Grandpa Market Commentator!

Highlights: Under current tax law, even non-charitable gifts are not taxable, except perhaps in the case of very wealthy donors. There are several ways to structure gifts to minors that will safeguard the gifts from creditors, predators, and poor decisions. If asset protection is of high importance, a gift to a trust account may be the best alternative. This past week, my daughter gave birth to Mr. Market Commentator’s first grandchild — a beautiful, healthy, 6-pound 13-ounce, perfect-in-every-way baby girl.  Mrs. Commentator and I are thrilled! The new addition to the Commentator household has me contemplating how Mrs. Commentator and…

The Market Week in Review

The U.S. stock market finished the week substantially lower as the Fed’s rate cut and escalation of the U.S. and China trade war weighs on investor sentiment.  Given the Fed rate cut, interest rates followed suit as the 10-year treasury yield dropped from 2.08% last week to 1.85% today.  Meanwhile the spread between the 10-year treasury yield and the 2-year treasury yield narrowed from 0.25% to 0.17%.  Also, as a result of the Fed’s decision to cut rates, the price of gold jumped 2.4% to $1,452 an ounce, and the U.S. dollar index (DXY) rose from 97.99 to 98.10.  After…

Bad Behavior Can Cost You

Highlights: Investors’ emotions follow a cyclical pattern similar to those of the business cycle and the market cycle. It has been suggested that active investors can capitalize on the behavioral cycle by buying stocks when other investors are panicking, and selling stocks when other investors are most exuberant. This is much easier said than done. Recognizing the stock market’s behavioral cycle can help investors avoid the very costly mistake of buying high and selling low. “The more emotional the event is, the less sensible people are.” Daniel Kahneman, 2002 Nobel Prize Winner for Economics I spent one of my high…

The Market Week in Review

The U.S. stock market closed the week at all-time highs as better than expected corporate earnings buoyed major indices.  Interest rates moved slightly higher as the benchmark 10-year treasury yield rose from 2.05% a week ago to 2.08% today.  The spread between the 10-year treasury yield and the 2-year treasury yield dropped from 0.27% to 0.25%.  The price of gold fell by 0.56% to $1,418 an ounce while the U.S. dollar index (DXY) rose from 97.15 to 97.99 amid a rebound in new orders of durable goods.  The price of crude oil rose by 0.89% to $56.19 a barrel as…