The Independent Market Observer

The Independent Market Observer

Commonwealth’s chief investment officer, Brad McMillan, provides insight on the economic, market, and political events of the day—both domestically and on a global scale.

Volatility—It’s a Real Drag

In yesterday’s post, I explained that the noise in returns—in other words, how much they bounce around—is what imposes much of the risk when investing over shorter periods. When you might lose 20 percent or more in a year, any plans that start soon thereafter can be derailed. Volatility (i.e., the noise) is a real drag in that sense.

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Posted: June 23, 2017, 7:02 pm

Time Horizons and Why They Matter

One of the key points I made in yesterday’s post was about your time horizon, and how shorter time frames call for more caution than do longer ones. But this is actually a bigger point, which applies to multiple areas of investing and life. So, I thought I would make the discussion more general.

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Posted: June 22, 2017, 7:05 pm

2017 Vs. 1999: Now What Should We Do?

From our recent analysis, we can conclude that stock market risk is high. We can conclude that, even if things are different this time, they probably aren’t different enough to make a meaningful change in the outcome. And we can conclude that 2017 might well be 1999 all over again.

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Posted: June 21, 2017, 8:04 pm

2017 Vs. 1999: Could It Be Different This Time?

In several recent posts, I have made the case that today’s economy looks quite a bit like 1999—and that the markets may be setting up to look like 2000. Although this argument certainly seems reasonable, we have to ask ourselves how it could be wrong. Despite all the similarities, could it be different this time? If so, how? And what would that mean?

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Posted: June 20, 2017, 7:34 pm

Monday Update: Weak Economic Data Across the Board

Last week, we saw a wide range of economic data. Overall, the news was disappointing, with all indicators coming in below expectations. In many cases, however, the details were better, as annual numbers often remained in healthy territory. Still, future growth acceleration is becoming less likely as signs accumulate that the economy has peaked. That being said, growth is expected to continue, just at a lower level than anticipated earlier this year.

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Posted: June 19, 2017, 5:34 pm

2017 Vs. 1999: When Will the Storm Hit?

I concluded in yesterday’s post that there might well be a storm coming. So, the next question we need to answer is this: How will we know when the storm is about to hit?

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Posted: June 16, 2017, 7:56 pm

Appearance on CNBC's Trading Nation, June 15, 2017 [Video]

Is there a glaring resemblance between the years 2017 and 1999? Yesterday, I appeared on CNBC’s Trading Nation, with host Brian Sullivan, to discuss the similarities I see between 1999 and 2017 in terms of five key economic indicators.

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Posted: June 16, 2017, 4:06 pm

If 2017 = 1999, Does 2018 = 2000?

In yesterday’s post, we investigated whether 2017 is similar to 1999—and decided that it is. This leads us to the next obvious question: will 2018 look like 2000? And what would that actually mean?

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Posted: June 15, 2017, 7:34 pm

1999 v2.0: How Similar Are 1999 and 2017?

When I look at the current economic and market environment, I think it shares a lot in common with 1999. The tech industry is booming, unemployment is low, consumer and business confidence are high, and investors are very complacent. But just how similar are 1999 and 2017? To get a better sense, I decided to do a detailed economic review. So, without further ado, let’s set the wayback machine to 1999.

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Posted: June 14, 2017, 5:54 pm

Appearance on CNBC's Power Lunch, June 13, 2017 [Video]

What are market expectations for the rest of the year? Yesterday, I appeared on CNBC's Power Lunch alongside senior contributor Larry Kudlow, discussing the impact of the Trump administration on the economy with hosts Becky Quick, Brian Sullivan, and Steve Liesman.

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Posted: June 14, 2017, 12:25 pm

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