UNPRECEDENTED TIMES
By Gus Krafve
October 3rd, 2008
What we have witnessed in the global financial markets has no real historical precedent in modern times. A spiral of bad debts, credit downgrades and collapsing equities turned into a full-fledged global market meltdown. Credit markets seized up, and many........................
...read more!
Auction Rate Securities-Another Example of the Investor Losing
By Gus Krafve
September 5th, 2008
As if the current stock market correction and credit crisis weren't enough, there is another slice of the financial markets that has caused angst among some investors. The market I'm referring to is the Auction Rate Securities (ARS) market. Many of you reading this piece.............
...read more!
Fannie & Freddie: Uncle Sam to the Rescue
By Stephen Smith
August 5th, 2008
Fannie Mae was created during the Depression to make sure that sufficient funds were available to mortgage lenders, and then re-chartered by Congress in 1968 as a public traded company. Freddie Mac was created by Congress in 1970 and acts similarly to Fannie Mae. Fannie and Freddie work like this...
...read more!
Bears Still in Control
By Gus Krafve
July 7th, 2008
The numbers are in for the first half of 2008, and it will go down as the worst first half since 1970. Virtually all broad equity indices have posted at or near double-digit negative year-to-date returns...
...read more!
Crude Is The Right Word For Oil Prices
By Stephen Smith
June 5th, 2008
Since the beginning of the year, crude oil prices have gone from $87 a barrel to $130 a barrel, a 49% increase! Gasoline pump prices have shot up to a record high of $3.91 per gallon nationally and are above $4.00 a gallon in many regions. As oil prices continue their upward march, concerns...........
...read more!
Big Picture: Follow the Money
By Gus Krafve
May 6th, 2008
Investors have been selling equities in exceptionally large amounts. For the third and fourth quarters of 2007, investors sold a net $390 billion. On the flip side, corporations bought back a similar amount of stock. The exit from the US market is on par with two previous periods, second quarter 1984 and second quarter 1988...
...read more!
The Fed
By Stephen Smith
March 31st, 2008
The Federal Reserve was created when President Woodrow Wilson signed the Federal Reserve Act on December 23, 1913, creating a seven member board of governors, including the Fed chairman, and twelve regional banks. This structure collectively is known as the...........................
...read more!
INVESTOR PESSIMISM NEAR EXTREME LEVELS
By Gus Krafve
February 29th, 2008
The individual investor has not been this bearish since the stock market bottomed in 2002-2003. The data, according to a recent survey by the American Association of Individual Investors, which has 150,000 members...............
...read more!
Historical Look at the S&P 500 During Recessions
By Stephen Smith
February 5th, 2008
With all the talk of a possible recession, it is useful to see how the S&P 500 actually performed during recessionary periods. Here's a table that shows just that...
...read more!
Letter to Clients
By Stephen Smith
January 23rd, 2008
Dear Clients:
There is an adage in the bond market which applies to equities as well, “Quality remains long after the price is forgotten.”
For a lot of investors, even those with quality holdings and a long-term time horizon, the natural human reaction to a precipitous drop in the stock market like we are currently experiencing is to reduce or sell equities, with the hope of stemming future losses.
...read more!
The Prudent Investor
By Gus Krafve
January 18th, 2008
If someone just read the headlines, they probably would have thought 2007 was a bad year for stocks. Given the turmoil in sub-prime and the credit markets, it was a bad year for certain sectors like Financials and Consumer Discretionary...
...read more!
Market Timing
By Stephen Smith
November 26th, 2007
Nothing ignites the fear of losing one's hard-earned investments like a violent, short-term stock market correction. For many investors, even those with a long-time horizon, the natural human reaction to a sudden drop in the stock market is to...
...read more!
The Fed Phenomenon
By Stephen Smith
November 6th, 2007
In my last Market Insights, I tried to explain what was happening in the credit markets. I briefly talked about how the Federal Reserve and central banks globally have pumped massive amounts of liquidity into the system. These banks allow primary dealers, i.e., large banks and broker dealers to pledge....................................................
...read more!
Credit Crisis
By Stephen Smith
August 16th, 2007
I will try to explain what is happening in our financial markets, but it is very difficult to quantify because we still don’t have all the accurate information.
The root of the crisis is years of easy money. The Federal Reserve and Central Banks around the world have kept interest rates low through the................................
...read more!
The Weakened Real Estate Market
By Trust Company Staff
July 2nd, 2007
The first half of 2007 has left us with a lot of nice things to discuss. The S&P 500 returned 7% through the first half, while the Nasdaq was slightly higher at 7.6%. An eight week period from April 1 to May 31 made up the majority of the gains...
...read more!
The Dow Jones Industrial Average
By Stephen Smith
July 8th, 2007
The press likes to gauge the stock market with the Dow Industrial Average, and I wanted to give some historical perspective to this benchmark. The Dow is one of the oldest indexes which was created by Dow Jones & Company’s co-founder Charles Dow. It was first published on May 26, 1896.....
...read more!
The Dog Days of Summer
By Trust Company Staff
June 23rd, 2007
After a yawn-filled first quarter, stocks took a page right out of the late 1990s and soared to record highs on many indices. At one stretch, one had to go back to 1927 to find a percentage comparison of positive trading days in a one-month period...
...read more!
First Quarter 2007 Review
By Stephen Smith
May 2nd, 2007
The overall performance of the broad market in the first quarter has been close to historical norms for bonds and below historical norms for equities.
The first quarter forecasted below trend economic growth...
...read more!
