The question on investor’s minds is how will the markets react to the elections next month and will a contested election result in more volatility? We have already seen much volatility in the markets with large daily swings. Most experienced investors feel that markets are overvalued and don’t reflect economic conditions. We believe that in the near-term (5 years or less), markets will remain volatile and that some sectors are overvalued while others are undervalued. These volatile days/weeks create buying opportunities because in the long-term, we believe that stocks are the best investment to save for retirement and to beat inflation.

It is not uncommon for corporations to own stock in other corporations. The ownership could be either through an acquisition or the creation of a new corporation by the parent company. Sometimes, for various reasons, the parent company wants to separate their ownership in the subsidiary corporation, most of the time it’s because the subsidiary is in an unrelated business from the parent or the subsidiary has more growth prospects as a separate company from the parent. That separation from the parent corporation can be either through a spin-off, split-off, split-up, carve-out, or simply a sale of the subsidiary. This article will focus on the first three and briefly discuss a carve-out; a sale of a corporation is straightforward and will not be covered. 

In each episode of the ACap ReCap, we go beyond the blog to answer your financial questions. Ara & Matt explain the differences between investing in individual stocks (like Disney, Apple, or Google) versus funds (such as ETFs like an S&P 500 index fund or NASDAQ fund), and what makes for a good investment portfolio.

In today’s competitive job market, where the top companies are competing for the top talent, employers use every tool at their disposal to attract and retain the best of the best. More and more often, these compensation packages go way beyond salary and factor in other employee benefits, such as top of the line health insurance plans, a 401(k) plan with a company match, and for those in the more senior roles, shares of company stock in the form of Restricted Stock Units.

With the stock market hitting all time highs each day, investors are wondering if a recession is imminent. Some predict a recession is going to happen in 2020 while others think a recession will occur before year-end 2019. First, let’s define what a recession is and what it is not. By definition, a recession is two consecutive quarters of negative GDP (Gross Domestic Product). A recession is not a sharp decline in the stock market or consecutive months of negative returns in the stock market. The stock market is only one of many leading economic indicators. So how can we spot the next recession before it happens and protect our portfolios? The short answer is you cannot predict the market or the economy, but you can monitor key economic indicators to see where we are in the business cycle. The business cycle is the natural progression of the economy and consists of four phases: expansion, peak, recession, and recovery. Knowing where we are in the business cycle helps us make informed investment and business decisions. Below are explanations of each phase in the cycle in their order of occurrence.  

In recent years, more and more investors are selecting Exchange Traded Funds (ETFs) over mutual funds. But what exactly is an ETF, and how do they differ from the traditional mutual fund? Modern Portfolio Theory (invented by Nobel laureate Harry Markowitz) states that in order to minimize risk, investors should hold a portfolio of many uncorrelated (unrelated) stocks, similar to the expression “don’t put all of your eggs in one basket.” The problem with MPT is that the average investor would need a lot of money and time to create such a diversified portfolio. Mutual funds and ETFs solve this limitation by allowing investors to gain immediate diversification by combining their funds together.

Markets have been extremely volatile in the last few months, and while it’s true that volatility is normal and even healthy, it doesn’t necessarily mean it is a welcome occurrence for everyone. However, that unpredictability can be used as a tool to help you evaluate your true risk tolerance to prepare yourself and your portfolio going forward.

Despite the recent gyrating stock market, the economy is still doing quite well based on many indicators. Since October 2018, the stock market is down over 10 percent and in some sectors down almost 20 percent. Does this mean we are entering a recession? A recession is technically defined as a period where Gross Domestic Product (GDP) declines in two consecutive quarters. GDP is the total revenues earned by a country for a given period of time. Based on the factors mentioned below, many of the current economic indicators do not point towards a recession in the near future. That’s not to say a recession will not occur at some point.