3 Leading Indicators for Markets – Why FedEx’s Latest Release is a Big Signal

FedEx’s latest preliminary earnings release sent the stock down 21.4% on Friday, September 16th as management withdrew their forecast on worsening business conditions. The news of forecasts being pulled at FedEx helped send the broad S&P down 0.72% because FedEx is a key company in the transportation industry and a component of the Dow Jones […]

Why Now is a Great Time to Build a Globally Diversified Portfolio

U.S. stock market valuations are beginning to excite me again after this year’s fall of 15.3% from 52-week highs. Even more so, developed markets across the globe are all hurting in the rising interest rate environment with valuations that compare favorably to U.S. markets as this article will explore. Broad European indices trade at 11.6x […]

Contribution Margin and Unit Economics in Investing

Contribution margin is used in both investing and management accounting to make decisions regarding profitability, project feasibility, and unit economics. Contribution margin measures the incremental income associated with each additional unit of production. Particularly when investing in growth companies, contribution margin and unit economics should be analyzed very closely to understand the scalability of the […]

Purchase Managers Index (PMI) as a Leading Indicator of Economic Growth

The Purchase Managers Index (PMI) is a great economics tool for investors to wrap their heads around as it can be watched as a leading indicator of changes in the economy. The changes in PMI data can indicate many things including changes in GDP, inflation, and employment which can all be used when making investment […]

Extended DuPont Analysis of Return on Equity – CFA Level I

The Extended DuPont analysis, also known as the 5-step DuPont equation, breaks down the already impressive DuPont model further. For investors, the Extended DuPont analysis is important because it will signify how leveraged a company is to the business cycle, financial markets, as well as government tax policy. Using the DuPont model can allow investors […]

The Misery Index is at 12.7%, Highest Since 1970’s

The misery index in economics is used to describe the severity of the negative effects of inflation and unemployment on the population. The misery index is the combination of adding together the inflation rate and the unemployment rate. Let’s explore what the misery index means, its history, and how investors can mitigate the effect on […]

Hawkish vs. Dovish and Why Investors Should Watch For Cues

Monetary policy, and the people who decide on it, are often described as hawkish or dovish depending on whether the proposed policy is restrictive or stimulative, respectively. As we will touch on later, restrictive monetary policy and higher interest rates have a twofold effect on stock valuations and investors should learn to watch for cues. […]

What is Tapering in Finance and the Taper Tantrum of 2013?

The word tapering is getting mentioned a lot in the news these days as central banks are starting to tighten monetary policy. What does it mean when a central bank discusses tapering and how might it affect markets? What was the Taper Tantrum of 2013 I keep hearing being mentioned? This article will take a […]

Top-Down Analysis – The Big Picture

Top-down analysis is an investing approach that examines the big picture of macro factors in the economy such as interest rates, GDP growth, inflation, employment, default rates, and taxes. These macroeconomic factors are critical to choosing which countries, asset classes, and industries to allocate investments to. It is important for investors to be aware of […]

Secular Trend Definition and Examples

Secular is the term used to describe trends that are long-term in nature and not affected by short-term seasonal, cyclical, or economic factors. Secular trends are driven by fundamental changes in critical areas such as technology, politics, and demographics, as well as societal changes which drive consumer behavior. While secular trends are expected to continue […]