Viewpoints: September 2020 Welcome to Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others. Economic and Investment News Bits Big Money: The list of largest companies…
September 2020 Financial Markets Summary The S&P 500 Index has historically been one of the best representations of the United States stock market. This is a market capitalization weighted index of 500 large companies in the U.S. Market capitalization weighted is a technical term meaning the larger the company, the larger the respective company weighting…
Beyond Your Finances, Market Commentary
Manipulating Data “Not everything that can be counted counts, and not everything that counts can be counted.” – Albert Einstein The great part about data is it’s derived from facts and numbers. The bad part about presenting this data is the ease at which it can be manipulated to fit a narrative. Most recently, this…
Viewpoints: August 2020 Welcome to Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others. Economic and Investment News Bits Unfathomable Wealth: Jeff Bezos’ personal net worth…
The Rise of Options Trading Born from a perfect storm of zero fees, an economic shutdown, and high volatility, options trading exploded on the scene in 2020. At the end of June, we wrote about gambling on stocks and how it relates to behavioral finance ideas. In the same vein as stocks, there has been…
August 2020 Financial Markets Summary 2020 has been a year for the record books… and it’s only August! The markets have experienced an unprecedented amount of volatility with the fastest 30% or more domestic stock market decline in history, the biggest quarterly decline in GDP since 1947 and many well-known company bankruptcies such as Hertz,…
S&P 500 Dominated by Tech Mega Caps Tech Mega Cap stocks have been propelling the markets closer and closer to all-time highs. As we mentioned in our July Viewpoints post: Tech Mega Caps: FAANGM stocks (Facebook, Amazon, Apple, Netflix, Google (Alphabet), and Microsoft) currently represent 24% of the S&P 500’s market capitalization, more than double…
Volatility The Random Walk Theory suggests that stock prices take a random and unpredictable path, therefore past trends are irrelevant to future stock price movements. We should consider renaming it the Random Sprint Theory after the volatility we’ve seen in 2020 thus far. Recent Heightened Volatility Financial markets have been moving at breakneck speeds, both…
Viewpoints: July 2020 Welcome to Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others. Economic and Investment News Bits Best Quarter for Stocks in 20+ Years: …
July 2020 Financial Markets Summary Growth vs. value, large vs. small and domestic vs. international are some of the most common ways to categorize stocks. However, James Investment Research, Inc. has recently coined a new label: reopening vs. quarantine. James suggests that in this market, there have been two type of stocks, the reopening and…
Historical Stock Market Returns As we approach the halfway mark of 2020, it’s hard to believe the stock market (S&P 500) is down only 7% year to date. We saw a run of 5% through the first almost two months before entering the quickest bear market in history. From the market peak in February to…
Behavioral Finance: Gambling on Stocks In theory, financial markets are efficient. All necessary information is available to the public and logical decisions can be made by rational, unemotional investors. However, theory and reality are often quite different, and investing is no exception. The study of investor behavior is called Behavioral Finance. For more information on the basics,…
Behavioral Finance: Overconfidence In theory, financial markets are efficient. All necessary information is available to the public and logical decisions can be made by rational, unemotional investors. However, theory and reality are often quite different, and investing is no exception. The study of investor behavior is called Behavioral Finance. For more information on the basics, see our…
Viewpoints: June 2020 Welcome to Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others. Economic and Investment News Bits Jobs are Coming Back, Still a Long…
Behavioral Finance: Loss Aversion In theory, financial markets are efficient. All necessary information is available to the public and logical decisions can be made by rational, unemotional investors. However, theory and reality are often quite different, and investing is no exception. The study of investor behavior is called Behavioral Finance. For more information on the basics, see…
