Morristown, New Jersey, September 30, 2015 – Christopher Wang and Andrew Wang of Runnymede Capital Management have been named among BrightScope’s Top 100 Most Social Financial Advisors in the United States. The list recognizes the top advisors with significant online influence. Among seven New Jersey based advisors named, Christopher Wang and Andrew Wang topped the list at 42nd and 47th, respectively, followed by Sheri Cupo of SageBroadview Financial Planning (54), Gopal Gantayat of The Free Investors (73), Dan Crimmins of Crimmins Wealth Management (85), Brendan Thomas Mullooly of Mullooly Asset Management (88), and Thomas Froehlich of American Portfolios Advisors (95).
The Fed Shows Their Next Recession Plan: Negative Interest Rates
While many economists have been (incorrectly) predicting a September rate hike from the Fed, Runnymede has been saying that the Fed won't hike rates since the beginning of the year and with recession on the horizon believe that there may be no rate hike in 2016 either.
With growth slowing around the world and inflation at zero, the Fed is unlikely to move rates off the zero level. In any case, the most surprising news from the September FOMC meeting is that one member predicted negative rates in 2015 and 2016! Yes you read that correctly. While the majority of the Fed is still predicting (poorly) a rate hike in 2015, there is one member that wants to go to negative rates. In Europe, the Swiss, Swedish and Danish central banks already have negative rates to stave off the risk of deflation.
Top 3 Things I Learned at Runnymede This Summer
The following post was written by our summer intern, Avery. We enjoyed having such a sharp, energetic, and well-adjusted young man help us with various projects and share his fresh perspectives. We wish him lots of success in his senior year of high school and all future endeavors.
My name is Avery Bicks. I am seventeen years old, and I attend the Collegiate School on the Upper West Side of Manhattan. After taking an introductory course in Macroeconomics during the fall of my junior year, I immediately became interested in learning more about the economy and different investment strategies. My desire and need for more knowledge became more pronounced when my friends and I signed up for the stockmarketgame.org, where we saw our portfolio, well, crash and burn. Despite my shortcomings in the stock market game, I wanted an opportunity to learn from the best in order to sample the real business world and learn more about investing. Fortunately, this summer I was able to intern at Runnymede Capital Management where Sam, Andy, and Chris taught me more about portfolio mangement and the economy than I could learn in a whole year of school. Here are three major points that I took away from my time at Runnymede this summer.
What is Your Strategy in Volatile Markets?
World stock markets have been increasingly volatile this summer. Returns for market indices have turned negative and the S&P 500 suffered its first 10% correction since 2012. Because of this, I have received several message in my inbox that ponder what do in this environment. A couple of the titles were “”What you should do in volatile and uncertain markets”” and “”When market conditions become volatile, how will you react?”” The two main strategies that they suggest are 1) stay the course and 2) a diversified portfolio is the best way to be positioned. While this seems sensible in a bull market cycle, these two strategies do not work in a bear market cycle. Therefore, the most important question is not what to do in a volatile market, but is this a bear market?
https://www.youtube.com/watch?v=DH6V2yp4ty0
They Say Recovery, We Say Recession
How is the economy doing currently? Not well. The United States has had two recessions in the 21st century, in 2001 and 2008/9. Our prognosis is that the US economy is losing steam quickly and the third recession is getting near. Let’s look at the cost of money, raw material and labor. Due to a lack of demand, all current indications are that interest rates, commodity prices and real wages will continue to fall.
S&P earnings to suffer annual decline for first time since 2008
At Runnymede, we firmly believe that earnings matter. It's earnings that drive stock prices higher or lower over the long term. So it is important to monitor what is happening to the overall earnings picture. In February, I wrote a blog post entitled, Where have all the (S&P) earnings gone? Back then street estimates had been reduced significantly but still predicted 5% growth for 2015.
Today the earnings picture is clearer with most of the S&P 500 constituents having reported for the first half. The results aren't pretty. Thanks to the crash in energy prices and the strong US Dollar, S&P 500 earnings declined in the first half and are on pace for their first year over year decline since 2008. In hindsight, S&P earnings experienced peak earnings in the 3rd quarter of 2014 with a record high 10.1% operating margin; and have been declining thereafter.