Buyer Beware

One unintended consequence of COVID-19’s impact on financial markets has been the influx of new retail investors. Online brokerages, such as Robinhood, provide a platform where almost anyone can deploy capital into public markets, regardless of their experience or financial means. While the goal of platforms like Robinhood is to “democratize” investing, the ease of…

What is Driving the Surge of Interest in Stocks?

Whether it’s from speaking to friends and family or browsing social media feeds, it’s easy to see that there is a renewed interest in the stock market among retail investors. At first glance, having more people interested in their personal finance and investing in financial markets seems like a very positive thing. However, after closer…

Even Warren Buffett Can’t Call the Bottom

Markets bounced back sharply last week, providing a much needed respite for equity investors. But, before we get too excited, we need to keep in mind that +20% rallies during bear markets are very common. In fact, the biggest up days in stock markets have historically occurred during major bear markets.

Do Stock Buybacks Dilute Return of Capital to Shareholders?

For anyone that has been following the Democratic nomination race in American politics, you’ve probably noticed that a key issue has been the treatment of stock buybacks. Democratic candidates opposing stock buybacks say that they contribute to rising income inequality in the United States. The candidates have therefore proposed plans ranging from outright bans to…

The Downsides to Zero-Cost Commission

This week, financial services firm Charles Schwab announced that they would be eliminating trading commissions for stocks, ETFs, and options listed on U.S. or Canadian exchanges for clients using mobile or web applications. Though the press release stated the motive was to lower barriers for investors, it was likely done in response to initiatives from…

Will Value Stocks Rebound?

Last week in Sagacious we featured an opinion piece on the challenges involved in sticking with an investment strategy that has recently been underperforming. This week, the Wall Street Journal published an article that examined the extremely long period of underperformance value stocks have experienced relative to growth stocks. The investment strategy of buying “cheap”…