The Capital Spectator: Investing, Asset Allocation, and Economic Insights

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    <p>The connection between the economy and financial markets is a well-established concept, with insights about one often providing clues about the other. Nearly a century ago, William Hamilton <a href="http://www.amazon.com/gp/product/B009BOTN68/ref=as_li_tf_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B009BOTN68&amp;linkCode=as2&amp;tag=thecapitalspe-20">outlined the case</a><img decoding="async" src="http://www.assoc-amazon.com/e/ir?t=thecapitalspe-20&amp;l=as2&amp;o=1&amp;a=B009BOTN68" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;"/> for viewing stock market indices as a “soulless barometer” of broader economic trends. Since then, analysts have developed numerous benchmarks to quantify the relationship between macroeconomic factors and market movements. Recently, a new tool has emerged: The Capital Spectator Macro-Markets Risk Index (MMRI). This index measures fluctuations across four critical markets: equities, the Treasury yield spread, the credit spread, and oil prices.</p>
    <p> <a href="https://www.capitalspectator.com/introducing-the-macro-markets-risk-index/#more-2568" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/introducing-the-macro-markets-risk-index/" title="4:31 am" rel="bookmark"><time class="entry-date" datetime="2013-03-11T04:31:08-04:00">March 11, 2013</time></a>
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    <p>● <a href="http://www.amazon.com/gp/product/0691146969/ref=as_li_tf_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0691146969&amp;linkCode=as2&amp;tag=thecapitalspe-20">The Locust and the Bee: Predators and Creators in Capitalism’s Future</a><img decoding="async" src="http://www.assoc-amazon.com/e/ir?t=thecapitalspe-20&amp;l=as2&amp;o=1&amp;a=0691146969" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;"/><br/>By Geoff Mulgan<br/><a href="http://www.newstatesman.com/books/2013/02/reviewed-locust-and-bee-predators-and-creators-capitalisms-future-geoff-mulgan"><strong>Review</strong></a> via New Statesman<br/>In his work, Geoff Mulgan asserts, “Capitalism is not merely an aberration; it represents a step in an evolutionary path, containing within it some answers to its own contradictions.” This viewpoint aligns with a growing consensus, as recent advances in biology and genetics support the understanding of economic and political development through an evolutionary lens. Many authors have emerged, writing extensively on the evolution and growth of capitalism as part of a continuous social evolution process.</p>
    <p> <a href="https://www.capitalspectator.com/book-bits-3-9-13/#more-2567" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/book-bits-3-9-13/" title="4:13 am" rel="bookmark"><time class="entry-date" datetime="2013-03-09T04:13:39-05:00">March 9, 2013</time></a>
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    <p>In February, private-sector payrolls increased by 246,000, according to the Labor Department, marking the most significant rise since November. This is a notable jump from January's more modest increase of 140,000. The year-over-year growth rate for private payrolls held steady at just under 1.9%, consistent with recent trends. Additionally, the unemployment rate declined to 7.7%, reaching a post-recession low. While it might suggest robust growth in the labor market, this interpretation remains speculative. What is clear, however, is that the trend of moderate growth continues.</p>
    <p> <a href="https://www.capitalspectator.com/february-private-payolls-the-best-month-for-growth-since-november/#more-2566" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/february-private-payolls-the-best-month-for-growth-since-november/" title="9:38 am" rel="bookmark"><time class="entry-date" datetime="2013-03-08T09:38:09-05:00">March 8, 2013</time></a>
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    <p>Last week, jobless claims fell by 7,000 to a seasonally adjusted total of 340,000, approaching a post-recession low. Additionally, the four-week moving average of claims dropped to 348,750, reaching a five-year low. This significant decline offers a promising indication that the labor market is expected to experience continued growth in the near future.</p>
    <p> <a href="https://www.capitalspectator.com/4-week-average-of-jobless-claims-drops-to-5-year-low/#more-2565" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/4-week-average-of-jobless-claims-drops-to-5-year-low/" title="9:18 am" rel="bookmark"><time class="entry-date" datetime="2013-03-07T09:18:09-05:00">March 7, 2013</time></a>
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    <p>The Labor Department is projecting an increase of 214,000 in private nonfarm payrolls in their upcoming report. This forecast is slightly above the gains seen in January and exceeds several consensus predictions.</p>
    <p> <a href="https://www.capitalspectator.com/us-nonfarm-private-payrolls-feb-2013-preview/#more-2564" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/us-nonfarm-private-payrolls-feb-2013-preview/" title="4:35 am" rel="bookmark"><time class="entry-date" datetime="2013-03-07T04:35:15-05:00">March 7, 2013</time></a>
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    <p>The ADP Employment Report indicates that private-sector payrolls grew by 198,000 in February, a slight decrease from January's gain of 215,000. However, this solid increase instills confidence that the Labor Department's report will also reveal a month of steady job growth for February.</p>
    <p> <a href="https://www.capitalspectator.com/adp-payrolls-increased-198000-in-february/#more-2563" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/adp-payrolls-increased-198000-in-february/" title="9:15 am" rel="bookmark"><time class="entry-date" datetime="2013-03-06T09:15:00-05:00">March 6, 2013</time></a>
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    <p>Recently, the Dow Jones Industrial Average hit an all-time high <a href="http://www.guardian.co.uk/business/2013/mar/05/dow-jones-record-high-budget">yesterday,</a> and the S&P 500 is also nearing a new peak. However, a rising equity market alone does not signify the end of economic abnormality just yet. Although the correlation between the market's inflation forecast and stock prices appears somewhat weakened, it is too early to declare that the connection has been severed.</p>
    <p> <a href="https://www.capitalspectator.com/stocks-inflation-the-end-of-an-abnormal-affair/#more-2562" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/stocks-inflation-the-end-of-an-abnormal-affair/" title="6:17 am" rel="bookmark"><time class="entry-date" datetime="2013-03-06T06:17:54-05:00">March 6, 2013</time></a>
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    <p>A significant concern for investors in the near future is the anticipated rise in interest rates. With borrowing costs at historically low levels, the question arises: what actions should be taken now? The straightforward answer is to maintain your current strategy, provided it emphasizes diversification across the <a href="https://www.capitalspectator.com/wp-content/uploads/wp-content/uploads/2013/03/major_asset_cla_22.html#more">major asset classes</a> coupled with a solid rebalancing strategy. Some analysts argue that more drastic measures are necessary, suggesting that current conditions are unique, thus requiring a revised approach. Yet, despite changing circumstances, a prudent method of broad asset allocation and rebalancing <a href="https://www.capitalspectator.com/wp-content/uploads/wp-content/uploads/2013/01/asset_allocatio_6.html">generally yields average to above-average results</a> compared to portfolios striving for superior performance.</p>
    <p> <a href="https://www.capitalspectator.com/asset-allocation-higher-interest-rates/#more-2561" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/asset-allocation-higher-interest-rates/" title="6:22 am" rel="bookmark"><time class="entry-date" datetime="2013-03-05T06:22:36-05:00">March 5, 2013</time></a>
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    <p>The automatic budget cuts that began on March 1 pose potential threats to economic growth; however, recession risks remain low based on the latest economic and financial data. When asked about the possible macroeconomic impact of the sequester, House Speaker John Boehner stated, “I don’t know whether it’s going to hurt the economy or not. I don’t think anyone quite understands how the sequester is really going to work.” Despite differing opinions, the consistent forward momentum of the economy, as indicated by current data, appears to remain intact.</p>
    <p> <a href="https://www.capitalspectator.com/us-economic-profile-3-04-13/#more-2560" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/us-economic-profile-3-04-13/" title="1:25 am" rel="bookmark"><time class="entry-date" datetime="2013-03-04T01:25:50-05:00">March 4, 2013</time></a>
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    <p>● <a href="http://www.amazon.com/gp/product/076416564X/ref=as_li_tf_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=076416564X&amp;linkCode=as2&amp;tag=thecapitalspe-20">The Affluent Investor: Financial Advice to Grow and Protect Your Wealth</a><img decoding="async" src="http://www.assoc-amazon.com/e/ir?t=thecapitalspe-20&amp;l=as2&amp;o=1&amp;a=076416564X" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;"/><br/>By Phil DeMuth<br/><strong>Excerpt</strong><br/>Investors often boast about their portfolio gains without disclosing the risks they’ve taken, which can remain hidden. While returns are easily measured, risks are the unseen obstacles, much like icebergs lurking beneath the surface. Imagine if risk visibility were reversed: if you could see the risk involved in your investments every minute, but learned about returns annually. This change could encourage smarter investment behaviors. Unfortunately, the reality is different; we focus on visible performance—the immediate returns—due to an <em>availability bias</em>. Thus, the astute investor keeps a vigilant eye on risk, especially when it’s not apparent.</p>
    <p> <a href="https://www.capitalspectator.com/book-bits-3-2-13/#more-2559" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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    By James Picerno | <a href="https://www.capitalspectator.com/book-bits-3-2-13/" title="1:58 am" rel="bookmark"><time class="entry-date" datetime="2013-03-02T01:58:02-05:00">March 2, 2013</time></a>
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