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With the recently announced split of General Electric (GE) into three parts and Johnson & Johnson (JNJ) into two, it seems like a good time to discuss why some companies split up. It’s also a good time to discuss why companies merge in the first place. The short answer is because their stock will go up. The foremost job of the CEO of a public company is to maximize shareholder value, which results in an increased stock price. While that may sound cynical, CEOs are largely compensated via company stock…

While the global pandemic has impacted many facets of everyday life, it remains too early to say with certainty which changes will endure and which will prove temporary. In equity markets, the strong outperformance of Growth stocks relative to Value stocks has led many investors to question if they should be focusing their efforts solely on Growth investing. For the reasons discussed below, we remain committed to constructing a “Core” equity portfolio consisting of both Growth and Value stocks. Before diving into the numbers, the table below provides general characteristics…

Liquidity refers to the ability to purchase or sell an asset without drastically changing the price. Cash is considered to be the most liquid asset as it can easily be converted into other assets. Assets traded over an exchange like Exchange Traded Funds (ETFs) and most stocks, are liquid, as they are traded frequently and with relative ease. One way to measure liquidity is through the bid-ask spread. Bid refers to the price at which a buyer is willing to buy, and an ask is the price at which a…