Categories
Finance

Learning From Prior Equity Market Patterns

In the world of investments, historical data often help investment managers predict the future performance of the markets. My colleagues and I searched for periods with similar characteristics to today to help guide our investment decision-making during this period of almost inexplicably weak equity markets (although the high price of oil seems to have been taxing the markets recently). We found an eerily similar period with many significantly similar characteristics.

Categories
Finance

TIPS, Inflation, and Your Portfolio

Inflation is a fixed-income portfolio’s silent enemy. Someone who invests $10,000 in 10-year treasury bonds with a 5 percent coupon per year receives two payments of $250 per year until the bond matures. Unfortunately, inflation can quietly erode the real value of those fixed interest payments.

What if there was a way to make fixed income less fixed? Treasury inflation-protected securities (TIPS) do just that: they adjust an investor’s principal to keep pace with the Consumer Price Index, a common inflation indicator, and investors earn interest on that inflation-adjusted principal.

Categories
Essays Personal

Reactions to the Attacks on September 11, 2001

The tragedy of Tuesday cast a glaze over me. Immediately following the tragedy, I tried to assess the effects of the tragedy on every scale—the economic implications, the historical implications, and the political implications—but my dominating thoughts were on the now-proven fragile impermanence of our way of life.