3 Reasons Why the Fed Won't Raise Rates and Is More Likely to Ease

janet-yellen-deflationBack in March 2015, we wrote that you shouldn't count on the Fed to raise rates in 2015 because of deflation and slowing growth. In September, we wrote that recession is just around the corner in the US.

Therefore (unlike the street), we were not surprised by Friday's weak job report where job growth was less than expected. Not only that, wages disappointed, revisions to August's report were bad, and the participation rate fell to a new 38-year-low.

It's time for investors to stop listening to the media noise and if you look at the the actual data, you can only reach one conclusion: the Fed will not raise rates in 2015 or 2016, but they will soon turn 180 degrees and start talking about the next round of QE (quantitative easing) and/or negative rates

Let's take a look at 3 reasons why the data dependent Fed can't raise rates anytime soon.

Runnymede Team Makes Top 100 Most Social Financial Advisors List

Morristown, New Jersey, September 30, 2015 – Christopher Wang and Andrew Wang of Runnymede Capital Management have been named among BrightScope’s Top 100 Most Social Financial Advisors in the United States. The list recognizes the top advisors with significant online influence. Among seven New Jersey based advisors named, Christopher Wang and Andrew Wang topped the list at 42nd and 47th, respectively, followed by Sheri Cupo of SageBroadview Financial Planning (54), Gopal Gantayat of The Free Investors (73), Dan Crimmins of Crimmins Wealth Management (85), Brendan Thomas Mullooly of Mullooly Asset Management (88), and Thomas Froehlich of American Portfolios Advisors (95).

Andrew Wang quoted in InvestmentNews

Robo-advisers not the end-all in financial technology

Other digital platforms that advisers should also have on their radar screens handle functions other than investing

Sep 29, 2015 @ 12:08 pm
By Alessandra Malito

The Fed Shows Their Next Recession Plan: Negative Interest Rates

negative_ratesWhile many economists have been (incorrectly) predicting a September rate hike from the Fed, Runnymede has been saying that the Fed won't hike rates since the beginning of the year and with recession on the horizon believe that there may be no rate hike in 2016 either.

With growth slowing around the world and inflation at zero, the Fed is unlikely to move rates off the zero level. In any case, the most surprising news from the September FOMC meeting is that one member predicted negative rates in 2015 and 2016! Yes you read that correctly. While the majority of the Fed is still predicting (poorly) a rate hike in 2015, there is one member that wants to go to negative rates. In Europe, the Swiss, Swedish and Danish central banks already have negative rates to stave off the risk of deflation.

Top 3 Things I Learned at Runnymede This Summer

The following post was written by our summer intern, Avery. We enjoyed having such a sharp, energetic, and well-adjusted young man help us with various projects and share his fresh perspectives. We wish him lots of success in his senior year of high school and all future endeavors.

My name is Avery Bicks. I am seventeen years old, and I attend the Collegiate School on the Upper West Side of Manhattan. After taking an introductory course in Macroeconomics during the fall of my junior year, I immediately became interested in learning more about the economy and different investment strategies. My desire and need for more knowledge became more pronounced when my friends and I signed up for the stockmarketgame.org, where we saw our portfolio, well, crash and burn. Despite my shortcomings in the stock market game, I wanted an opportunity to learn from the best in order to sample the real business world and learn more about investing. Fortunately, this summer I was able to intern at Runnymede Capital Management where Sam, Andy, and Chris taught me more about portfolio mangement and the economy than I could learn in a whole year of school. Here are three major points that I took away from my time at Runnymede this summer.

What is Your Strategy in Volatile Markets?

World stock markets have been increasingly volatile this summer. Returns for market indices have turned negative and the S&P 500 suffered its first 10% correction since 2012. Because of this, I have received several message in my inbox that ponder what do in this environment. A couple of the titles were "What you should do in volatile and uncertain markets" and "When market conditions become volatile, how will you react?" The two main strategies that they suggest are 1) stay the course and 2) a diversified portfolio is the best way to be positioned. While this seems sensible in a bull market cycle, these two strategies do not work in a bear market cycle. Therefore, the most important question is not what to do in a volatile market, but is this a bear market?

They Say Recovery, We Say Recession

How is the economy doing currently? Not well. The United States has had two recessions in the 21st century, in 2001 and 2008/9. Our prognosis is that the US economy is losing steam quickly and the third recession is getting near. Let’s look at the cost of money, raw material and labor. Due to a lack of demand, all current indications are that interest rates, commodity prices and real wages will continue to fall.

S&P earnings to suffer annual decline for first time since 2008

At Runnymede, we firmly believe that earnings matter. It's earnings that drive stock prices higher or lower over the long term. So it is important to monitor what is happening to the overall earnings picture. In February, I wrote a blog post entitled, Where have all the (S&P) earnings gone? Back then street estimates had been reduced significantly but still predicted 5% growth for 2015.

Today the earnings picture is clearer with most of the S&P 500 constituents having reported for the first half. The results aren't pretty. Thanks to the crash in energy prices and the strong US Dollar, S&P 500 earnings declined in the first half and are on pace for their first year over year decline since 2008. In hindsight, S&P earnings experienced peak earnings in the 3rd quarter of 2014 with a record high 10.1% operating margin; and have been declining thereafter.

3 Bubble Warnings to Listen to Before It's Too Late

Mark-Cuban_bubbleIt's time to listen to the best and brightest. The world's economies are stagnant or weakening while the stock market is overvalued. The time has come to be conservative. Most investment firms do not place importance on asset protection. Runnymede is an exception; we take asset protection very seriously. As such, we devote much time to market analysis and will make changes when necessary depending on our clients' objectives.

Here are 3 bubble warnings that experts are telling you to take note of right now.

Runnymede Receives Top US Captive Services Award For "Innovation in Investment Management"

Morristown, New Jersey -- Runnymede Capital Management has been named winner of "Innovation in Investment Management" at the 2015 US Captive Services Awards. Runnymede is the only firm to have won a captive services award for four consecutive years having been previously named "Best Client Care in Investment Management" in 2012, 2013, and 2014. This is the first year that Runnymede has won "Innovation in Investment Management." 

The US Captive Services Awards recognize service providers to captive insurance companies who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months. The awards took place in Burlington, Vermont on the eve of the Vermont Captive Insurance Association’s (VCIA) annual conference – the largest captive insurance gathering in the United States. This year's awards drew a record number of firms submitted for nomination and included seventy four firms vying for top honors.


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Runnymede Capital Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.