Investment Insights

Amazon and Apple Are Not the Stock Market

Readers of the financial press may be familiar with the oft-quoted line, “the stock market is not the economy”. The statement is meant to address the apparent contradiction between the performance of the stock market (up) and direction of the economy (down). Since mid-March, the S&P 500 has rallied more than 60 percent while US […]

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2nd Quarter Market Update: Mirror Image

Market Update A sense of dread confronted investors near the end of March, as the extent of the economic damage caused by the coronavirus pandemic came into sharper relief. The S&P 500 fell approximately 34 percent from its high in mid-February to its nadir on March 23. As the Federal Reserve and the US government […]

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When the Bill Comes Due

US stocks are rebounding sharply from the steep losses incurred in the early days of the pandemic. After a brutal 34 percent decline in the S&P 500 in the span of about a month, stocks have staged an impressive rally that has left the S&P 500 only about 9% below its all-time high set on […]

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Surviving the Next Downturn: A Reprise

In January 2018, Ballentine Partners published “Surviving the Next Downturn: A Mental Primer”. The article predicted the inevitability (but not the timing) of the next severe market decline and documented the history of past market selloffs and subsequent recoveries. It also offered some guidance for investors who find the roller-coaster of short-term stock market volatility difficult […]

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1st Quarter Market Report: Crisis Mentality

Market Update Building off the spectacular gains in 2019, equity prices continued their steady march higher in January and early February, confident that the modest but steady progress in the global economy would continue. Despite rumblings of a dangerous new virus spreading unchecked in one of the major industrial areas of China, investors seemed unconcerned […]

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Looking Beyond the Valley

The past week has been historic in many ways. The US now has the most cases of Covid-19 among nations and registered the highest number of weekly jobless claims in US history. The US Senate passed the biggest stimulus in history after the Fed reacted in similarly historic measure. The pace of news has contributed to unprecedented […]

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Gut Check for Long Term Investors

The uneasy alliance between OPEC and Russia to manage oil output and stabilize prices collapsed in dramatic fashion last Friday, as Russia shocked OPEC meeting attendees by announcing they would not participate in new production cuts. In response, Saudi Arabia announced a steep cut in oil prices and an increase in production. The price cuts […]

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Coronavirus Update: Not Out of the Woods

Investors have apparently concluded that the coronavirus epidemic (now called COVID-19) will not do more than modest damage to the global economy. At the latest count, the virus had infected more than 75,000 people and killed more than 2,000. Confident that global growth will experience only a temporary slowdown, equity markets continue to trade around […]

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Fast Spreading Coronavirus Sends Investors to Sidelines

Global equity markets are reacting to the alarming spread of a new virus which appears to have originated in an open-air market in Wuhan, China. As of this writing (Monday 1/27), the coronavirus has killed 80 people in China, and has infected approximately 3,000 in various countries across the globe, including the United States, Japan, […]

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4th Quarter Market Review: It’s All Good

Recall the situation in December 2018: stocks were suffering through a nearly 20% decline in the quarter, and sentiment was pessimistic. The Fed had raised interest rates four times during the year, hoping to return to more “normal” levels after years of near-zero policy rates. US economic growth was slowing after the burst from the […]

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Emerging Market Equities: A Promise Unfulfilled?

During the nine years ending in 2018, real GDP among emerging developing countries expanded at a 7.0% annual rate, more than three times the growth rate of the United States.1 In China, the largest country in the MSCI Emerging Markets Index, real GDP grew at an astonishing 8.5% annual rate, and India grew by 7.0%.2 […]

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Handicapping the Next Recession

As the US economy extends the longest expansion in its history, investors are increasingly worried about when the music will finally stop, i.e. when the next recession will appear. Recent weakening of several widely-followed US economic indicators, coupled with clear signs of deterioration in important international economies, has ratcheted up investor anxiety. Since severe market […]

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Saudi Oil Attack Rocks Energy Markets

A missile attack on the world’s largest crude oil processing plant in Saudi Arabia on Saturday is expected to reduce global production by approximately 5.7 million barrels per day. This represents 50% of Saudi Arabian production and almost 6% of total global output. There were no reported casualties in the attack. Oil prices jumped 18% […]

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Cannabis: How High is High?

  Important Note: Ballentine Partners takes no position on the health and societal effects of the use of cannabis. Our goal in this paper is to analyze the investment opportunity and risks in this growing industry. We recognize that some clients have strong opinions on this subject, and our goal is neither to endorse nor […]

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intersection, traffic

Are Low Interest Rates Good for Investors?

The spectacular decline in global interest rates, both here and abroad, has been viewed as a necessary tonic to reinvigorate the sluggish global economy. Will a sharp reduction in short-term interest rates engineered by the Fed result in a new economic boom and a powerful rally in stock prices? Or will negative yields on sovereign bonds fail to generate a sustainable pickup in economic growth?

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Pendulum

Recession Fears Awaken Slumbering Bears

With the exception of a modest pullback in stock prices in May, investors have enjoyed a relatively drama-free rally in stock prices in 2019. Through July 31, the Russell 3000 index of US stocks returned 20.5% in 2019, and the MSCI EAFE of developed international equities gained 12.6%. Even in the face of an escalating trade war with the US, the China-focused MSCI Emerging Markets Index posted a gain of 9.2% in the first seven months of the year.

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Geopolitical Tensions on the Rise

The latest escalation in tensions between the US and Iran, caused by an alleged Iranian attack on an oil tanker in the volatile Strait of Hormuz, adds to a growing list of geopolitical hotspots around the world. The uncertain outcome of the Brexit negotiations, the lack of progress on denuclearization of North Korea, the temporary truce between the US and Mexico over immigration policy, and the threat of further escalation in the trade war between the US and China, makes it feel like the world is becoming a more dangerous place. […]

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trade war, china, US

Trade War Interrupts Bull Market Party

The global stock market’s steady march upward in 2019 was rather rudely interrupted in the last few days by an apparent breakdown in trade negotiations between the US and China. Until President Trump issued a tweet announcing a renewed interest in raising tariffs on some $200 billion of Chinese imports from 10% to 25%, the S&P 500 had climbed almost 18% since the start of the year. Initially, […]

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April 2019 Monthly Market Tracker

April 2019 Monthly Market Tracker

Global stocks climbed over 3% last month, due in part to record closing highs for the S&P 500 and Nasdaq 100 on April 23 and solid GDP growth in the first quarter. Find out what else moved the markets in our April Monthly Market Tracker.     While taken from sources deemed to be accurate, Ballentine Partners […]

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March 2019 Monthly Market Tracker

March 2019 Monthly Market Tracker

Global stocks climbed slightly over the last month, gaining just north of 1%. Find out how crude oil, the March FOMC meeting, and more moved the markets in our March Monthly Market Tracker.     While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in […]

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British flags

Brexit: Should Investors Be Worried?

As an investor with assets primarily in the United States, you are probably weary of following the trials and tribulations of the Brexit drama in the United Kingdom. As the deadline looms, should we be worried about the economic fallout from a so-called “hard Brexit”? […]

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February 2019 Monthly Market Tracker

February 2019 Monthly Market Tracker

Global stocks climbed nearly 3% in February, continuing January’s momentum. Specifically, the S&P 500 has seen its strongest start to a year since 1987, gaining over 11% in two months. Learn more about what moved the markets in our February Monthly Market Tracker.     While taken from sources deemed to be accurate, Ballentine Partners makes no […]

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The Tide May Be Turning

The Tide May Be Turning

Hedge funds have disappointed investors for almost a decade; even before accounting for fees and taxes, results have trailed a traditional 60 equity/40 bond balanced portfolio over the 10 year period ending in December 2018. A number of large institutions announced their intentions to move away from hedge funds, fed up with subpar results and […]

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Closeup of sailboat deck on ocean

The Powell Put

The stock market’s dramatic recovery so far in 2019, after a dismal fourth quarter of 2018, has left many casual market observers wondering “What changed?” US economic data continues to reflect a modest slowdown, Europe struggles with anemic growth and Brexit uncertainty, and China grapples with a slowing growth rate and enormous debt. In sum, […]

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January 2019 Monthly Market Tracker

January 2019 Monthly Market Tracker

Markets rebounded just under 8% over in January, owing in part to strong reports from US banks and tech firms, the re-opening of the government near the end of the month, and a dovish January FOMC statement. Learn more in our January Monthly Market Tracker.     While taken from sources deemed to be accurate, Ballentine Partners […]

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Q4 2018 Market Review

4th Quarter 2018 Market Review: Nowhere to Hide

Market Recap All the positive momentum from the historic tax reform package, robust economic growth, and buoyant stock prices came crashing to an end in the fourth quarter of 2018. From its high on September 20, the S&P 500 Stock Index collapsed nearly 20% by mid-December, before staging a modest recovery in the year’s final […]

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December 2018 Monthly Market Tracker

December 2018 Monthly Market Tracker

Global stocks dropped approximately 7% in December, marking it the worst December for US stocks since the Great Depression. Waves of selling also hit US markets on Christmas Eve, resulting in the worst pre-Christmas trading session in history. Learn more about what moved the markets in our December Monthly Market Tracker.   While taken from sources deemed […]

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How Right Do You Have to Be

How Right Do You Have to Be?

How right do you have to be to avoid losing money during an equity market downturn, and obtain a net after-tax return superior to the return you would have earned if you had simply held your portfolio through the market turmoil trusting that the market will eventually recover? The answer is that you would have […]

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A view of a cloud in the sky with the sun hiding behind it.

Is the Gloom About to Lift?

One of the familiar adages to describe the price action in the stock market is “it takes the stairs up and the elevator down.” The dramatic decline in stock prices since mid-September certainly fits this pattern. Since September 20, the S&P 500 has fallen 13.1% (as of December 17) and wiped out all of its 2018 gains. Investors have voted with their feet by withdrawing $46 billion from U.S. equity funds and $13.4 billion from bond funds in the week ending December 12. Sentiment has turned decidedly negative: the American Association of Individual Investors’ latest reading showing bullish sentiment at just 20.9%, a 17-percentage point drop since the last reading. Is this a typical market “correction” or the start of something much more serious? […]

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November 2018 Monthly Market Tracker

November 2018 Monthly Market Tracker

Global stocks climbed over 1% last month, rallying a bit after the ups and downs of October. Reduced uncertainty at the beginning of the month helped the market sustain brief gains, and again near the end of the month after Federal Reserve Chairman Jay Powell remarked that interest rates were nearing “neutral” levels. Learn more […]

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Unfurled roll of "I Voted" stickers

Post-Election Investment Insights from Ballentine Partners

With the final mid-term election results (mostly) decided, we can move onto contemplating the impact of the vote on the outlook for financial markets. In broad terms, the pollsters got it right. The Democrats regained control of the House of Representatives, and the Republicans added to their majority in the Senate. The prospect of a divided Congress, especially in the current hyper-partisan era, is likely to mean very little new legislation enacted in the next two years. Legislative gridlock is generally considered a positive for markets, since it reduces uncertainty. Nonetheless, the Trump administration’s unconventional approach to governing is likely to keep things interesting. […]

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October 2018 Monthly Market Tracker

October 2018 Monthly Market Tracker

Markets tumbled nearly 8% over the course of the month, propelled by Federal Reserve Chairman Jay Powell’s announcement that they plan to continue rate hikes and anticipation of new Chinese stimulus measures. Learn more in our October Monthly Market Tracker.       While taken from sources deemed to be accurate, Ballentine Partners makes no representations about […]

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Put options, investments, economy

Hedging with Put Options: A Costly Endeavor

After a decade-long economic expansion and bull market in US stocks, investors are understandably nervous about downside risk. Global economic policy uncertainty rose sharply in 2018, fueled by the threat of a trade war among the world’s largest economies. With the stock market crash of 2008-’09 a distant but still painful memory, many investors are […]

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3rd Quarter 2018 Market Review: Quiet Calm in Early October

Market Recap US equities continued their steady rise in the third quarter of 2018, further distancing themselves from equity markets in other parts of the world. The substantial reduction in corporate tax rates enacted at the start of the year is paying big dividends in the form of sharply higher earnings growth from US companies. […]

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Image of a yellow train signal in a city

The Message from the Bond Market

Last week’s extreme turbulence in global stock markets was preceded by a sharp rise in US interest rates. After fluctuating in a narrow range around 3% for most of the year, the bellwether 10 year US Treasury note yield spurted from 2.87% on August 31 to 3.23% on October 5, the highest level since July 2011. The rapid rise in yield was one of the reasons cited for last week’s brutal two-day selloff in stocks, which drove the S&P 500 down by nearly 5% and sent global stocks tumbling. […]

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September 2018 Monthly Market Tracker

September 2018 Monthly Market Tracker

After some ups and downs last month, global socks ended up just above even. There was a bit of a climb in the second half of the month, as the S&P 500 reached a new all-time high above 2940 and the US, Canada, and Mexico came to a last-minute agreement on a proposal to revise […]

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Crowd on boardwalk

Is Indexing Getting Too Popular? (Continued…)

As indexing continues to garner a larger share of investor assets, some observers worry that we are approaching a natural limit in the proportion of common stocks that can be indexed. After all, if indexing means owning stocks without regard to their fundamental outlook or market valuation, what is the incentive to seek out companies with superior characteristics that will cause their stocks to rise faster than the market? […]

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August 2018 Monthly Market Tracker

August 2018 Monthly Market Tracker

Global stocks climbed just over 1%, boosted by Apple’s stock growth and impressive US economic growth in the second quarter. Learn more in our August Monthly Market Tracker.     While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness for […]

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A Turkish lira obscuring an image of a graph showing a downtrend

Emerging Markets: Down, Not Out

After a spectacular year in 2017, emerging market equities have badly trailed their developed market counterparts in 2018. As of this writing (August 14, 2018), the S&P 500 has gained 6.8%, the MSCI EAFE Developed International Index is down 3.8% and the MSCI Emerging Market Equity Index has declined 9.9% (all in US dollars). It has certainly been a rough ride. […]

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July 2018 Monthly Market Tracker

July 2018 Monthly Market Tracker

Global stocks end up a full 3% in the last month, owing in part to growth fueled by the 2017 tax cuts and despite tariffs on some US exports and a historic drop in Facebook shares. Learn more in our July Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no […]

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Screenshot of the first page of the 2Q 2018 Market Review

2nd Quarter 2018 Market Review: Treading water in choppy seas

Countervailing forces created plenty of volatility in the second quarter, as investors veered from applauding the strength of the US economy to bemoaning the threat of heightened trade conflicts. US equities (S&P 500) posted a gain of 3.3% in the quarter but remain more than 5% below the high set in late January. Yields on […]

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June 2018 Monthly Market Tracker

June 2018 Monthly Market Tracker

Global stocked ended just slightly down last month, as risks of a global trade war were on investors’ minds mid-month. Learn more in our June Monthly Market Tracker.     While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness for […]

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Exterior glass facade of one of Donald Trump's buildings.

Investing in the Age of Trump

Whether you love him or hate him, it is hard to deny that President Trump has an operating style that is unlike any president who came before him. Investors generally dislike uncertainty, and Trump’s unpredictability would seem to be a depressant on investor optimism. Yet the S&P 500 Stock Index has returned about 33% since the 2016 election, confounding the analysts who foresaw doom and gloom in an upcoming Trump administration. While Trump apparently views the stock market as a report card on his performance, he has shown no reluctance to press for policies that have rattled investor confidence. Given these countervailing forces, a number of our clients are asking the question: is Trump good or bad for investors? […]

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May 2018 Monthly Market Tracker

May 2018 Monthly Market Tracker

Global markets ended just barely north of even last month, boosted by treasury yield rates and stymied by international geopolitical concerns. Learn more in our May Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness for […]

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April 2018 Monthly Market Tracker

April 2018 Monthly Market Tracker

Global markets climbed slightly over the last month, owing in part to the subsiding of trade war fears and optimism over first quarter earnings. Learn more in our April Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or […]

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1st Quarter Market Review

1st Quarter 2018 Market Review: Searching for direction

The string of nine straight quarterly gains for the S&P 500 Stock Index was finally broken in the first quarter of 2018, but only modestly. Stocks exploded out of the gate in January, buoyed by the recent passage of the tax reform package by the Republican-led congress. As the quarter wore on, however, investors became […]

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March 2018 Monthly Market Tracker

March 2018 Monthly Market Tracker

Global markets dipped another 2% this month, partly due to concerns about a possible trade war and the President’s recent comments about Amazon. Learn more in our March Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its […]

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Two rows of different nations' flags

Trade Policy: A Slippery Slope

The Trump administration’s recent effort to impose tariffs on steel and aluminum imports into the United States has provoked a significant backlash among free-market economists, business leaders, and Republicans in Congress, among others. They worry that the imposition of protectionist measures designed to insulate domestic manufacturers from lower-cost foreign competitors could result in retaliation from foreign governments on other products that could expand into a full-blown trade war. As financial market investors dependent upon economic growth, how worried should we be? […]

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February 2018 Monthly Market Tracker

February 2018 Monthly Market Tracker

Global markets were down just over 4% this past month, kicked off by a surge of volatility and coinciding with the S&P 500’s first down-month since October 2016. Read more in our February Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the […]

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Market Correction: Passing Squall or Tsunami Warning?

Investors awoke from their multi-year slumber in late January to a nasty reminder that stock prices are volatile. After a period of calm in the stock markets that rivals the longest in recorded history, a jump in average hourly earnings and the recent backup in bond yields refocused investor concern on the prospect of higher […]

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January 2018 Monthly Market Tracker

January 2018 Monthly Market Tracker

Global markets climbed over 5% last month despite declines in both the Dow Jones Utility Average Index and the Dow Jones US Real Estate Index and returning volatility near the end of the month. Read more in our January Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the […]

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Roller Coaster Silhouette at Sunset

Surviving the Next Downturn: A Mental Primer

As of this writing (January 10), the broadest index of global stock market performance (MSCI ACWI) has gone more than 400 days without a pullback of 5% or more, the longest such streak in 30 years. It is no surprise, then, that experienced investors are riding the rally with one foot on the gas and a hand on the parking brake. The only thing we can say with certainty is that this streak will end, but the question is when. In the meantime, enjoy the ride. […]

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Q4 2018 Market Review

4th Quarter 2017 Market Review: Stars aligned

It all came together for financial markets in 2017: accelerating earnings growth, marked improvement in sluggish overseas economies, benign interest rates, improving consumer confidence, and a big tax cut for US businesses heading into 2018. These trends propelled equity markets to strong gains in all geographies, leading to a gain in the MSCI All Country […]

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December 2017 Monthly Market Tracker

December 2017 Monthly Market Tracker

Global stocks were up yet again last month, boosted by the Senate’s passing of the tax reform bill and a new high for crude oil prices in 2017. Read more in our December Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the […]

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Monthly Market Tracker, November 2017

November 2017 Monthly Market Tracker

Global markets were up nearly 2% in November, affected by commentary from the Fed, Japan’s GDP, and interest in Bitcoin. Read more in our November Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness […]

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directional signpost

The Biggest Issue Facing Investors is Not Tax Reform

US equity investors have been laser-focused on the tax reform debate occurring in Washington over the last few weeks. With economic data remaining firm and few economists forecasting a downturn in coming quarters, investor attention has been centered on the potential for meaningful earnings improvement as a result of lower corporate taxes […]

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Monthly Market Tracker, October 2017

October 2017 Monthly Market Tracker

Global stocks climbed in October, with strong economic growth in China, continued improvement in German employment numbers, and positive US hourly earnings growth. Read more in our October Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness […]

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Monthly Market Tracker, September 2017

September 2017 Monthly Market Tracker

Global stocks ended up again in September, with US gasoline production, the UK employment rate, and the Fed all having an impact over the course of the month. Read more in our September Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the […]

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Q3 Market Review

3rd Quarter 2017 Market Review: Teflon stock market

An escalating war of words between two nuclear-armed countries….the Federal Reserve’s plans to continue tightening monetary policy……the unpredictable actions of a novice U.S. president…..diminished expectations for the new administration’s pro-growth economic policies. One might think that these headlines would cause a degree of anxiety among investors, but financial markets digested these and other negative headlines […]

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Monthly Market Tracker, August 2017

August 2017 Monthly Market Tracker

Global markets ended just north of even in August, with Japan’s manufacturing and services sectors and the German economy all growing at slower paces than anticipated. Read more in our August Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in […]

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NASA image of a hurricane from space

Harvey’s Path of Destruction

As the residents of southeast Texas return to their homes and assess the damage caused by Hurricane Harvey, our thoughts and prayers are with them. Harvey’s torrential rains are likely to make this storm one of the worst natural disasters in our nation’s history. […]

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View of a London street, close to the ground, looking at part of Tower Bridge.

Is the European Recovery for Real?

One of the legends in the investment business (Byron Wien, long time chief strategist at Morgan Stanley, now at Blackstone, and a former mentor of mine) once described Europe as “a vast open-air museum”. Beyond its unique history and architecture, I believe he was referring to the continent’s antiquated labor rules, sclerotic decision-making processes[…]

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Monthly Market Tracker, July 2017

July 2017 Monthly Market Tracker

Global markets climbed in June, influenced in part by Chinese manufacturing, a weakening US dollar and Swiss franc, and US real estate construction. Read more in our July Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary […]

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Q2 2017 Market Review

2nd Quarter 2017 Market Review: The silence is deafening

The second quarter of 2017 marked another period of relative calm in the financial markets. Despite any number of potential hotspots, equity prices posted another quarter of solid gains, punctuated only briefly by minor bouts of nervousness. Indeed, the lack of volatility in global stock markets has some analysts worried that an overabundance of complacency […]

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Monthly Market Tracker, June 2017

June 2017 Monthly Market Tracker

Global stocks ended just north of even last month, with some ups and downs due to lower than expected US retail sales and a strengthening Japanese labor market.  Read more in our June Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in […]

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Picture of a skyscraper being built.

When Will the Expansion End?

The United States is now in its ninth year of economic expansion and third longest since the Civil War. If the expansion lasts another year, it will be the longest on record. With the 2008-09 recession a distant but still painful memory, investors are rightly wondering when it will all end.

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Monthly Market Tracker, May 2017

May 2017 Monthly Market Tracker

Investors’ short-lived anxieties weren’t able to stop the growth in the markets last month. Global stocks were up in May, in part due to Germany’s labor market, crude oil inventories, and strong first quarter domestic GDP spurred by growth in domestic consumer spending. Read more in our May Monthly Market Tracker.   While taken from sources […]

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Portfolio Optimization Theory vs. Practice

This paper examines the gap between the theory of portfolio construction and its practice. In particular, it analyzes some of the problems in the application of portfolio optimization techniques to individual investors. We then discuss what can be done today to compensate for the problems with the theory, and what additional work needs to be […]

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Crowd on boardwalk

Is Indexing Getting Too Popular?

Market watchers have noted the stunning growth of indexed vehicles over the last few years. Coupled with the ease of trading and transparency of exchange-traded funds (ETFs), the low cost and tax efficiency of indexing have led to a boom in the growth of these vehicles to the detriment of actively-managed mutual funds. With indexing […]

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Monthly Market Tracker, April 2017

April 2017 Monthly Market Tracker

“Strong” was the word of the month in April. Germany, China, and the US all influenced the upward movement of global stocks last month. Read more in our April Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market […]

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Black and white ink drawing of a castle being attacked.

Active Management Under Siege

As data continues to accumulate that reinforces the growing consensus of the superiority of passive indexing strategies over active management, the defenders of the old guard are fighting back. They are cutting fees, shuttering underperforming strategies, and merging businesses in order to reduce costs. The pressure is severe: according to Morningstar Inc., some $1.2 trillion has been withdrawn from actively managed U.S. stock funds since the start of 2007, while nearly the same amount has moved into passive U.S. stock funds over the same period. […]

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Monthly Market Tracker, February 2017

March 2017 Monthly Market Tracker

Growth in domestic manufacturing, UK retail sales, US crude oil inventories, and more all played into last month’s market behavior. Read more in our March Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its appropriateness […]

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markets, review, economy

1st Quarter 2017 Market Review: The beat goes on

There was no shortage of political intrigue in the first quarter of 2017 as the Trump administration assumed the reins of power with a mandate to upset the status quo. Irrespective of your political views, most people would agree that he has achieved success on that score. Relying on a set of pro-business promises that […]

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City billboards

What’s in a Phrase

The stock market abounds with colorful sayings that reflect the collective wisdom of decades of investment experience. For professional investors, these time-worn adages are reminders of sometimes-painful past market episodes and the unending challenge of getting the future right. But at the end of the day, can these slogans actually be useful in making investment decisions?

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Monthly Market Tracker, February 2017

February 2017 Monthly Market Tracker

Increases in UK GDP, China’s consumer price index, and US small business optimism helped to guide the markets up last month. Read more in our February Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary or its […]

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Monthly Market Tracker, January 2017

January 2017 Monthly Market Tracker

Global stocks climbed in January despite less than ideal home sales with help from US manufacturing, a healthy domestic labor market, and rising UK inflation.  Read more in our January Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary […]

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A weathervane with blue sky in the background.

The Only Certainty is Uncertainty

Irrespective of your political views, one must acknowledge that big changes are afoot in Washington. Trump supporters applaud the aggressive style of the new administration’s take-no-prisoners approach, while liberals cringe at the thought of the damage that might be wreaked on their fundamental beliefs over a four-year presidential term.

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Q1 Market Review

2016 Market Review and 2017 Outlook

The Year in Review Despite a number of stomach-churning events throughout the year, the US stock market (as measured by the S&P 500) posted a solid 12% return last year, exceeding its long-term average and most strategist predictions (including ours). The broader global stock index, the MSCI ACWI, gained 8.5%, dragged lower by the 1.6% […]

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Monthly Market Tracker, December 2016

December 2016 Monthly Market Tracker

The markets remained steady, ending positive with influence from the Euro, West Texas Intermediate crude oil, and a surge in US small cap investors. Read more in our December Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary […]

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Tower of balancing stones.

The Trump Rally – Impressive, but selective

Since Donald Trump’s upset victory in the 2016 Presidential election, financial markets have been on a tear. Or have they? A casual observer of the business press would probably conclude that stocks and bonds around the world are rallying around President-elect Trump’s pro-growth, business-friendly, tax reform policies designed to “make America great again.” The reality, however, is somewhat different.

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November 2016 Monthly Market Tracker

November 2016 Monthly Market Tracker

Despite market and investor anxiety, the US Purchasing Managers Manufacturing Index, DJIA, US dollar, and crude oil prices all swung up in November. Read more in our November Monthly Market Tracker.   While taken from sources deemed to be accurate, Ballentine Partners makes no representations about the accuracy of the information in the market summary […]

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Gloved hand holding up a spyglass in the night

Markets Struggle for Post-Election Clarity

With last week’s historic election now behind us, investors are feverishly recalibrating their plans in light of its stunning outcome. The despair registered in the early hours after the polls closed on November 8 turned sharply into euphoria as investors focused on the “pro-growth” agenda of a Republican president and control of both congressional chambers.  […]

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October 2016 Monthly Market Summary

October 2016 Monthly Market Summary

Taking inventory of the US labor markets is an important factor when measuring the pulse of the domestic economy. Unemployment statistics and wage growth are two ways many investors gauge the health of working Americans. So far in 2016, unemployment has remained around five percent through October despite much of the negative political rhetoric shared […]

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Shock and Awe in Financial Markets

The stunning upset in yesterday’s US presidential election has left many people in a state of shock. Although the polls indicated a tightening race over the last two weeks, very few observers predicted or believed in the possibility of a President-elect Trump. Yet here we are. If President-elect Trump fulfills many of his campaign promises, […]

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Bruce D. Simon, CFA, CPWA®

3rd Quarter 2016 Market Review

In spite of mostly lackluster economic results around the world, financial assets posted another solid performance in the third quarter of 2016. Once the surprising vote in late June by the UK to leave the European Union was digested, the markets settled into a relatively quiet drift upward that ended in mid-September. That calm ended […]

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September 2016 Monthly Market Summary

September 2016 Monthly Market Summary

After years of lagging the stock market, gold, silver, and platinum prices per ounce have all increased in 2016. Silver is leading the charge, up 38% since December 2015, followed by gold (up 24%) and then platinum (up 15%). Precious metals can be controversial in the eyes of investors as the proponents of the shiny […]

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Volatility Returns, With a Vengeance

After an exceptionally quiet summer in the financial markets, when the Dow Jones Industrial Average failed to move more than 1% for more than forty days, the calm was broken rather dramatically on September 9. The Dow shed nearly 400 points that day, and the following week has been a roller-coaster ride of big ups […]

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August 2016 Monthly Market Summary

The debate over active versus passive management has picked up as of late as over $25 billion was reportedly redeemed from hedge funds in July alone. To put this in perspective, July’s redemption number was the highest seen since February 2009. As domestic markets continue to hover around all-time highs, the investors that have opted […]

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Games That Managers Play

In evaluating a money manager, informed investors naturally want to evaluate the manager’s track record. Has the manager delivered returns above the chosen benchmark? Have they assumed excessive risk in order to achieve those returns? What about the impact of fees and taxes? How reliable is the performance data provided by less-regulated private fund managers? These are just a sample of questions that investors should answer in order to validate a manager’s competence, and the answers are rarely clear-cut.

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July 2016 Monthly Market Summary

July 2016 Monthly Market Summary

In July, the pound sterling fell to its lowest level versus the US dollar since 1985. The current market sentiment is that the UK’s economy will slow down immensely due to impending restrictions as a consequence of the Brexit vote. However, it may be too early to come to such a conclusion as the lower […]

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The Siren Song of Active Management

At Lake Wobegon, “all the women are strong, all the men are good looking, and all the children are above average.”

Despite being an obvious fiction, many people seem to apply a similar logic to managing their money. They believe that through their own superior insight, or by hiring investment professionals with many years of experience, they can “beat the market”. Their confidence is an inherent part of human nature, and is responsible for creating so much wealth in our society over time.

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Bruce D. Simon, CFA, CPWA®

2nd Quarter 2016 Market Review

After the stock market’s early-2016 plunge was largely recouped by the end of the first quarter, equity prices settled into a narrow trading range from April to early June. That relative calm was punctured on June 23 by the surprising vote by the UK electorate signaling its desire to leave the European Union. The unexpected […]

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June 2016 Monthly Market Summary

June 2016 Monthly Market Summary

Investors are remaining cautious as margin debt continues to decline in 2016. Patience will be the name of the game for the second half of 2016 as investors have started to shift their risk profiles by taking margin off the table and opting for traditional defensive positions such as commodities, utility stocks and bonds.   The […]

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May 2016 Monthly Market Summary

May 2016 Monthly Market Summary

This month, retail sales in the United States gave investors a reason to be optimistic, as they handily beat consensus estimates with 1.3% month-over-month growth. E-commerce, which now accounts for approximately 8% of all retail sales, helped lead the charge by growing 15.2% year-over-year in the first quarter of 2016.   The discussions and opinions […]

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Tax-Efficient Investment Management 2006-2014, A Case Study

This paper highlights the importance of active tax management of investment portfolios, using the results of an actual Ballentine Partners’ client as a case study.  While the strategies and results described are real and verifiable, other details regarding the client have been altered to protect confidentiality. During the period covered by this study, we were […]

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April Monthly Market Summary

April 2016 Monthly Market Summary

First quarter earnings season kicked off in April with mildly encouraging results coming from US companies. The fundamentals of many companies have declined, but not to the extent many experts predicted; the public markets reacted accordingly as the S&P 500 was up modestly for the month of April (0.4%). The developed international country index (MSCI […]

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Will Braman, Real Assets Adviser, Wall Street Journal, WSJ, Stocks

1st Quarter 2016 Market Review

Was the first quarter’s financial roller coaster foreshadowing what to expect for the rest of the year, or just much ado about nothing? Markets experienced renewed – and extreme – volatility for four major reasons: the initiation of higher interest rates from the US Federal Reserve, the perception of a looming global recession led by […]

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March 2016 Monthly Market Summary

March 2016 Monthly Market Summary

They say that a rising tide lifts all boats. Well, in the case of the world’s stock markets, a weakening US Dollar played the part of the rising tide this month, as the All Country World Stock Index (ACWI) moved into positive territory for the first time this year. The ACWI was up over 8% […]

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February 2016 Monthly Market Summary

February 2016 Monthly Market Summary

For over a year, the market has been focused on rising oil stockpiles in the US – if inventory keeps increasing, there is still too much supply, so oil should cost less. Crude oil fell below $29 in mid-February. Since that time, oil has rallied 30%. Yes, OPEC might “freeze” production at their already-high levels […]

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What is Risk?

Individual investors tend to equate “risk” with loss of capital.  That definition of risk may lead an investor astray and prevent the investor from reaching his or her goals.  This article proposes a different definition of risk and explains how prudent management of risk is essential for meeting the investor’s goals.  Investors cannot avoid risk, […]

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January 2016 Monthly Market Summary, Treasury

January 2016 Monthly Market Summary

In mid-December, the Federal Reserve increased its benchmark interest rate for the first time since 2006—and Treasury yields have been falling ever since. While that may seem puzzling, the Fed actually has little influence on all but very short-term interest rates.  In fact, the 1-year Treasury yield has actually doubled since the beginning of 2015. […]

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Front page of the paper "MLPs - Confusion and Fear"

MLPs – Confusion and Fear

Master limited partnerships have had a tough year. A precipitous drop in energy prices, weak investor sentiment, adverse technical selling factors (closed-end fund deleveraging, short-selling by hedge funds, tax-loss harvesting), and recent issues surrounding one of the bellwethers of the industry, Kinder Morgan, have all contributed to the worst performance the sector has ever experienced. […]

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Improving Investment Returns by Reducing Taxes, A Case Study

Improving Investment Returns by Reducing Taxes, A Case Study

This case study is based on an actual Ballentine Partners client family and outlines best practices for maximizing client after-tax returns using a number of techniques including asset allocation planning, asset location planning, and active tax management of portfolios.  While the strategies and results described are real and verifiable, the details of the client’s background […]

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Investors Profit from a Shrinking Banking System

The 2008 US Credit Crisis and resulting European Banking and Sovereign Crisis exposed major weaknesses in banking regulations and oversight. The reaction from policymakers and market participants set about sweeping reforms that will permanently alter the system as we know it. Ballentine Partners has followed these events closely, recognizing that massive regulatory change will create […]

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Setting Your Investment Goals: It’s Harder Than You Think

The right way to define your investment goals requires you to answer many important questions about your financial situation now, and your expectations for the future.  You must address the types and amounts of investment risks you are willing to tolerate.  You must also consider taxes on your investment income, inflation, investment fees, regulatory constraints […]

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MLPs in 2015 – Confusion and Fear

Master limited partnerships have had a tough year. A precipitous drop in energy prices, weak investor sentiment, adverse technical selling factors (closed-end fund deleveraging, short-selling by hedge funds, tax-loss harvesting), and recent issues surrounding one of the bellwethers of the industry, Kinder Morgan, have all contributed to the worst performance the sector has ever experienced. […]

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A Balanced View of the State of the Municipal Bond Market

Despite the negative drumbeat of negative press about the state of municipal finance in the United States, we believe the risk to our clients’ municipal bond portfolios is extremely low. State and local governments, feeling the impact of the economic turmoil of the past few years, are currently struggling with significant budget deficits. This has […]

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Debunking the Myths of Impact Investing

Debunking the Myths of Impact Investing

The path of development and globalization we have accelerated on for the last 300 years has brought profound advancements in health, technology, comfort, and prosperity, but today we face an ever growing array of challenges both socially and environmentally. Corporate growth and strong capital markets (i.e. stock market, banking system) have been our engines of […]

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