm on Wednesday. After that the market soared right into late Friday afternoon reaching all time new highs. For the week the SPX/DOW were +2.7%, the NDX/NAZ were +2.3%, and the DJ World gained 2.1%. Economic reports for the week were quite positive. On the uptick: the NY/Philly FED, industrial production, capacity utilization, the CPI, NAHB housing, housing starts, leading indicators, Q3 GDP, and the current accounts deficit improved. On the downtick: building permits, existing home sales, the WLEI, the M1-multiplier and weekly jobless claims increased. Next week is highlighted by Durable goods orders, the PCE and Consumer sentiment.
QUANTITATIVE EASING and the STOCK MARKET
A wild week, to say the least, and an informative one too. Prior to FED chairman Greenspan leaving in early 2006…
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Posted in Current Events, Investing, Market Trends, Other Blogs
Tagged elliott wave theory, technical analysis
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FINCON13 in Pics
Check out PTs slideshow from FINCON 13 – St. Louis style.
This is the story of #FinCon13, told by attendees, speakers, sponsors, and staff in their Tweets, and Instagram and Flickr photos.
Had a blast, and am looking forward to attending next year as a networking machine!
Posted in Other Blogs, Personal Finance
Tagged FINCON, income investing, money, personal finance
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Updating the Yale Model
The so-called “endowment model” of investing – often called the “Yale Model” because it was pioneered by David Swensen at Yale – remains the most prominent institutional investment approach out there. That approach may still be working for Yale (although some would disagree), but in the aggregate it is not.
Data from 831 U.S. college and university endowments and affiliated foundations, representing over $400 billion in endowment assets, shows that the average return for U.S. college endowments was minus-0.3 percent in the 12 months ended in June 2012 (the most recent period for which data is available). Longer-term returns are not a lot better. College and university endowments returned an average of only 1.1 percent annually over the past five fiscal years and 6.2 percent over the past decade, net of fees. There is no way to sugarcoat those numbers. They aren’t very good. Moreover, Swensen himself concedes that the “average…
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The Safe Investing Blog 