It’s Cash Flow

By |2017-10-27T16:09:35-04:00October 26th, 2017|Categories: Global Market Update|Tags: , , , |

What drives the stock market? Dow Jones Industrial Average, log scale. Source: Bloomberg In the short run, stock market returns are driven by buyers and sellers. More buyers than sellers drive prices up; more sellers than buyers push prices down. In the long run, though, the market is determined by how much cash companies give to their shareholders. This is the heart of any firm’s valuation. When companies pay dividends or buy back shares, they are distributing [...]

A Durable Future (Part 2)

By |2017-07-06T17:34:18-04:00July 6th, 2017|Categories: Global Market Update|Tags: , , |

Do durable assets create durable returns? Jason and the Golden Fleece, c. 340 BCE. Source: Wikipedia Gold and silver are often touted as “alternative” investments. That is, their returns aren’t highly correlated with other, more typical, investments. So they have the potential to diversify an investment portfolio while providing return in their own right. Gold and silver served as a monetary standard for millennia. Are they useful investments? It’s hard to evaluate the long-term returns of a [...]

A Durable Future (Part 1)

By |2017-07-05T10:31:55-04:00July 5th, 2017|Categories: Money Basics|Tags: , , |

Do durable assets make sense as investments? Gold Roman Aureus. Source: Wikipedia Some things have been around a long time: silver and gold were currencies and a store of value for millennia; fine jewelry has always been a sign of status; and housing and land are always in demand—everyone has to live and world somewhere. But do they make sense in an investment portfolio? A little perspective is important. People get very emotional about real investments. We’re [...]