About Bill Kan, CFA

Bill Kan, CFA founded Candent Capital to help individuals use their personal finances to achieve their goals. Bill has over 20 years capital markets experience advising individuals, investment managers and governments on wealth management, economics and investment strategy.


Using Discipline During Periods of Market Volatility

Last Week’s Reminder: Volatility is a Fact of Life for Investors

Volatility spiked for stock markets around the world last week. Higher in the volatility in the U.S. meant that indices such as the S&P 500 US stock index fell as much as 11.8% from its peak of 2,872.87 on January 26, 2018. The last time stocks had a correction, a decline greater than 10% from a peak, was two years ago in February 2016.

With stocks climbing steadily higher over the last two years, it is easy to forget that stocks can also go downA historical study that goes back to 1930 by Bank of America Merrill Lynch1 found that a 5%+ pullback happens about three-times a year, 10%+ corrections occur about once a year, and 15% downturns come every two years.

The Roller Coaster Ride is Not Over

The stock market is on a roller coaster ride.  After a steady climb over the last two years, the roller coaster fell, correcting by more than 10% from its peak.  Ups and downs may be more frequent in 2018 as the stock market figures out how to interpret developments.

Many of the reasons cited for why stock markets corrected last week were also the same ones used to explain its rise. The reasons include inflation or pricing power, Jerome Powell as the new Fed Chairman overseeing interest rates, a strong job market, tax cuts and fiscal spending.

Optimists view a strong job market as support for continued economic growth. Pessimists view a tight job market means that the Fed may be more aggressive in increasing interesting rates in order to stem the risk of the economy overheating.

Optimists see inflation as a sign of pricing power, the ability for businesses to raise prices, which is good for profits. Pessimists see inflation driving up interest rates, raising the cost to finance business and a threat to growth.

Optimists believe tax cuts will boost profits and would dub the increase in fiscal spending as stimulus spending. Pessimists see tax cuts as moves that increase the budget deficit and would label fiscal spending as deficit spending that would increase our national indebtedness. President Trump’s proposed budget for 2019 calls for more spending on infrastructure and other projects that would add $7 trillion to the federal deficit over the next 10 years. More borrowing means that the US Treasury will issue more bonds to finance its spending. The law of supply and demand says that more supply should lower the price of bonds, which translates into higher interest rates.

We Are Cautiously Optimistic

We continue to be cautiously optimistic about the current investment environment. We are optimistic because business and economic fundamentals are solid. Earnings are improving, businesses have good access to capital for growth, the job market is strong, and the tax cut should boost business profits and increase disposable income for families. Interest rates remain low, and we believe global central banks will continue to maintain their easy money policies until they believe inflationary pressures are apparent. Continue reading

Six Ways to Make Your Money & Your Impact Go Further Before End of 2017

Before I get into the six ways to make your money and your impact go further, consider current talks regarding tax reform. They can influence your money and your impact. The last major overhaul in taxes was in 1986, 31 … Continue reading

5 Simple Ways to Improve Cybersecurity & Protect Yourself Against Identity Theft

Cybersecurity is one of the biggest challenges of modern times. Identity theft is one of the outcomes that you want to avoid. It can be a huge drain on time and money. No time is better than now to update … Continue reading

Outlook Post 2016 Presidential Election

The Trump victory keeps us in the bizarro world that I described in the July Quarterly Client Letter. Expect the unexpected is the lesson for 2016. Who would have thought that the UK would vote in favor of leaving the … Continue reading

Plan Ahead to Increase College Financial Aid

College is one of the biggest investments that a family will make for its children. Four years of college can run upwards of a quarter of a million dollars at a private school and roughly half at a public institution. … Continue reading

How to Get a Free Lunch with Diversification

The closest thing to a free lunch when it comes to managing your money is diversification.  When done properly, diversification can help you achieve what every investor wants – returns with less risk. Unfortunately, the benefits often get lost in … Continue reading

Fed Hits Pause on Rate Hike

The Fed, as expected, hit the pause button on its plan to hike interest rates following its FOMC meeting today. The sell-off in the stock market and oil prices are adding to the of cross currents about the health of … Continue reading

Five Things to Do Before Retirement

Ready or not, retirement may be around the corner. Maybe it is coming early or long coming. Either way, it will be a time for adjustment for many people. By some estimates, 10,000 baby boomers will retire every day. Here … Continue reading

Am I Ready for Retirement?

A friend recently asked me if I thought he was ready for retirement. Fred’s nest egg had grown nicely over his 20-year career. Retirement meant leaving behind a steady paycheck and the benefits of a big company with a generous … Continue reading

Financial Lessons from Emergency Response Training

Along with 70 other San Franciscans, my wife and I recently completed NERT training. As Neighborhood Emergency Response Team volunteers, we would assist the San Francisco Fire Department and our community in case of disaster. Much of what we learned about responding … Continue reading