The number of companies required to by index funds to effectively mimic the performance of the S&P 500 fell to an all-time low at year-end 2019 and has resumed its downtrend after a rally in 2020.

The narrowing of market breadth that this chart depicts now exceeds the previous low…

The velocity of money (the frequency at which money changes hands) sits near all-time lows and is again slowing, following a short-lived stimulus-induced boost in 2020.

The velocity of money reached a peak in the late 1990s before declining in response to the crash of the internet stock bubble. It…

The St. Louis FED Financial Stress Index is currently trading near its pre-COVID and not far above the levels seen just prior to the 2008 Financial Crisis. The index measures the level of financial stress in markets and is constructed from 18 measures of interest rates, yield spreads and other…

Stock market behaviour has regularly driven the valuation levels to both high and low extremes that suggest that focusing on valuation levels is not an optimal investment strategy. How often have we seen strong bull markets reward the purchase of objectively overpriced equities or seen bear markets punish buying demonstrably…

Identifying extremes of investor sentiment (and then taking a contrary position) has proven to be one of the most reliable techniques to generate superior long-term investment returns.

A useful gauge of sentiment has proven to be the subject of popular magazine covers, as they tend to reflect consensus opinion. Magazine…

The slashing of global interest rates to 5000-year lows has produced many consequences, not least to the pension fund industry, which is facing widespread. underfunding issues. The accompanying chart highlights some extreme examples. It is important to note that this issue is not confined to the United States but is…

Perhaps the defining characteristic of the bull market of recent years has been its exceedingly narrow breadth, rivaled only by the markets of the 1920s, the “Nifty Fifty” era of the early 1970s, and the internet bubble at the turn of the century.

All but the most casual market observer…

An unquenchable thirst for yield has been a major trend among investors over the past two decades. Rapidly ageing populations and the steadily declining yields offered by high-grade bonds have motivated many income-seeking investors to seek shelter in equity dividends.

Treasury bonds currently offer negative real yields while challenges to…