Just Because Stocks Are Surging Doesn't Mean They're Doomed To Crash

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Do Rising Stocks Equal Trouble? (AdviceIQ)

Times are good in the stock market right now. So good, in fact, that some predict trouble is looming.

Don't buy that prediction cautions, V. Raymond Ferrara, president and chief executive of ProVise Management Group LLC.

"Recently, the bears have even talked about a 20% downturn, which would qualify as a true bear market. Some are even suggesting that a 50% downturn is possible. While almost anything is possible, the question is what is the probability?" posits Ferrara.

"Given solid second quarter corporate earnings as well as decent economic growth, a 50% downturn is highly improbable anytime in the next few years. We can visualize a 20% downturn, but if it occurred it would more likely be a result of geopolitical events rather than economic fundamentals," says Ferrara.

Structured Products Could Be Useful In A Trust Portfolio (Wealth Management)

Fiduciaries now have a much great level of freedom to employ a variety of investment products thanks to the widespread adoption of both the Uniform Prudent Investor Act and the Uniform Principal and Income Act.

"Whereas portfolios typically were invested almost exclusively in stocks and bonds previously, today's portfolios frequently add commodities, foreign currencies and a variety of other investments to the mix," writes JP Morgan investment specialist Adam M. Morris. "Among a fiduciary's current prudent investment choices, structured products can serve an important purpose. In the right circumstances and handled properly, these strategies, also known as structured investments, structured notes or just "structures" -can increase return and reduce risk."

Don't Get Caught Out By The Cyclical Nature Of Investing (Institutional Investor)

'In investing, as in life, timing can be everything," says Tad Rivelle, CIO for fixed income at TCW. "The cycles of capital markets are as immutable as are the seasons of the year." "Those who commit risk capital while the cycle is enjoying its risk-on spring will prosper; those who avoid risk-taking during the spring would be advised not to do so as the autumn chill approaches," adds Rivelle.

"Shockingly, the ability of our institutions to forecast, much less control financial and economic cycles has been exceedingly poor," laments Rivelle. However, his point isn't to lambaste the Fed, the government, or Wall Street. Rather, Rivelle seeks "to remind that the customary ways of understanding and measuring cycles are nearly useless and investors need to examine them in a new, or at least different, way."

The Relationship Between The Price Of Gold And The Value Of The Dollar (Advisor Perspectives)

The relationship between the price of gold and the value of the dollar can be explained very logically, explains AdvisorShare's Ade Odunsi.

"So rather than view gold as a physical asset with a given amount of intrinsic value we instead think of gold as a physical currency whose value can be determined, as with other currencies, relative to other currencies," Odunsi writes. "In its essence when an investor buys gold in dollars they are expressing the view that they expect the price of gold to increase in terms of the number of dollars for which it can be exchanged at a future date. Similarly an investor that holds gold in euro terms is expressing the view that they expect the price of gold to increase in terms of the number of euros for which it can be exchanged at a future date."

Fidelity Reviewed Which Investors Did Best And What They Found Was Hilarious (Business Insider)

On this week's Master in Business program on Bloomberg Radio, Barry Ritholtz spoke with O'Shaughnessy Asset Management's James O'Shaughnessy.

"Ritholtz and O'Shaughnessy spend much of their discussion talking about the ways people screw themselves when investing, because nothing gets in the way of returns quite like someone who thinks they have a great idea," Business Insider's Myles Udland writes. "Because of our behavioral biases, we often find ourselves buying high and selling low."