The VIX (VIX), widely known as the “Fear Gauge” index, is a measurement of the implied 30-day volatility of the S&P 500. The higher the VIX, the more investors fear that a market decline is in the near future; conversely, the lower the VIX, the more complacent investors are about the market.
This past summer, the VIX registered the lowest level seen in the last seven years, implying that investors are not fearful of a near-term market correction or a stock market crash. Despite the political conflicts in Russia and the Middle East, the VIX today is not far from that summer low, signaling that investors still do not expect a sharp stock market decline. (more…)
A lot has been said about the importance of rebalancing. In fact, we at Hardesty Capital have said a lot about it. But let’s take a step back. In investing, every action taken is about managing risk versus return. Investors choose what level of risk they are willing to accept, knowing that with more risk they can expect higher return. The opposite is also true: less risk means less return. When investing in individual securities, research is performed to determine if that relationship is misaligned, that is, to look for higher returns with less risk. However, when talking about entire asset classes and their place in a portfolio, all that we need to focus on is managing risk, reward, and time. (more…)
When choosing an investment professional, there are many different avenues to navigate. Understanding the differences between Registered Investment Advisors (RIAs) and brokers will help you determine the best professional council for your investment needs. A Registered Investment Advisor is defined by the Investment Advisers Act of 1940 as a “person or firm that, for compensation, is engaged in the act of providing advice, making recommendations, issuing reports or furnishing analyses on securities, either directly or through publications.” As a Registered Investment Advisor (RIA), Tufton Capital Management has a fiduciary duty that sets us apart from stockbrokers and other salespeople who charge a commission for executing sell orders submitted by their clients. (more…)
A local investment-management firm quite literally followed the money and moved from Baltimore City to Hunt Valley.
By Rick Seltzer, The Baltimore Business Journal Sep 16, 2014, 7:27am EDT
Investment firm’s offices had been in Mount Vernon since its founding in 1995
By Natalie Sherman, The Baltimore Sun 6:59 p.m. EDT, September 15, 2014
Dear Clients and Friends,
Since its founding, Hardesty Capital Management has enjoyed almost 20 years in historic Mt. Vernon, one of Baltimore City’s most unique and historic districts. Our East Read Street offices have accommodated company growth from several employees to a current staff of 14 financial professionals and almost $1 billion in client assets.
As Hardesty Capital looks to the future, we’ve concluded that a larger and more updated space is necessary. In addition to more offices and conference space, our firm requires a building with state-of-the art technical capabilities that ensures our maximum efficiency.
As importantly, many of our clients have expressed a desire to have their investment (more…)
Let’s take a moment to look at the first half of 2014. Both stocks and bonds moved forward in the first half of the year. The S&P 500 gained 7.12%, and the Dow Jones Industrial Average gained 2.68%. The 10-year Treasury rate fell from 3.0% to 2.6%, resulting in a 2.1% increase in the price of this important benchmark. These results were consistent with a number of mixed signals coming from the economic recovery, which has continued to be on-again and off-again.
This in part is because the country experienced a severe winter, a bitter cold, and many weather-related economic disruptions. The result was that real gross domestic product fell 2.9% in the first quarter, considerably worse than the consensus expectations. We think first half weakness is only temporary and will result in a deferral of demand. Recent strong automobile sales coupled with improving housing demand suggest third quarter GDP could be up 3-4%. Because of the weak first half, the outlook on the balance of the year needs to be reasonably strong to reach our initial 3-4% full-year growth forecast. In order to err on the side of conservatism, our new forecast calls for growth to be in the 2-2.5% range. (more…)
The financial markets struggled in the first quarter of 2014, but despite several challenges, managed to reach new all-time highs and also experienced a period of relatively stable interest rates. The actual results were as follows:
S&P 500 +1.8%
Dow Jones -0.1%.
10-Year Treasury +3%
Russell 2000 +1.1%
These results were all the more surprising against the backdrop of adverse weather conditions in North America, continued problems with the rollout of Obamacare, and the seizure of a large part of Ukraine by a re-energized Russia lead by Vladimir Putin. Finally, there was the mysterious disappearance of Malaysian Airlines flight 370 on the morning of March 8th. In a strange way, the missing airplane brought many nations together, including China, the U.S., the U.K., Australia, and India, in a determined search for the plane. How nice to have so many world powers working towards a common objective, which if successful would represent a cooperative global achievement. (more…)
Stay the course. That’s what Baltimore-area money managers are telling their clients in the wake of the stock market’s 5 percent slide this year.
By Gary Haber, The Baltimore Business Journal Feb 6, 2014, 2:47pm EST
The stock market as measured by the S&P 500 recorded very powerful results in 2013, advancing 32% (total return), the best performance since 1997. Other equity indexes advanced strongly, confirming that a sustainable economic recovery has begun. The 10-Year U.S. Treasury Bond rate ended the year at 3%, up significantly from the 1.4% Iow recorded in 2012. The rise in rates suggests a strengthening in credit demands normally associated with an upturn in economic growth. None of this is very comforting to bond holders, who experienced a loss of 3.2% (according to the Bloomberg U.S. Treasury Bond Index) in U.S. Treasuries in 2013. Financial markets are a leading economic indicator and the strong equity gains of 2013 hopefully are a predictor of better economic times in years ahead. (more…)
As we begin the New Year, Maryland investors find themselves in a bit of a quandary: where to invest in 2014. There do not appear to be any clear options. The consensus view on Wall Street is that interest rates will move higher. If correct, that would mean their more safe investments, bonds, are headed for another difficult year. Stocks are up significantly since the financial crisis and appear fully valued. Perhaps the year will not be kind to stocks either. Cash is yielding nothing and unless the Fed has a drastic change of heart, that is not expected to change. So, what’s an investor to do in this environment?
The bond market is probably not the answer as we are most likely headed for another difficult year. The Quantitative Easing program should end in 2014 and the Fed may begin to seriously contemplate increasing the Fed Funds rate. The mere threat of tapering the QE program in 2013 caused a violent reaction as the yield on the 10-year Treasury spiked from 2% in June to 3% in September. The 10-year Treasury began 2013 yielding 1.76%. An upward bias to yields of most maturities longer than 2 years persisted throughout 2013 and many pundits suggest 2014 will likely be no different. Investors are not used to losing money in their bond investments. (more…)
Money management companies report growth in 2013
By Natalie Sherman, The Baltimore Sun 10:16 a.m. EST, January 4, 2014
If you want to know something about the history of the Baltimore investment community, you might want to call James Hardesty.
The 67-year-old history buff and chairman of Hardesty Capital Management has spent his career in Baltimore, starting with a job in the mail room of Alex. Brown & Sons and later as an executive at the old Mercantile Safe Deposit & Trust Co. Both Baltimore companies eventually were acquired.
He founded his own investment firm in Baltimore in 1995. Today, it manages $800 million in assets, with a goal of reaching $1 billion within two years. To help achieve that, the firm recently hired a new president.
Hardesty recently discussed the stock market, challenges for his firm and an old classmate who is a former U.S. president.
After buying a Timonium court reporting company and a Towson spice maker, Chad Meyer is returning to his business roots — the world of high finance.
By Gary Haber, The Baltimore Business Journal Dec 3, 2013, 2:19pm EST
Several times a month I am asked where I think the stock market will be in six months or a year. The question implies that I am some sort of stock market astrologer, and that would be very scary. I just reply “I have no idea.” In the short term, I doubt that anybody has much of an idea where the stock market will go. But over the last 75 years, the market has provided an average total return of 9.4% compounded annually, comprised of 5.4% price appreciation and 4.0% dividend yield.
But the market direction question is really trying to ask is how do you time the market: when do you sell out and when do you buy in? This strategy of market timing is fraught with risk and can be very dangerous. The timing of the market requires two critical decisions: when to get out and, more importantly, when to get back in. The second decision, when to reenter the market, is really the hard part. (more…)
