Capital Spectator: Investing, Asset Allocation, and Economic Insights

<div class="entry-content">
    <p>When it comes to money management, theory and practice often clash. Strategies that look promising in theory can face numerous real-world challenges, such as transaction costs, human errors, and the unpredictability of the future. Yet, some models stand out as effective portfolio strategies. Among the most effective is the <a href="http://www.edhec-risk.com/latest_news/featured_analysis/RISKArticle.2011-11-15.4803?newsletter=yes">global minimum variance portfolio (GMVP)</a>, which aims to achieve the lowest possible volatility through a specific selection of assets. This method challenges modern portfolio theory, which emphasizes constructing ‘optimal’ portfolios that aim to maximize expected returns for a given level of risk. Interestingly, many empirical studies indicate that portfolios focused on minimizing volatility can outperform traditional approaches. Therefore, it’s beneficial to assess how your current portfolio measures up against a GMVP strategy.
    <br/><a href="https://www.capitalspectator.com/testing-the-global-minimum-variance-portfolio/#more-3515" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/testing-the-global-minimum-variance-portfolio/" title="11:42 am" rel="bookmark"><time class="entry-date" datetime="2014-04-25T11:42:38-04:00">April 25, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>The most recent housing data presents a somewhat optimistic picture for this critical sector. New housing starts and residential building permits for March are higher than recent lows, although the growth has been slow compared to the rapid increases seen from 2011 to early 2013. This is the silver lining amidst declining home sales, which recently hit their lowest levels in nearly two years. Existing home purchases have dropped significantly, and new home sales slipped to a nine-month low in March.
    <br/><a href="https://www.capitalspectator.com/will-the-weak-housing-market-pinch-the-economy/#more-3511" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/will-the-weak-housing-market-pinch-the-economy/" title="10:56 am" rel="bookmark"><time class="entry-date" datetime="2014-04-24T10:56:15-04:00">April 24, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>The manufacturing sector is well-known for its sensitivity to economic cycles. Employment trends within manufacturing typically react more swiftly to economic downturns than overall payroll figures. Thus, observing this portion of the labor market serves as a vital measure to gauge broader economic trends. Fortunately, the latest data suggests promising economic growth in the near future.
    <br/><a href="https://www.capitalspectator.com/manufacturing-employment-signals-economic-growth/#more-3507" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/manufacturing-employment-signals-economic-growth/" title="10:30 am" rel="bookmark"><time class="entry-date" datetime="2014-04-23T10:30:04-04:00">April 23, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>Could the gradual decline in consumer price inflation in the United States have reached its lowest point? If this is the case, it might be favorable news for the economy. A cautious “yes” applies in both instances, although with the standard considerations. Data regarding the core consumer price index through last month indicates a possible floor around the 1.6% mark. While we cannot confirm this until future updates come in, there's a growing belief that we may have seen the lowest point. If this is true, it would represent a positive shift in the economic landscape.
    <br/><a href="https://www.capitalspectator.com/is-us-inflation-headed-higher/#more-3504" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/is-us-inflation-headed-higher/" title="11:04 am" rel="bookmark"><time class="entry-date" datetime="2014-04-22T11:04:27-04:00">April 22, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>I am always on the lookout for rebalancing opportunities—especially those moments when the potential for success in specific ETFs seems particularly high. Instances of obvious buying or selling are uncommon, and when they do occur, the <del datetime="2014-04-21T12:20:24+00:00">free</del> low-cost opportunities do not last long. Therefore, it is crucial to regularly monitor market fluctuations to seize opportunities before they disappear.
    <br/><a href="https://www.capitalspectator.com/ranking-etfs-on-momentum/#more-3498" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/ranking-etfs-on-momentum/" title="12:45 pm" rel="bookmark"><time class="entry-date" datetime="2014-04-21T12:45:43-04:00">April 21, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>● <a href="http://www.amazon.com/gp/product/0670025658/ref=as_li_qf_sp_asin_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0670025658&amp;linkCode=as2&amp;tag=thecapitalspe-20">Risk Savvy: How to Make Good Decisions</a><img decoding="async" style="border: none !important; margin: 0px !important;" alt="" src="http://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&amp;l=as2&amp;o=1&amp;a=0670025658" width="1" height="1" border="0"/><br/>By Gerd Gigerenzer<br/><strong><a href="http://www.us.penguingroup.com/nf/Book/BookDisplay/0,,9780670025657,00.html?Risk_Savvy_Gerd_Gigerenzer">Summary</a> via publisher, Viking</strong><br/>In an era dominated by big data, many believe that our forecasting abilities have never been better. However, risk expert Gerd Gigerenzer argues that in reality, we often achieve better outcomes with simple rules and a less-is-more approach. In *Risk Savvy*, Gigerenzer points out that many, including professionals like doctors, lawyers, and financial advisors, often misunderstand statistics. This misunderstanding can leave individuals misinformed and vulnerable. Nonetheless, hope remains: anyone can learn to improve decision-making in areas such as health, finances, and business without needing an expert's guidance, and Gigerenzer offers accessible strategies to achieve this.
    <br/><a href="https://www.capitalspectator.com/book-bits-4-19-14/#more-3484" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/book-bits-4-19-14/" title="4:31 am" rel="bookmark"><time class="entry-date" datetime="2014-04-19T04:31:22-04:00">April 19, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>The Chicago Fed National Activity Index (CFNAI) for the three-month average is anticipated to see a slight decline to -0.26 in the upcoming March update, set to be released on Monday (April 21). The previous month reported a three-month average of -0.18, which indicates relatively weak economic growth. According to Chicago Fed guidelines, values below -0.70 suggest an “increasing likelihood” of an impending recession. Based on current estimates for March, the CFNAI’s three-month average is projected to remain at a level historically linked to growth, albeit at a moderate and below-trend pace.
    <br/><a href="https://www.capitalspectator.com/chicago-fed-natl-activity-index-mar-2014-preview/#more-3495" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/chicago-fed-natl-activity-index-mar-2014-preview/" title="12:55 pm" rel="bookmark"><time class="entry-date" datetime="2014-04-18T12:55:35-04:00">April 18, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>Despite earlier pessimism, most key economic reports for March are in, and they convey a generally uplifting message… yet again. While nothing is ever definitive regarding business cycles in real-time, the current data strongly suggests that recent fluctuations in economic reports were merely temporary setbacks in what remains a trajectory of moderate growth.
    <br/><a href="https://www.capitalspectator.com/us-economic-profile-4-18-14/#more-3485" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/us-economic-profile-4-18-14/" title="4:22 am" rel="bookmark"><time class="entry-date" datetime="2014-04-18T04:22:08-04:00">April 18, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p><em>In the coming days, I’ll be sharing excerpts from my new book–<a href="http://www.amazon.com/gp/product/1492923850/ref=as_li_qf_sp_asin_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=1492923850&amp;linkCode=as2&amp;tag=thecapitalspe-20">Nowcasting The Business Cycle: A Practical Guide For Spotting Business Cycle Peaks Ahead Of The Crowd</a><img decoding="async" style="border: none !important; margin: 0px !important;" alt="" src="http://ir-na.amazon-adsystem.com/e/ir?t=thecapitalspe-20&amp;l=as2&amp;o=1&amp;a=1492923850" width="1" height="1" border="0"/>. Let's kick off with an obvious starting point… the introduction.</em>
    <br/><a href="https://www.capitalspectator.com/book-excerpt-nowcasting-the-business-cycle/#more-3490" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/book-excerpt-nowcasting-the-business-cycle/" title="7:13 pm" rel="bookmark"><time class="entry-date" datetime="2014-04-17T19:13:13-04:00">April 17, 2014</time></a>
</footer><!-- .entry-meta -->

<div class="entry-content">
    <p>Various economic indicators suggest that the moderate pace of expansion, which faced challenges in January and February, gained momentum last month. For instance, the recent industrial output figures showed a 0.7% increase in March—a gain that translates to a respectable annual increase of 3.8%. While housing starts may still appear precarious, the majority of other significant indicators at the end of the first quarter suggest growth. Additionally, stable inflation expectations combined with a rising stock market offer further evidence to adopt an optimistic outlook regarding macroeconomic trends.
    <br/><a href="https://www.capitalspectator.com/a-bullish-disconnect-between-stocks-inflation/#more-3482" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
</div><!-- .entry-content -->

<footer class="entry-meta">
    By James Picerno | <a href="https://www.capitalspectator.com/a-bullish-disconnect-between-stocks-inflation/" title="11:27 am" rel="bookmark"><time class="entry-date" datetime="2014-04-17T11:27:36-04:00">April 17, 2014</time></a>
</footer><!-- .entry-meta -->