COVID-19 vaccination update The good news: COVID-19 cases and hospitalizations have improved recently in the U.S. As of February 15, 2021, 54.6 million doses have been given. An average of 1.64 million doses per day are being administered. The bad news: Infections of the more contagious variant from the U.K. are doubling every 10 days in the U.S. This mutant strain may reverse the positive trends that have occurred since January 9, 2021. More infections would slow the reopening of the economy and be a headwind for job creation. Retail trading: Froth and frenzy Retail investors are bidding up so-called “meme” stocks…
Insights & Advice
Allen Harris
CAPITAL IDEAS: Passive investing
According to AAII’s calculations, the Russell 1000 Growth Index posted an average annual gain of 17 percent for the entire decade of the 2010s. That compares to a 10 percent return for the Russell 1000 Value Index. Holding a balanced portfolio throughout that decade would have been prudent. A balanced portfolio would have been more diversified and, theoretically, safer. However, that prudent, safer portfolio would have underperformed its more reckless counterpart. It is a worthwhile exploration to elucidate why this occurred. At least two of the reasons that drove the outperformance of growth relative to value are still applicable today. Those…
Capital Ideas: Politics unusual
COVID-19 Vaccination Update As of February 2, 2021, 32.8 million Americans have now received at least one dose of a COVID-19 vaccine. That was more than those who tested positive for the virus. The average daily rate of vaccinations has reached 1.34 million doses per day. The average daily rate may be affected by the snowstorms of last week, but it seems to be trending upward. Trading a Pullback Valuations are staggeringly high. Nonetheless, I remain invested in equity for the portion of my portfolios intended for that. Despite sky-high valuations, I am hesitant to take bold defensive moves. I…
Capital Ideas: A happy market
“My level’s too high to bring me down. Can’t nothing, bring me down, I said clap along if you feel like a room without a roof.” —Pharrell Williams Investors are not worried about sky-high stock valuations or contrarian sell signals, such as over-optimistic buyers. Throughout the previous two months, I’ve said a) I am concerned that the U.S. equity market is overextended, but b) instead of getting defensive, I will react to any correction by rebalancing to increase exposure to stocks of U.S.-based, small-capitalization companies and the emerging markets. The good news is that I have exposure to both of…