Yield Curve Inversions Likely Positive for Stocks in Near Term

Yield curve inversions are the worry du jour in the financial media with many proclaiming an oncoming recession because a certain part of the yield curve flipped upside down in recent days. While the shape of the yield curve has historically been an incredibly reliable recessionary indicator, there’s a lot more to the story than the headlines would suggest…

Market Update

It’s been a whirlwind stock market since early October with stocks at their lows for the year heading into this holiday season. All three major stock indices, the Dow, NASDAQ and broader S&P 500 are deep into correction territory this year. The Russell 2000 which tracks U.S. small cap stocks is officially in a bear market, or down over 20%. While a “Santa Claus” rally is certainly possible, it’s looking increasingly likely that the U.S. stock markets will put in their worst year since 2008…

Market Update

Volatility is never a fun experience. There's an old saying that bull markets go up like escalators and correct like elevators. However, that’s the necessary price of admission to achieving long term stock market gains. When younger investors look at the long term stock market averages that have beaten every other major asset class (e.g. cash, bonds, real estate, commodities, etc.) over 100+ years, they often ask “Why doesn’t everyone just invest everything in stocks?” The answer is volatility. Enough investors allow themselves to get “washed out” of the market during volatile times which sends prices down until the expected future returns of the market become attractive enough to draw a new wave of investors back in and the cycle begins anew….

Looking at the 2017 Autumn

“Be fearful when others are greedy and greedy when others are fearful.” - Warren Buffett As you know, we have experienced almost nine years of relatively uninterrupted growth in the U.S. stock market (and the 3rd longest business cycle expansion on record). We believe many investors are taking on increasingly more portfolio risk at a point in the business cycle when history and prudence would suggest that the opposite course of action, temporarily reducing risk levels, is the best path to achieving positive long-term returns…

Spectra Energy Partners Announcement

A few weeks ago an energy distribution and transportation company called Enbridge Incorporated ENB disclosed that they had agreed to acquire Spectra Energy Corporation SE in an all-stock deal.

Why does this matter?

You own shares in Spectra Energy Corporation’s Master Limited Partnership (MLP) subsidiary Spectra Energy Partners SEP. According to the announcement, Spectra Energy Partners will continue on as a publicly traded partnership, so your shares will likely be unaffected by the acquisition. If this is the end of the story, we will happily remain unitholders (shareholders) in Spectra Energy Partners as they will remain, in our view, the best midstream MLP in the country.