It is hard to be a patient long-term investor when the long-term is comprised of a series of often volatile short-terms. This requires great emotional and intestinal fortitude to hang in there when one sees his or her net worth dropping quite rapidly. It is very difficult when markets are volatile and dropping seemingly endlessly to know if those long-hoped-for positive signals may be the light at the end of the tunnel or the train coming at you.
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Gary Carmell
Posted in Economy, Housing, Interest Rates, Investing, News, Uncategorized
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The multi-trillion dollar question is whether inflation is transitory. The Fed and other central bankers believe it is as this chart depicts.
As I’ve written about before, the Fed’s reaction function has switched from a forecasting-based approach to one that is now outcomes-focused in terms of needing to see tangible improvements occurring on Main Street even if it leads to speculation and large rewards on Wall Street.
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Japan has been my model for why I think interest rates will stay low. Its rapidly aging society has led to a shrinking pool of labor over the last two decades which has led to less consumption and more savings. In addition, public spending has increased significantly to help keep the economy growing in the face of strong demographic headwinds.
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The following was one of the headlines on Marketwatch.com on May 5, 2014:
10-year Treasury yield hits lowest of year
U.S. government debt extends last week’s rally
This was after a strong jobs report on May 2,
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Anyone who invests is well aware of average returns that are published over the years for various types of indices. These include, but are in no way limited to, the S&P 500, Wilshire 5000, NASDAQ, Emerging Markets, Bonds (short-term and long-term, corporates and government), and various industry sectors (e.g.
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Inflation is clearly one of the hottest topics for investors in particular and society more generally as the following chart shows. Core inflation has not moved commensurately with the exploding interest in the topic.
The following charts show why inflation is such a hot topic.
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33 days after my heart surgery I resumed playing tennis. Of course, it was not at the same level or intensity as it was prior to my surgery but it was great to get back on the court nonetheless.
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The ecosystem and nature are fascinating to me. What I find so interesting is how systematic and interconnected it is and how species and ecosystems evolve. I naturally (pun intended) wanted to see if there were any lessons that could be applied to investment firms like CWS (and ourselves individually) from the characteristics of healthy ecosystems.
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Although CWS is largely an owner/operator of apartment communities, we have been developing new communities for over 25 years. Approximately 15% of our portfolio consists of properties we have developed. Given the large amount of capital looking to own apartments and the compression in cap rates,
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Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Stock Market, Wealth
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Although I’m in the camp that the Fed will stick to its word and not raise short-term interest rates until after 2023 at the earliest, the market is betting differently. Rather than focusing on when the Fed will start raising rates, let’s assume that they will.
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