Less Than Zero: The Case For Cash

Investors receive virtually no direct reward for holding cash in the current market environment. Thanks to the Fed’s zero interest rate policy that has been in place since December 2008, the interest earned for holding cash has fallen to effectively nothing even on the largest of balances. And with the stock market soaring to record highs in recent years during a time when annualized inflation has been running anywhere between +1% to +4%, the opportunity cost associated with holding cash has been dear to say the least. But despite all of these challenges, the case for holding cash may be growing stronger with each and every point that is added to the S&P 500 Index.

Please click on the link to read more of my article on Seeking Alpha.

The Way Of The Bull And The Bear

I have been struck in recent weeks by the seemingly inverse relationship between capital markets and the mood of those investors that are participating in them. For while markets including stocks have entered into a period of almost eerie placidity, the tension among investors across the philosophical spectrum appears to be rising. But whether you are following the way of the bull, the bear, or somewhere in between, it is important to remember that we are all on the same path in the end. We all wish to grow the value of our capital over time while protecting against the risk of loss. And while not all of us can dictate the direction of the market on any given day, week, month or year, we can embrace the fact that certain principles will always be true about the markets in which we participate. If one can maintain the openness to listen with patience, maintain a rich texture in our thought processes and avoid becoming overly reactive with our conclusions, we provide ourselves with the best opportunity for success and happiness in the end.

Please click on the link to read more of my article on Seeking Alpha.

Welcome To The Machine

If you are someone that enjoys the artistry of investing, now may not be your favorite time to participate in capital markets. For the artistry of the investment decision making process has been squelched and distorted over the last several years by the moneymaking machines of computerized algorithms and seemingly endless liquidity flows from global central banks. But whether we like it or not, we do not get to invest in the markets that we want to have; we only get to participate in the markets that are given to us. And the reality remains that investment markets continue to provide an important vehicle to generate a higher rate of return on long-term savings, which is needed by many now more than ever with the interest earned from bank CDs and savings accounts locked at virtually nil. Investors can remain dedicated to their artistry in today’s environment, but just as long as they recognize how it fits in the context of the forces that are driving capital markets.

Please click on the link to read more of my article on Seeking Alpha.

Surveying The Stock Market Battle Lines

The U.S. stock market appears sound following another eventful week. After exploding to new all-time highs on Monday and Tuesday, stocks were turned back at the 1900 level on the S&P 500 Index and finished the week effectively flat from last Friday. But while the stock market uptrend remains firmly intact, signs of erosion continue to accumulate under the surface. And given that it has been an unusually long time since the stock market has endured a meaningful double-digit pullback, it is worthwhile to step back from the daily lens and survey the stock market battlefield from a much broader view in an effort to determine what might be coming in the days, weeks and months ahead.

Please click on the link to read more of my article on Seeking Alpha.

QE? We Don’t Need No Stinkin’ QE!

With the U.S. Federal Reserve’s third quantitative easing cycle drawing to a close over the next few months, it is worthwhile to explore the expected impact across asset classes once this program finally ends. By far more than any others, two major asset classes have been grossly misperceived throughout the post crisis period regarding how they are likely to fare without the steady torrent of liquidity from the Fed. For while stocks are likely to face a more challenging new reality, both U.S. Treasuries and gold may not just survive, but actually thrive once QE3 draws to a close.

Please click on the link to read more of my article on Seeking Alpha.

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