Invest Like the Best – Peter Zeihan
The Big Picture - March “Gladness” – Fed Rate Expectations Help Drive Markets Higher
The World Got Better in 2018. Why Doesn’t It Feel Like It?
Our economic analysis, market commentary and key takeaway for the previous quarter.
As we arrive at Thanksgiving Day, we hope everybody has something or someone that they’re incredibly thankful for. While we give thanks, however, we can’t lose sight of the fact that investing is an exercise in managing risk - and this long period of market calm brings to mind an anecdote about risk from one of our favorite books, The Black Swan, by Nassim Taleb.
After a difficult beginning to 2016, investors are re-awakening to the reality that risk still exists in the investment markets. Of course, it’s during these difficult periods where we are bombarded by panicky headlines, fear-mongering, market predictions, and all manner of talking heads giving us advice on what we should be doing next.
So the Fed decided not to raise interest rates from zero. The Fed’s chairwoman, Janet Yellen, cited inflation that was too low (the Fed’s target is 2%) as a primary factor in the decision along with the potential impact of recent financial market volatility on the economy.
So there’s been a bear roaming around our neighborhood lately. It’s been messing around with the neighbors’ bird feeders and instigating havoc at Peter Pratt’s, a favorite local restaurant, by demolishing its locally grown honey setup. Although nobody saw it for weeks, one of the restaurant’s workers finally spotted the bear hugging a tree as it was stalking the delicious honey. How stereotypical. Very prudently, the neighborhood association sent out some emails with informative links about what to do if you should ever encounter a bear. The first two lines of the bear encounter guidelines read as follows:
•If a bear approaches you, remain calm.
•ABSOLUTELY DO NOT RUN (Running may elicit a chase response in the bear).