Rockbridge Institutional – March 2024 Market Review
Nvidia: A Bubble or Rational Exuberance Clearly, the stock market is positive on the future of Artificial Intelligence (AI). The trajectory of Nvidia, a company engaged in the production of products for the industry, is especially a case in point. Its stock price has nearly doubled since the first of the year – up 220% […]
Rockbridge Institutional – February 2024 Market Review
The Path of Future Interest Rates The future path of interest rates is high on the list of what worries markets today. We can gain some insight by anticipating the Fed’s response to changes in the economic landscape and by looking at the pattern of yields on bonds across various maturities. The Fed has the […]
Rockbridge Institutional – January 2024 Market Review
The Price Earnings (P/E) Ratio The P/E ratio is used by analysts to establish a company’s expected value. Multiplying either reported or projected earnings by this ratio gives an indication of this value. It provides a perspective on current stock prices. The PE ratio is the price per share divided by earnings per share. It […]
Rockbridge Institutional – December 2023 Market Review
Year in Review After plenty of ups and downs throughout the year, financial markets turned in reasonable results in 2023 – a globally diversified stock portfolio was up 16%, a reasonable proxy for bonds (Barclays Aggregated Bond Index) returned 6%. News on several fronts helps to explain this year’s results: Interest Rates, Inflation and Prospects […]
Rockbridge Institutional – November 2023 Market Review
Investing in the “Magnificent Seven” Now the leading high-tech companies are the “Magnificent Seven” (those of a certain age will relate). These companies – Apple, Alphabet (Google), Amazon, Meta (Facebook), Microsoft, Nvidia, and Tesla – make up about 30% of the S&P 500 index. While it is a stretch to expect an investor is lucky […]
Rockbridge Institutional – October 2023 Market Review
Interest Rate Risk in Bonds Rapidly rising interest rates explain bond market losses in recent periods. The Bloomberg U.S. Aggregate Bond Index, a reasonable proxy for the U.S. bond markets, is off 4% over the past three months, confirming that bonds are risky. Bond risk is from two sources primarily – credit risk and interest […]
Rockbridge Institutional – August 2023 Market Review
“Irrational Exuberance” and Market Pricing The price of Nvidia stock, a software design and development firm that manufactures chips integral to the gaming industry and, consequently, a proxy for Artificial Intelligence (AI), skyrocketed from $142 per share on December 30 to $494 per share today – a gain of over 230%. Does this increase in […]
Rockbridge Institutional – July 2023 Market Review
Inflation and a “Soft Landing” Inflation expectations and the economic impact of the Fed’s ratcheting up its Target Interest Rate has been a major source of uncertainty. So far, the trajectory of inflation has been in the right direction and unemployment has remained low. The trailing 12-month change in the Consumer Price Index (CPI) has […]
ROCKBRIDGE INSTITUTIONAL – June Market Review
Predicting Future Prices If we could predict future prices for financial assets, then investing would present no problems. As Will Rogers tells us: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” Unfortunately, it doesn’t […]
ROCKBRIDGE INSTITUTIONAL – May Market Review
Stocks Stock markets are volatile waiting for some resolution of today’s uncertainties, which include not only the Debt Ceiling, but also the banking system, the trajectory of interest rates and the Fed’s perseverance, inflation expectations and the prospect for a recession. Monthly stock returns are mixed – Domestic stocks are little changed; international stocks are […]