The Caldwell Trust Company Blog

The Big Three: The Dollar, Oil, and the Fed

Posted by Caldwell Trust

With a bumpy start to the year in stocks and a nice rally off the February 11 bottom, we are in and around the highs for the year in stocks. As the summer months approach, and with the seasonally weak periods in stocks, we turn our attention to what we call “The Big Three”: the Dollar, Oil and the Fed.

As we have mentioned in the past on these pages, the U.S. Dollar remains and will remain the world’s major reserve currency for the foreseeable future for a number of reasons. As a quick refresher, they are as follows: the vast majority of global trade happens in USD, approximately 64 percent of official foreign exchange reserves are in the currency, commodities such as oil and gold trade in USD and there is a military to back it up. Since oil among other commodities trades in U.S. dollars, we in the investment department need to be tuned in to the relationship between oil and the dollar AND the relationship between the dollar and the entity that controls the supply and demand for the currency, the Fed.

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Topics: Investment Letter

To Frack or Not to Refrack: That is the Question

Posted by Caldwell Trust

In this investment letter we provide an update on what is happening within the U.S. oil patch and its implications. When scanning news stories recently, we were surprised by the headline “Refracking is the new Fracking”.

We wondered, “What is refracking?” The question seemed rhetorical but worth exploring. The energy sector in the U.S. has been a leader in producing what is described as either disruptive technology or new and better ways of doing things, depending on one’s point of view. Refracking seems to be a clear example of that.

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Topics: Investment Letter

John Booth Brings Common-Sense Approach to Handling the Trust Business

Posted by Sheryl Vieira

Common sense is genius dressed in its working clothes,” wrote Ralph Waldo Emerson. He could have been describing John S. Booth III, a member of Caldwell’s board of directors.

John was already a Caldwell client when he joined the board in 2009, and his knowledge of the company went much deeper. He was here when his father, Sam Booth, worked with Roland Caldwell, R. G. “Kelly” Caldwell Jr. and a few others to found Caldwell Trust Company. Nevertheless, he was surprised when Kelly invited him to become a director. Kelly told John, “What we want is a common-sense approach to handling the trust business.” With his no-nonsense demeanor and a carefully reasoned methodology, John is a perfect fit.

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Topics: Corporate, Investment Letter

Dr. Arthur B. Laffer presents his thoughts on the state of our economy

Posted by Sheryl Vieira

Dr. Arthur B. Laffer, internationally regarded economist and longtime consultant to Caldwell Trust Company, made a special presentation on the economy to Caldwell’s board of directors and officers on March 20. Known as “The Father of Supply-Side Economics” for his influence in the tax-cutting movement under President Ronald Reagan in the 1980s, Dr. Laffer is also acclaimed as a founder of the Laffer Curve, which represents a graphic relationship between tax revenues and tax rates.

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Topics: Investments, Investment Letter

The Fed, the Economy, the News: When Bad News is Good, When Good News is Good

Posted by Sheryl Vieira

If the market continues as it appears today, we may be poised to enjoy a highly favorable situation where bad news is good news and good news is good news—based on a few big “ifs.” This is the opinion of noted economist Arthur B. Laffer, a valued adviser to Caldwell Trust Company for many years. We’d like to follow up on Laffer’s thoughts in this newsletter.

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Topics: Investments, Investment Letter

To Taper, or Not to Taper: That is the Question

Posted by Sheryl Vieira

Recent headlines that the Federal Reserve is contemplating tapering its bond buying (QE or Quantitative Easing) program have dominated the news flow. Our focus for this investment letter is to highlight what tapering is and the potential consequences of such actions. In recent years the Fed, independent of government, has provided support for the economy by buying bonds to keep interest rates low. “Tapering” means that the Fed will begin slowing the rate at which it purchases bonds. What is interesting about Bernanke’s comments is that the impetus to begin to reduce bond buying is data-dependent.

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Topics: Investments, Investment Letter

Special Report - 53rd Annual Laffer Conference Provides Overview of Economy

Posted by Kelly Caldwell

Representatives from Caldwell Trust Company attended the 53rd annual conference presented by Laffer and Associates in Washington, D.C. on May 8-10. The event provided a lively forum for a stellar roster of speakers that included numerous members of Congress, governors, economists, “think tank” representatives and other observers of national affairs. The conference consisted of a series of “town hall” meetings and speeches on current national and international issues that have a direct bearing on our economy. Because the conference is private and does not include media coverage, we have summarized the thoughts and conclusions we heard regarding our most pressing issues as a nation.

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Topics: Corporate, Investment Letter

Investors May Now Benefit from the Power of Compound Earnings

Posted by Sheryl Vieira

dubious urban legend says that Albert Einstein named compound interest as the most powerful force in the universe. Another great fable involving the same principle was recounted by George Gilder, author of the 1981 bestseller Wealth and Poverty : “The Emperor of China was so excited about the game of chess that he offered the inventor one wish. The inventor replied that he wanted one grain of rice on the first square of the chess board, two grains on the second square, four on the third and so on through the 64th square.

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Topics: Retirement Plan Services, Investments, Corporate, Investment Letter

Dividend-Paying Stocks can Provide Long-Term Benefits

Posted by Sheryl Vieira

To achieve optimum results for our clients, we at Caldwell Trust Company employ sound investment strategies based on our extensive experience, backed by research from our internationally recognized research providers and implemented by our sophisticated, proprietary software. We know that you, our clients, consider our results to be the best indicators of our performance. We know, too, that you appreciate learning some of the underlying principles we follow in formulating our strategies.

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Topics: Investment Letter

Tim Videnka Brings Experience and Enthusiasm to Investment Analyses

Posted by Sheryl Vieira

Timothy J. Videnka, CFA, joined Caldwell Trust Company in late 2011 to fill a newly created position as vice president, investments. Now, after 19 months with Caldwell, he says of the job, “I’m never going to be done.”

That nagging feeling that you’re never going to finish your work keeps some people up at night. Not Tim. His enthusiasm is unflagging: “I wake up every morning and say, ‘Let me at it.’” Tim runs the investment side of the business with a team of Caldwell’s experienced staff. Together they try to make
predictions about the unpredictable stock market. “Last year everybody said that the stock market shouldn’t—couldn’t—go higher, but it had a fantastic year,” he says.

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Topics: Corporate, Investment Letter

 


 

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