Worried about a decline in the value of your home? Financial instruments are now available that can alleviate your fears, at least according to those who are offering these products. The indexing mania that now reaches virtually every corner of the capital markets recently extended into residential real estate, through the S&P/Case-Shiller Home Price indices, […]

Financial headline writers scrambled feverishly to explain the market swoon of February 27 which by the end of the day had sent the S&P 500 plummeting 3.5 percent. Soon after the opening bell, Reuters exclaimed: “Stocks fell sharply at the open…after China’s main stock index tumbled and an unsuccessful assassination attempt on Vice President Dick

The statistical indicators of our parent organization, the American Institute for Economic Research, suggest that while economic contraction is more probable than continued expansion, the timing of the next recession cannot be determined. Investors should assume that the capital markets are “aware” of this situation, and simply maintain their current portfolio allocations. Our model portfolios

On May 3 the S&P 500 broke 1,500, a level not reached since September 2000. Though this index is still the most widely used gauge of “the market” it has greatly underestimated the performance of the overall U.S. stock market in recent years. It has also failed to keep pace with the U.S. economy, which

The regulation of mutual funds is very much in the news. Not surprisingly, shareholders, fund managers, regulators, and, of course, politicians, are all weighing in with regard to the adequacy of current regulations. We contend that when it comes to reigning in abuses, no regulator can match the power of consumer sovereignty. Enforcement, ultimately, must

The yield curve has returned to “normal” status, whereby long-term interest rates exceed short-term rates. The chart below depicts the spread between the 10-year Treasury note and the 13-week Treasury bill. In mid-May the spread became positive. Long term rates, however, remain well below their historical average. The second chart displays the yield on the

  The greatest threat posed by the meteoric rise in mortgage defaults and the resultant collateral damage in the capital markets is that they might cause investors to abandon their long-term strategy. Investors who are aware of their capacity for risk, and who have established an appropriate allocation plan should view recent events as no

Who is to blame for the “subprime mess?” Though there is no clear scapegoat, indignant politicians and regulators are already responding with a raft ofbailouts and proposed solutions. We are skeptical of interference. The mortgage market has the ability to emerge stronger without interference from Washington. Mortgage lending has changed dramatically in recent years. Today,

In the roll call of disappointing earnings and business write downs from investment banks lies a grim common refrain—the once glittering and somewhat mysterious world of structured finance is in trouble. The financial losses and many cuts to staff at banks such as UBS, Citigroup and Merrill Lynch are centered in that new industry, which

We have changed the “back page” of the INVESTMENT GUIDE in order to provide you with more useful information regarding our recommended investment vehicles. We have also changed our recommendations considerably following a careful review of investment vehicles available for each of our recommended asset classes. We have eliminated or replaced several recommended investment vehicles.