The Fantastic Stochastic

The Fantastic Stochastic

  Stocks or bonds? It’s a simple question, but the answer isn’t always so simple. Most of the time, investors will want to own some of both. But when the evidence becomes strong enough, it can make sense to lean more heavily in one direction. So, how do we know...
Equity Tailwind

Equity Tailwind

  The stock market is not the economy. This is true. The two don’t always move together, especially in the short run. But we do find evidence that a strengthening economy can provide an important tailwind for stocks when conditions are right. When are conditions...
Searching for Inflation

Searching for Inflation

  Bonds. They’re kind of boring, right? Well, at least compared to stocks, they can be. Bonds rarely make headlines. They don’t have flashy earnings reports. And they don’t usually deliver the eye-popping returns that attract investors to the stock...
Making Bets

Making Bets

  Speculation. Is it good or bad for the stock market? Sometimes, it can be good. It’s a sign of optimism. But, as we know, too much of a good thing can be bad. So how do we know we’ve reached that point? Well, that’s what this week’s indicator—the NDR...
Big Mo Says No

Big Mo Says No

  This week we’re talking Big Mo. Big Momentum. It’s an important indicator because it encapsulates exactly the kind of process we prefer to use when building our models. That process is what we call the “weight of the evidence.” The idea is pretty...
Turning Up the Volume

Turning Up the Volume

  One of the hardest things about investing is separating healthy optimism from outright speculation. Markets need optimism to rise, but when investors become too eager to chase the next hot idea, that enthusiasm can eventually become a warning sign. This...