2018-02-03 07:42:00 Sat ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
Quant Quake 2.0 shakes investor confidence with rampant stock market fears and doubts during the recent Fed Chair transition from Janet Yellen to Jerome Powell. This healthy fundamental recalibration indicates the recent fact that 96% of all S&P 500 stocks experience 20% drastic declines from their own 52-week high share prices. Key investor concerns relate to U.S. inflationary momentum and bond yield appreciation. As professional forecasters mull over the inexorable and mysterious trade-off between inflation and unemployment, the new Federal Reserve chairman tends to retain a hawkish monetary policy stance. These forecasters predict that the Federal Reserve may hike the interest rate at least 3 to 4 times this year. This neutral interest rate curtails U.S. inflation near full employment well within Powell's congressional dual mandate.
AQR money manager and founder Cliff Asness points out that the U.S. financial system remains robust with less leverage and fair valuation despite the recent stock market plunge in early-February 2018. Asness believes in his conservative implementation of quantitative fundamental strategies across the vast majority of his factor portfolios of stocks, bonds, commodities, and currencies.
His favorite value and momentum factor strategies resonate with Warren Buffett's long-term asset investment philosophy: *Price is what we pay, and value is what we get. We should be fearful when others are greedy, and we should be greedy when others are fearful.* In his recent letter to Berkshire Hathaway shareholders, Warren Buffett emphasizes that stock market corrections are often both normal and unpredictable. From a long-run perspective, the U.S. stock market sometimes goes *on sale*. Thus, Buffett suggests that it is important for investors to replenish their cash positions in order to take advantage of sporadic stock market corrections. When these corrections take place, the stock price often fall below the long-term equilibrium intrinsic value. Beyond conventional wisdom, greed is *good* and pays well in the tripartite form of capital gains, cash dividends, and share repurchases.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2023-06-28 09:29:00 Wednesday ET

Carmen Reinhart and Kenneth Rogoff delve into several centuries of cross-country crisis data to find the key root causes of financial crises for asset marke
2025-02-02 11:28:00 Sunday ET

Our proprietary alpha investment model outperforms most stock market indexes from 2017 to 2025. Our proprietary alpha investment model outperforms the ma
2023-09-07 11:30:00 Thursday ET

Michael Woodford provides the theoretical foundations of monetary policy rules in ever more efficient financial markets. Michael Woodford (2003)  
2019-05-13 12:38:00 Monday ET

Brent crude oil prices spike to $70-$75 per barrel after the Trump administration stops waiving economic sanctions on Iranian oil exports. U.S. State Secret
2018-08-31 08:42:00 Friday ET

We share several famous inspirational stock market quotes by Warren Buffett, Peter Lynch, Benjamin Graham, Ben Franklin, Philip Fisher, and Michael Jensen.
2019-01-21 10:37:00 Monday ET

Andy Yeh Alpha (AYA) AYA Analytica financial health memo (FHM) podcast channel on YouTube January 2019 In this podcast, we discuss several topical issues