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Articles & Whitepapers

Volatility, Stored Methane, and the Fundamentals of Asset Values

Volatility has buffeted the markets over the last few quarters. Stock markets around the world have been hammered by the Ukraine war, inflation, interest rate increases, and the continued supply chain problems. Yet the usual safe haven – bond investing – has also been fraught, as bond prices also go down in value as interest rates rise. So what is a long-term investor supposed to do? Firstly, don’t panic. In this quarter’s white paper, we are focusing on the ‘normality of volatility’ and the importance of understanding fundamental value of assets when confronting volatility. We explore the human element: why do assets move so sharply above and below their fundamental value? We will take a 30,000-foot view of market forces to get some perspective on how common this kind of asset fluctuation is to markets. Fasten your seat belts, because we are experiencing a bit of turbulence as hot air trading gives way to a cold front of fundamental value.

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The ABCs of Beta

For this quarter’s note, we thought we would wade a little bit into the turbulent stream of risk measurement known colloquially as Beta. Before everyone shouts in unison “boring!”, give us a chance to make the case that this is a worthwhile topic for investors – or at least for their investment managers.

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A Look-Back at 2020: The Fed’s Precedent-Setting Pandemic Playbook

There is a long-standing practice amongst money managers and investment advisors to send out an annual letter to clients. These are generally infinitely forgettable affairs, and mostly backward looking. So, in this year's letter we wanted to give people just one number to remember the year in financial terms: 14.

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Tariffs: A New Conversation on an Old Topic

As of this article’s submission, tariffs have been big economic news. Tariffs are taxes levied by governments on imported goods. The United States has been moving over the past 20-plus years to a free trade environment. The United States has been removing tariffs on imported goods; and, other countries have been removing the tariffs they have imposed on US goods they import.

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Understanding Exchange-Traded Funds (ETFs)

In the past 20 years, ETFs have become one of the most popular investment ve­hicles. They offer low­cost access to as­ set classes for investors. With over $1 trillion in assets under management, the ETF structure has become one of the fast­est growing areas of the financial markets. There was one ETF in 1993 known as the SPDR (the S&P 500 Depository Receipt). Now there are over 2000 ETFs, representing many asset classes.

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Big Investment Firms Leave Behind Smaller Investors

Investment advisors at big-name firms and the investors they serve often find themselves in a tug-of-war between the company’s recommendations, and the client’s own ideas. Clients might want to invest in a hot start-up like Tesla Motors, while corporate policies put the brakes on that plan. Frustration with not being able to let clients breathe is one of the reasons Gene Sulzberger struck off on his own.

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