Monthly Archives: August 2015

Endowment Wealth Management Weekly Capital Markets Update for Week Ended 8/28/2015

WEEKLY CAPITAL MARKET HIGHLIGHTS: Domestic stocks ended higher after an extremely volatile week in the markets. Monday marked the peak of the volatility, with the CBOE Volatility Index (VIX) spiking as high as 46.34; the Dow experiencing its largest ever intra-day point decline; and, circuit breakers halting several trades amidst large swings in ETF prices. The equity markets subsequently recovered on Wednesday following a 6-day losing streak after positive indications on employment and hous...

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Endowment Index® Up For Week Ended 8/28/2015

The Endowment Index® calculated by Nasdaq OMX® (Symbol: ENDOW) finished a volatile trading week at 1,007.88 for the week ended Friday August 28, 2015, up from its previous close of 1,006.03 for the week ended Friday August 21, 2015. The Endowment Index® represents the investable opportunity for managers of portfolios utilizing the Endowment Investment Philosophy® or otherwise incorporate alternative investments within a comprehensive asset allocation strategy. The Endowment Index® measure...

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Top 10 things smart investors never say

With the market in flux, it's important to think rationally and practice patience. To accomplish that, here are 10 phrases you should NOT be telling yourself: I got a great stock tip from a friend of a friend.” – Herding “This time is different.” – New Era Thinking “I should have seen the crisis coming.” – Hindsight Bias “I check my account on the hour.” – Myopic Loss Aversion “This is can’t miss!” – Overconfidence “It just feels right.” – ...

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China Market Valuation Update

China Large and Small Cap Indices seem to be approaching longer term valuation levels. Also: China's margin debt is substantially lower. Outstanding margin debt on the Shanghai and Shenzhen stock exchanges fell to 1.25 Trillion Yuan on Monday from a record high of 2.27 Trillion Yuan on June 18th. Stock market peaked on June 12th. Large Cap Stocks estimated P/E ratio is approx. 10 which represents 2013 P/E 5 Year lows. While valuation multiples have contracted globally, the Chinese P/E mu...

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Perspective on Equity Market volatility

Bob Doll's comments on recent equity market volatility share many of our same viewpoints: Possible reasons for recent market decline: Multi-month decline in earnings Widening credit spreads Economic weakness from China/devaluation of the Yuan Slowing growth and commodity price weakness (deflation fears) Fed Policy uncertainty Market technicals Investor nervousness, skepticism, and uncertainty Near term thoughts- China's economy is slowing, but not enough to cause a glob...

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Various Recent Inflation Measures Trending towards 2%

There are various ways to measure inflation including the headline CPI, as below: CPI or Headline Inflation=0% Core CPI=1.8% Cleveland Median CPI=2.3% Sticky Price CPI by Atlanta Fed=2.2% Dallas Fed Trimmed Mean Personal Consumption Expenditures (PCE) preferred by FOMC=1.7% These are year over year numbers. Hence, despite the decline in commodity prices the Fed believes that inflation is heading towards its 2% target....

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Endowment Index® Down At Close For Week Ended 8/21/2015

The Endowment Index® calculated by Nasdaq OMX® (Symbol: ENDOW) finished trading at 1,006.03 for the week ended Friday August 21, 2015, down from its close of 1,054.24 for the week ended Friday August 14, 2015. The Endowment Index® represents the investable opportunity for managers of portfolios utilizing the Endowment Investment Philosophy® or otherwise incorporate alternative investments within a comprehensive asset allocation strategy. The Endowment Index® measures performance for a ...

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Endowment Wealth Management Weekly Capital Markets Update for Week Ended 8/21/2015

WEEKLY CAPITAL MARKET HIGHLIGHTS: Domestic stocks slid, despite positive leading economic indicators, such as jobless claims falling to their lowest levels in decades and strong existing home sales. This week’s pullback likely signals investors’ concerns about declining commodity prices, global growth pressure, and more dovish comments from the Federal Reserve than expected. Global markets fell, as investors remain concerned about future economic growth. Hong Kong and Taiwan indexes fe...

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Why we continue to own Emerging Market Stocks?

When we talk about emerging market equities today, we find that people are disappointed: there has been under-performance of late. Additionally, there remain key risks: • The U.S. Federal Reserve (Fed) raises short-term interest rates • Commodity prices decline While each of these well-publicized risks can contribute to further volatility, it’s also quite possible that they are already reflected in emerging market equity valuations today. Dividend Yield as a Barometer for Valuati...

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