My Latest: Why a Retirement Portfolio Checkup is Essential Now
This Week’s Takeaways:
- The January CPI report came in cooler than expected and we’re down to 2.4%
- Private equity may offer attractive long-term returns, but success depends heavily on careful manager selection, diversification, and an investor’s ability to tolerate higher fees and illiquidity.
- Individual institutional investors underperform more informed traders and improving outcomes requires disciplined, long-term strategies rather than frequent trading.
- The U.S. economy may continue expanding healthily overall even as labor market weakness persists and complicates the broader growth picture.
- Latest Book Recommendation
- Things to Do This Weekend in Boston
January CPI: An Encouraging Start to the Year by Wells Fargo
The January CPI report came in slightly cooler than expectations. Core CPI rose 0.30% amid a big jump in airfares that was offset by softer-than-expected readings for used cars and primary shelter. Headline and core CPI inflation on a year-ago basis slipped to 2.4% and 2.5%, respectively, with the latter posting its lowest reading since March 2021. For the Fed, a March rate cut looks highly unlikely, but the continued gradual pace of disinflation should keep prospects for additional rate cuts alive for later in the year.
An optimistic but measured outlook for private equity by Vanguard
Private equity is expected to deliver solid long-term returns, particularly for investors who focus on high-quality managers and maintain disciplined investment standards. However, outcomes vary widely across funds, making careful manager selection, diversification, and thoughtful liquidity planning critical to success. While the asset class may offer return advantages over public markets, its higher fees, complexity, and illiquidity mean it is best suited for investors who understand and can tolerate those trade-offs.
Corporations Are Winning the Stock Market. Here’s a New Plan for Everyone Else by Morningstar
Retail and many institutional investors tend to underperform compared with firms and well-informed market participants, often showing one of the weakest trading records in the stock market. A recent study suggests this performance gap reflects differences in information, behavior, and execution, and highlights systematic challenges for individual investors. The article lays out practical approaches for non-corporate investors to improve outcomes, emphasizing better disciplines, long-term focus, and avoidance of common trading pitfalls.
Unprecedented ‘Jobless Boom’ Tests Limits of US Economic Expansion by Bloomberg
The U.S. economy is projected to maintain solid overall expansion even though job creation remains unusually weak, drawing parallels to past “jobless recoveries.” Forecasts suggest strong GDP growth for 2025, but the disconnect between output and employment highlights underlying fragilities in the labor market and broader economy. This divergence underscores tensions in the current expansion and raises questions about how sustainable growth is without robust hiring.
Book Recommendation
The Proving Ground: A Lincoln Lawyer Novel by Michael Connelly
From #1 New York Times bestselling author Michael Connelly, the Lincoln Lawyer is back with a case against an AI company whose product may have been responsible for the murder of a young girl.
