Charter Trust - Global Market Update

How do you get started investing? Photo: Adam Raoof. Source: Animal Photos Investing can be daunting. Stocks, bonds, real estate, commodities—they all seem to hitting record highs. And there’s all the specialized jargon: cash settlement, maturities, dividends, not to mention taxes. Sometimes it seems like the industry deliberately makes things unclear so you’ll have to go to them for advice. And nothing comes for free, does it? We’ve all read stories of Ponzi schemes and other predatory […]

Investing has gotten really weird. Illustration from “Through the Looking Glass.” Source: Ebbemunk In today’s world the best performing assets are bonds. Bonds that have historically low interest rates continue to defy expectations. Ten years ago, bond guru Bill Gross famously declared that the great, multi-decade bond bull market was over. Since that prediction, long-term US Treasuries have returned 9% per year, while a cap-weighted index of global equities has returned about half that. And so far […]

Is the market scary or dangerous? Roosters trying to look dangerous. Photo: Taro Taylor. Source: Animal Photos Scary things can hurt us, but aren’t very common—like shark attacks or terrorism or radiation causing cancer. We read news stories about them and get worried. Dangerous things are things we tend to ignore but do long-term damage more often that you think—like avoiding an annual physical, or working on our budgets, or changing the oil. We underestimate these risks […]

Why is there so much conflict? Public Domain. Source: Library of Congress Payment systems are filled with conflict: workers who think they’re not paid enough, managers who think their employees aren’t working enough, owners who think the business doesn’t return enough. Everyone has their own agenda. The question isn’t really why is there so much conflict, but—considering all the different angles—how does anything get done at all? Yet another conflict in marketplace comes from what we might […]

What’s the balance? How do you balance employee interests and owner interests? Customer concerns and management issues? The goals of all stakeholders—owners, employees, clients, and communities—should be considered. They key word for all these parties is equity. Equity as in people inside and outside the firm feel they are being treated fairly. And equity in the sense that employees have a proprietary feeling about the business—a sense of ownership, that what they do and how they do […]

Can’t we all just work together? Photo: Roy Lister. Source: Wikipedia Every employer’s dream is to have their workers act like owners. They want their employees to be diligent and energetic, and to treat customers well. They want workers to look out for the top line and the bottom line—growing revenues and maximizing earnings. And they want their people to behave in an ethical, sustainable way. But how do you get there? The principal-agent problem can’t just […]

Do salaries create conflict, too? Source: Gratisography Salaries have also been around a while. Our word “salary” comes from a Latin word for salt. Roman soldiers were given “salt money” as pay; we still may say that workers are “worth their salt,” meaning that they earn their pay. Salaries are set monthly, or annually. Salaries became more common during the industrial revolution. They were used to pay administrators and managers whose work was difficult to measure, but […]

Where do our wages come from? Source: Wikipedia As long as there has been work, there have been wages. Wages have been part of society from Ancient until the present. There are many references to wages in the Bible. Wages can be calculated by the task—a piece rate—or by the amount of time put in. Day wages were typical in the ancient world, but as soon as clocks were invented, hourly wages became more common. Paying people […]

How do people get paid? Source: Wikipedia Our pay is one of the few taboos left in modern society. People just don’t talk about money—at least, not about what they make. Whether it’s because we’re embarrassed or envious or worried about someone posting our personal information on the web, we’re nervous about sharing our earnings. But what we’re paid has a big impact on what we do, and how we do it. Where you stand often depends […]

“Never mind.” Source: Road Traffic Signs That’s what I thought when I saw that US stocks had almost totally recovered. The S&P 500 is now within 1% of its pre-Brexit level. UK stocks are actually higher than they were—spurred on by a weaker British Pound. To be sure, other European stock markets are lower—those in Germany, France, and Italy. To be sure, the Pound and Euro are still down. And interest rates around the world are a […]

So how many are there? Blind Men Appraising an Elephant. Edo Period Illustration. Source: Brooklyn Museum How many mental mistakes can we make? We’ve discussed loss-aversion, overconfidence, herd behavior, and all kinds of cognitive biases. But there are lots more: Wikipedia lists over 150 different kinds of mental errors, from anchoring to the money illusion […]

It’s all so obvious. Isn’t it? Photo: Aimee Low. Source: Morguefile That’s the way everything looks when you look back. When we examine the market of the late ‘90s, it’s “obvious” that tech stocks were in a bubble and overpriced. When we look at early 2009, it’s “obvious” that the world was on sale, and […]

How do you see the world? Source: Pinterest. Over 200 years ago Immanuel Kant pointed out that everyone looks at the world through his or her own particular lenses: we’re limited by our own minds. We can never know a thing-in-itself; we only know what we think about something. We can’t really see the world […]

“Nothing ever changes, nothing ever will” – Les Miserables, Herber Kretzmer lyrics “Fantine,” by Margaret Hall. Source: Wikimedia Victor Hugo’s Les Miserable is a deeply enriching story of human suffering under various circumstances. It is considered one of the greatest novels of all time. It describes how one man moves from corruption and bestiality to […]

What does “framing” do to our thinking? Photo: Dag Carolus. Source: Wikipedia Frames are important. The create the setting for a picture. They can protect it and highlight what the artist wants us to see, or make a small picture seem much bigger. Frames have been used for thousands of years. In our thinking, people […]