Let's Talk Investing

The change in stance by the Federal Reserve from its announced plan in late December to continue hiking interest rates and reducing its balance sheet in 2019, to its early January announcement that it may have reached rate "normalization' already and will be open to adjustments to its balance sheet going forward, means Powell has fallen into line with his predecessors to provide a protective "Put" to equity market valuation levels. This is a significant policy change, and could potentially extend the market bounce we've seen since the start of the New Year. However, economic fundamentals are weakening, so 2019 might continue the volatile pattern from 2018 as the competing forces of liquidity and weak fundamentals tug at valuation from opposite sides. In this podcast, Randy provides some history of the development of the Fed and gives investors some thoughts about what this new dynamic might mean for their portfolios.

The Trustees of the Social Security Trust Fund recently released their report to Congress, and the picture isn't pretty. For the first time in 36 years, they will have to begin drawing down their reserves to pay all beneficiaries. Without significant changes, the funds will be exhausted by 2034. In this podcast Randy discusses the implications of these revelations, and outlines some actions you should be taking now if you are planning to retire within the next decade.

In December, 2017 the government passed a new tax bill that lowered the corporate tax rate. One of the big benefits of this reduction touted by the administration was the ability of US companies to plow the savings into increasd capital spending and wage increases for their employees. Fast forward to today, and there here has been an increase in capital equipment spending, but not nearly as much as expected. What has seen a sizable increase? Corporate stock buybacks. Share buybacks have averaged $4.8 billion per day. That's double the rate seen at this point in 2017, and expectations are companies will buy back $800 billion by year end - 50% more than last year and a new record. Does all this spending by companies to buy back their own stock benefit the individual shareholder? The answer is - it depends. In this episode we discuss this trend and point out the factors that make buybacks positive for investors.

In today's podcast we examine the drivers of market direction in both the short and longer term time frames. Factors like earnings and economic growth, interest rate direction and valuation influence the patterns we see in the equity market over multiple cycles. However when you are looking at very short term timeframes, these factors often are relegated to the back seat in favor of emotion and momentum. We will discuss several indicators of short term sentiment released last week that seem to point to the potential for a near term move higher. For those with a longer term preference, we'll discuss the fundamentals of a sector where we currently find some value.

For most of 2017, the equity markets seemed to be marching higher without much of any volatility. All that changed in early February, 2018, when the Dow recorded a decline of 1,175 points in a single trading day. Since that time, the investment markets have experienced significant daily swings. Increased volatility of this kind can cause high levels of anxiety among investors, and drive them to make poor decisions based on emotion. In this episode of Let's Talk Investing, Randy analyzes the 2018 volatility, provides some historical context and offers some ideas to help individual investors better handle their emotions.

Improvements in medical care, more active lifestyles and healthier diets are providing the benefit of longer life expectancies. All this is great news, but along with living longer comes the reality that we may need to plan for much longer retirement periods as well. In this podcast, Randy discusses how you can protect yourself from longevity risk and, most importantly, from outliving your retirement savings.

The month of March marked 10 years since the collapse of Bear Stearns, the 5th largest investment bank in the financial system at the time. Though there were warning signs of impending trouble if you were looking for them, its ultimate demise happened very swiftly and cost its employees and many investors significant losses. Looking back, as investors what lessons can we learn from this epic event in market history?

In this episode Randy discusses the recent movements in interest rates as graphically expressed in the Yield Curve. He explains how rates have recently narrowed along the curve, what are the likely drivers of these changes, and what it means for the income and equity portions of your investment portfolio.

In this episode of Let's Talk Investing, Randy discusses the history behind the development of the Value Investing style, explores some of the variations in the philosophy that have evolved since its start, and details how the Value style is practiced at YHB Wealth Advisors. He also provides listeners some ideas for further study if they want to explore more resources on their own.