Diversified Digest: June 19

June 19th, 2017 | posted in: Insights

by: Jason Lioon

Diversified Trust’s investment team brings you headlines of note for the week.  Click on the links to access the articles. 

We have had eight full years of expansion following the financial crisis, so it’s only natural to start thinking about the next downturn.  However, economic expansions don’t die of old age – historically they have been ended by domestic imbalances, international shocks, and Fed tightening.

Of course, the Fed continued raising interest rates last week, bringing the Fed Funds target range to 1-1.25%.  This was widely expected, as the Fed is attempting to bring rates more in line with historical norms.  Relatively strong economic data has generally supported these moves.  What was less expected was the tone of the Fed’s press release, where the Fed showed that they plan to start reducing the size of the balance sheet… AND that they would like to hike again this year.  Bond markets greeted this news with a high degree of skepticism.

There is an old adage about bull markets climbing a wall of worry.  Well, it turns out that it’s only natural for us to be perpetually worried about the future – we actually may be hardwired to focus on threats.  But this tendency towards pessimism may cause us to miss out on opportunities.  Maybe we should be more optimistic, especially regarding the long term.

Ever wondered about how social media has changed the investment landscape?  This profile of short seller Andrew Left shows how deft use of the media can help a lone investor get everyone to question a company (and for him to make a boatload of money in the process).

For those of you out there who aren’t already buying everything from Amazon, their purchase of Whole Foods this past week shows just how intent they are upon getting into the grocery market.

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