Investor Jim O’Shaughnessy said that “human nature is the last sustainable edge” due to its remarkable consistency over thousands of years. We may no longer be trading tulips in Amsterdam or speculating on the ticker tapes in bucket shops, but from a behavioral and emotional standpoint, we do not act differently than our forefathers.
We’re getting a lot of questions lately regarding Treasury Bills, also called T-Bills. Often, clients want to know why they shouldn’t just purchase a 6-month T-Bill at 5% yield. While parking some cash in a 6-month T-Bill can be a financially appropriate move, let’s talk about why it should only be part of one’s overall investment strategy.
This week, the Federal Reserve raised interest rates another .25% in its battle against inflation. In the weeks, and then ultimately days (in light of banking turmoil), leading up to the announcement, everyone everywhere seemed to take it upon themselves to offer Fed Chair Jerome Powell their own version of advice. And there were pretty sound arguments on both sides of the debate. Ultimately, the Fed did what we thought it would do—continue on its path of rate increases, albeit slower than what felt likely even just a few weeks prior (.50%).
Three banks have made headlines in recent days, Silvergate Bank and its holding company Silvergate Capital Corp (NYSE: SI), Signature Bank (Nasdaq: SBNY), and most notably Silicon Valley Bank and its holding company SVB Financial Group (Nasdaq: SIVB). Silvergate Bank is a major bank of the cryptocurrency community and announced on March 8, 2023 that it would be winding down operations with plans to liquidate voluntarily.[1] On Friday, March 10, 2023 California banking regulators announced that the FDIC would take over the liquidation of Silicon Valley Bank holding company SVB Financial Group.[2] On Sunday night, March 12, New York banking regulators announced that Signature Bank would be placed into receivership of the FDIC.[3]
Admiral James Stockdale was the highest-ranking American taken prisoner during the Vietnam War after his A-4 Skyhawk fighter was shot down over North Vietnam. Stockdale ejected, breaking a bone in his back. Upon landing in a remote village, he badly dislocated his knee, which subsequently went untreated. Shortly thereafter, he was captured by North Vietnamese forces.
It seems the only things discussed these days in financial publications are interest rates, inflation, and labor markets. It makes sense. The disconnect between the stories the Fed officials are telling and the one the market seems to be sketching makes for a mesmerizing experience akin to staring into a campfire. It is hard to look away. One of these parties will have to be wrong, but which one?
Larry Summers, former Secretary of the Treasury, recently said, “It’s as difficult an economy to read as I can remember.” To cut to the chase: we would retweet that sentiment. Jerome Powell, Federal Reserve Chair, has practically all but said “READ MY LIPS: NO RATE CUTS.” And yet, investors seem to have a different vision for how the year ahead plays out. One could imagine that we’re all reading effectively the same economic data, but the data itself is a mixed bag, and interpretation of the data (and the importance of each piece) leaves a lot of room for divergence of opinion as well. You’ve probably heard many times by now that the Fed is aiming for a soft landing. What exactly does that mean? It means
Social Security can feel complicated and intimidating. Here’s your complete guide to learning and understanding what it is, how it works, and when to claim it.
Happy New Year! The end of the year is all about reflection and the beginning of the year is all about looking forward. With that spirit in mind, today is a good day to think about looking ahead and what that means in finance.
We’ve joined forces to come up with a list of all of our employees’ favorite books from the past year.
