Read more about the article Big Caps v. Small Caps – Expected Future Returns
Investment Management

Big Caps v. Small Caps – Expected Future Returns

Posted on December 17, 2010 by David Laidlaw  Equity markets are sliced and analyzed according to many different criteria.  Market capitalization is one of the most fundamental factors used to segregate stocks into different categories. Morningstar’s style box is a prime example of the use of market capitalization to define investments. Investors move funds between Large, Mid and Small Capitalization stocks at different times hoping to increase their returns.  Throughout the past market cycle, small capitalization common stock returns have trounced the returns generated by large capitalization stocks. Following is a table of annualized returns over the…

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December 17, 2010
Read more about the article 2011 Tax Deal – Quick Thoughts
Market Commentary

2011 Tax Deal – Quick Thoughts

Posted on December 8, 2010 by David Laidlaw  The following is a link to a Wall Street Journal synopsis of the recently announced tax deal between the Obama administration and the Republican Congressional leaders: http://online.wsj.com/article/SB10001424052748704250704576005571915798378.html?mod=WSJ_PersonalFinance_PF2#articleTabs%3Darticle Please note that the following analysis depends on the actual passage of legislation that formalizes the agreement and that this passage is not a forgone conclusion. The main tenets of the tax deal are that it preserves the current income tax schedules for the next two years and keeps in place a preferred rate of 15% for long-term capital gains…

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December 8, 2010
Read more about the article The Future of Dividends
Financial Planning

The Future of Dividends

Posted on October 7, 2010 by David Laidlaw  For the first time since the early 1960s, the S&P 500 yield is comparable to the 10-year treasury yield. The yield on the S&P 500 is currently about 2%. The 10-year treasury is now yielding about 2.5%. The ratio between these yields is as high as it’s been since 1962. Both 1960 and 1961 ended with the S&P 500 yielding more than the 10 year treasury. Are we entering a new period where dividends yields are higher than interest rates? Not likely, unless interest rates get even lower. The current relative strength…

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October 7, 2010
Read more about the article 2010 Capital Gains Tax Planning
Financial Planning

2010 Capital Gains Tax Planning

Posted on October 7, 2010 by David Laidlaw  The Bush Tax cuts that were enacted in 2001 and 2003 are expiring at the end of this year bringing tax rates back to 2000 levels. The most important provisions from an investment perspective are the change in capital gains rate and level at which stock dividends are taxed. Federal long-term capital gains tax rates are slated to increase from 15% to 20%. Also, stock dividends will be taxed at current income tax rates and no longer receive a preferred rate.   The healthcare legislation passed…

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October 7, 2010
Read more about the article Bigger Picture
Educational Blog

Bigger Picture

Posted on October 7, 2010 by David Laidlaw The equity markets experienced a marked change in sentiment over the past quarter. Coming off its April high of 1217, the S&P 500 plunged 16% to 1022 on July 10th. Since that date, the S&P 500 has rebounded almost 12% and is now in positive territory again for the calendar year. Among the positive developments, BP plugged its leaking well in the Gulf and the weaker European economies did not default on their bonds. Listed stocks also produced strong earnings and guided analysts to expect continued positive cash flows…

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October 7, 2010