Journey To Africa

 

In early January, Susan Byrne, Chairman and CIO, visited the western coast and central heart of Africa.  Read about her observances as they relate to the world economy.

 

 

Is the Sky Falling? 

How the Economic Expansion Can Continue Despite an Inverted Yield Curve

 

“The sky is falling! The sky is falling!” So believed Chicken Little of fairy tale fame. Were Chicken Little around today, he might be an investor watching the looming inversion of the Treasury yield curve.  And as is his nature, he might jump to the conclusion that this “acorn” foretells the end of economic prosperity and the impending doom of recession.  But, examining all of the evidence might lead him to deduce that this acorn (the inverted yield curve) is not a predictor of recession, but rather a result of global economic forces that will not lead us down the same path of economic history. 

 

 

The Importance of Dividends

 

In the days before the Great Depression and the Securities Exchange Act of 1934, an investor’s primary clue to deciphering a company’s financial well-being was the payment of dividends.  In these modern times, financial data is available 24/7 to anyone with a computer and a modem. Therefore, it becomes vital for investors to sift through the myriad of data to determine what data points will lead them to a successful investment.

 

 

2006 Capital Markets Outlook

 

Our thoughts on the economy in 2006 and how we derive our capital markets outlook.

 

 

Impact of Katrina

 

No one could have anticipated the tremendous devastation brought on by Hurricane Katrina.  Lost homes, lost lives, a lost way of life -- the impact of Hurricane Katrina is more than anyone could have ever imagined.  When the floodwaters recede and people start to rebuild, we will have a better understanding what to expect in the near term. 

 

 

The Impact of the Energy Policy Act of 2005

 

On August 8, 2005, President Bush signed "The Energy Policy Act of 2005," a 1700 page bill guaranteed to make anyone's head spin.  You've all heard the media accounts of what is in the bill, so we will focus on its impact to various industries and our portfolios.

 

 

First Half 2005 Review

 

The financial markets produced uneven returns during the first half of 2005.  Concerns over rising short-term interest rates and slowing economic growth kept equity investors in a relatively bearish mood, resulting in modest or no gains for the average investor.  However, long-term interest rates remained at much lower than expected levels and provided the stimulus for solid gains in interest rate sensitive assets, such as investment grade bonds and REITs.

 

 

The Interest Rate Conundrum

For anyone without access to a Magic 8 Ball, the interest rate environment has certainly been difficult to decipher over the past 12 months.  Although the Fed has been successful in raising short rates, investor expectations for the ability of the Fed to manage inflation were not changed and the yield curve has flattened as a result.  However, as recent market events show, we have seen a dramatic reversal in risk appetites and inflation expectations.   

 

Market Commentary Archives

 

 

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