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Tag Archives: portfolio management

Estimating Future Stock Returns, June 2017 Update

I’d say this is getting boring, but it’s pretty fascinating watching the rally run.  Now, this is the seventh time I have done this quarterly analysis.  The first one was for December 2015.  Over that time period, the expected annualized 10-year return went like this, quarter by quarter: 6.10%, 6.74%, 6.30%, 6.01%, 5.02%, 4.79%, and 4.30%.  At the end of June 2017, the figure would have been 4.58%, but the rally since the end of the quarter...

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Perceived Versus Real Risk Tolerance

Picture Credit: Denise Krebs || What RFK said is not applicable to investing.  Safety First!  Don’t lose money!=======Investment entities, both people and institutions, often say one thing and mean another with respect to risk.  They can keep a straight face with respect to minor market gyrations.  But major market changes leading to the possible or actual questioning of whether they will have enough money to meet stated goals is what really matters to them.There are six...

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Goes Down Double-Speed (Update 4)

Photo Credit: eric lynchMarkets always find a new way to make a fool out of you.  Sometimes that is when the market has done exceptionally well, and you have been too cautious.   That tends to be my error as well.  I’m too cautious in bull markets, but on the good side, I don’t panic in bear markets, even the most severe of them.The bull market keeps hitting new highs.  ...

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The Band Marches On

Photo Credit: Mike Morbeck || On Wisconsin! On Wisconsin!=============================================================It was shortly after the election when I last moved my trading band.  Well, time to move it again, this time up 4%, with a small twist.  I’m at my cash limit of 20%, with a few more stocks knocking on the door of a rebalancing sale, and none near a rebalancing buy.  (To decode this, you can...

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Distrust Forecasts, Part 2

Photo Credit: D.C.Atty || Scrawled in 2008, AFTER the crash started=============================Comments are always appreciated from readers, if they are polite.  Here’s a recent one from the piece Distrust Forecasts.You made one statement that I don’t really understand. “Most forecasters only think about income statements. Most of the limits stem from balance sheets proving insufficient, or cash flows inverting, and staying that way...

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Distrust Forecasts

Photo Credit: New America || Could only drive through the rear-view mirror=======================================================This is the time of year where lots of stray forecasts get given.  I got tired enough of it, that I had to turn off my favorite radio station, Bloomberg Radio, after hearing too many of them.  I recommend that you ignore forecasts, and even the average of them.  I’ll give you some reasons why:Most forecasters don’t have a...

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Be wary of surrendering liquidity

Photo Credit: darwin Bell || You ain’t getting out easily…=================================================How would you like a really good model to make money as a money manager? You would? Great!What I am going to describe is a competitive business, so you probably won’t grow like mad, but what money you do bring in the door, you will likely keep for some ...

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Patience and a Little Courage

Photo Credit: G E M===================================================If I had to suggest two attitudinal adjustments for the average retail investor, I would encourage patience and a little courage.  Why these two?Patience is needed for a wide variety of reasons.  There is almost never a need to act quickly.  If a few days matters to a decision, such that you feel that you have to act NOW, you’re probably playing the wrong game.  Of course ...

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