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Passing Shots

The Fifth Set Blog

Topics: Asset Allocation, Diversification, Efficient Market Hypothesis, Evidence-Based Investing, Long-term investing, Portfolio Management, Random Walk, Risk Premium, Uncategorized

The S&P 500 is at Record Levels…Five Key Takeaways for Investors

On February 19th, 2020, the S&P 500 index closed at 3,386.15.  That marked the highpoint before the COVID-19 pandemic and subsequent global economic collapse drove the U.S. stock market down 33% in a little over a month.  On August 18th, 2020, amid the continuing twin  …read more »

Great Stock Market, Horrendous Economy, What is Happening Here?

From March 24th, 2020 through May 26th, 2020, the stock market, as measured by the S&P 500, returned 36%.  That is not typo.  Over the same period of time, we have seen a torrent of terrible economic news. For example, on April 24th, the Congressional  …read more »

Coronavirus Pandemic Market Meltdown: Shouldn’t the Market be Lower Than It Is?

From February 20th, 2020 through March 23rd, 2020, the S&P 500 plummeted 34%. Concerns about the human and economic impact of the Coronavirus drove stock prices to down at a historic pace. Since then, in the U.S., we have seen tens of thousands lose their  …read more »

The Coronavirus Market Correction – Two Ways to Place Volatility in Context – An Update

Since our March 9th note placing current market volatility in context, the market, as measured by the S&P 500, has continued to see major swings in both directions.  S&P 500 daily losses of 4.9%, 9.5%, 12%, 5.2% and 4.3% have occurred as well as daily  …read more »

Six Quick Thoughts on the Coronavirus Market Meltdown

As I sit to write this post, the Dow Jones Industrial Average is down just less than 1,000 points.  Concerns around the impact of the Coronavirus on both human lives and economic growth is dragging down global equity markets.  Investors are understandably concerned about what  …read more »

Why There is Always the Potential for a Bear Market (and Why That’s a Good Thing)

A recent WSJ article explains why bear markets can occur at any time. The article emphasizes a common point made by FSIA with its clients, that the higher expected return from equities is compensation for the additional risk of holding stocks. It is exactly because  …read more »

The Great Divide over Market Efficiency

In a recent Institutional Investor article, authors Clifford Asness and John Liew, offer an interesting and entertaining look at the evidence for and against market efficiency.  Their article takes turns on both side of the debate by highlighting the strengths and weaknesses of work produced  …read more »

The “Problem” with Emerging Market Equities

Much has been made recently of the weak performance of Emerging Market (EM) equities both on an absolute and a relative basis.  As we can see in the following chart, through February 2, 2014, Emerging Market equities (as measured by the iShares MSCI Emerging Market  …read more »