financial weather watch Archives - Page 19 of 24

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.

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.

3 Bubble Warnings to Listen to Before It’s Too Late

It's time to listen to the best and brightest. The world's economies are stagnant or weakening while the stock market is overvalued. The time has come to be conservative. Most investment firms do not place importance on asset protection. Runnymede is an exception; we take asset protection very seriously. As such, we devote much time to market analysis and will make changes when necessary depending on our clients' objectives.

Here are 3 bubble warnings that experts are telling you to take note of right now.

Runnymede Receives Top US Captive Services Award For “Innovation in Investment Management”

Morristown, New Jersey — Runnymede Capital Management has been named winner of “Innovation in Investment Management” at the 2015 US Captive Services Awards. Runnymede is the only firm to have won a captive services award for four consecutive years having been previously named “Best Client Care in Investment Management” in 2012, 2013, and 2014. This is the first year that Runnymede has won “Innovation in Investment Management.”

The US Captive Services Awards recognize service providers to captive insurance companies who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months. The awards took place in Burlington, Vermont on the eve of the Vermont Captive Insurance Association’s (VCIA) annual conference – the largest captive insurance gathering in the United States. This year's awards drew a record number of firms submitted for nomination and included seventy four firms vying for top honors.

“Wide diversification is only required when investors do not understand what they are doing.”

– Warren Buffett

We've all heard the old idiom, “Don't put all your eggs in one basket.” For more than five decades, portfolio diversification has been considered a basic building block of any investment portfolio — with the critical function of reducing risk and dampening volatility. There is a trend toward what may be deemed over-diversification. Should you own a stock in your portfolio to dampen volatility or because of positive underlying fundamentals of a company?