Bryan

When interest rates drop, existing bonds become more valuable because they pay a higher rate than new bonds. Recently, the expectation of rate cuts boosted the performance of the Bloomberg U.S. Aggregate Bond Index (AGG), benefiting many bond portfolios. Given this movement in bonds that has already occurred, the best gains from Fed rate cuts […]

Historically, the stock market tends to perform well after interest rate cuts, which is why many investors are optimistic, and we’ve seen positive reactions recently. However, there have been exceptions, such as in 2001 and 2007, when the results didn’t match expectations. This highlights the importance of maintaining a balanced approach and managing risk carefully.

The concentration of the S&P 500 in a few major stocks has significantly increased and continues to pose a risk for markets. For instance, Nvidia by itself now carries more influence in the index than some entire sectors. This makes the market more vulnerable to the performance of just one company. At Redwood, we proactively

Investors often describe cash/money market assets as ‘dry powder’ – resources on the sidelines ready to boost the equity market. However, while the notional dollars in cash are higher than before, it doesn’t have as much power over the stock market. As a percentage of the S&P 500 market cap, the amount of cash is

Over the past year, we’ve seen a shift in how the market reacts to economic news. Earlier, negative economic data like lower consumer spending or rising unemployment was seen as positive for stocks because it signaled that inflation might be cooling, leading the Federal Reserve to potentially cut interest rates. This was good for the