Posted by Jacqueline Bell on 02/13/2012
There has been a lot of buzz in the financial press in the last week about Facebook’s initial public offering (IPO). One of the most interesting articles appeared in the Wall Street Journal on February 4th. It compares an investment in Facebook with an 18th-century mathematical riddle called the St. Petersburg Paradox. In that riddle,…
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Posted by Jacqueline Bell on 10/03/2011
As is typical in periods of significant global macro anxiety, there ensued a flight to quality that pushed the price of Treasury bonds higher (Treasury bonds returned 2.78% for the month of August despite the loss of the AAA rating.) Therefore, to gauge the effect of volatility on long-term investors, Vanguard compared the performance of…
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Posted by Jacqueline Bell on 08/10/2011
A week ago, we wrote about tracking the House of Representatives’ passage of a compromise bill increasing the federal debt ceiling and decreasing spending, a bill that was eventually signed into law by President Obama. The ensuing six trading days saw extreme volatility in various markets, with equities worldwide trending lower. In just the eleven trading…
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Posted by Will Beamer on 08/04/2011
This past Sunday, after many weeks of contentious debate, the White House and Congressional leaders finally reached an agreement on a deal to raise the debt ceiling and reduce federal spending. The deal was subsequently approved by both houses of Congress on a bipartisan basis, and was signed into law by President Obama on Tuesday. …
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Posted by Jacqueline Bell on 03/23/2011
In the wake of negative comments made by high profile financial services analyst, Meredith Whitney, municipal bond prices have declined substantially in the last few months. Whitney claimed that there would be “50 to 100 sizeable defaults” by state and local governments in the near future. We have a different view. Historically muni bond defaults…
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Posted by Jacqueline Bell on 02/18/2011
Recent municipal bond market volatility has raised questions about the risks and rewards of investing in municipal bonds. Rising Treasury yields have weighed heavily on municipal bond prices. Negative press has helped lead to lower demand and higher redemptions in municipal bond funds. The media tend to focus on the most dramatic stories, such as…
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