Feb 2018: Welcome Back Volatility
After an unusually long run of particularly calm and rewarding markets, volatility is back. Looking back, 2017 offered an especially mellow ride for investors. The largest daily drop in the S&P 500 in 2017 was -1.82%. The largest daily gain was 1.37%. And the index ended the year up 18.7%. 2018 began in the same vein as January produced 10 record highs in 13 days. All this calm and all of these positive returns may have lulled investors into feeling that this was normal (“Hey, we could get used to this!”) Then, with more drama than an Olympic downhill run, volatility returned in the last...
Read More2017 Q4: Are we floating in a bubble?
Happy New Year! We enter 2018 after an exceptional year in the global stock markets. The U.S. market delivered a whopping 21% while global developed and emerging markets outdid that, delivering 24% and 37% respectively.1 It’s common to experience that good news with mixed emotion. On the one hand, you celebrate a generous year in portfolio returns. On the other hand, you might be wondering if markets are now getting overpriced and whether you should be cutting back your stock allocation or even getting out altogether. The emerging field of behavioral finance gives us lots of insight into why...
Read More2017 Q3: Are we at the top?
Global Stock markets have extended the bull market run nine months into 2017. Bonds and real estate funds produced only modest returns. As we pen this letter every three months, we try to write to the issues we think are most on our clients’ minds. A common concern we hear is that the markets seems high, the bull market has had a very long run, there is lots of uncertainty in the world (political and otherwise) and, well, “when is this going to end?” The question of the hour is, “are we at a top?”.
Read More2017 Q2: Reversion to mean
In past letters, we have talked about reversion to the mean. In recent months, we are experiencing it.
Read MoreMay 2017: Two Truths About Stock Market Returns
There are two investment dictates you’ve certainly heard from us: Make sure that you are broadly diversified and stay fully invested. You understand that being broadly diversified across many stocks reduces your risk of being over-concentrated in one or a few stocks that risk suffering a poor fate. You also understand that, as much as we wish we could time the market by being in while it’s rising and out when it’s not, there is no crystal ball or proven reliable method for determining this correctly and consistently. Today we want to share with you a couple of extraordinary statistics about...
Read More2017 Q1: The Fiduciary Rule – Does it affect me?
We wanted to bring an important development in the financial services industry to your attention: The Fiduciary Rule. To put it briefly, the Fiduciary Rule is a regulation that requires advisors to act in their clients’ best interests. With the new administration, the rule has been delayed and there is a great deal of confusion and uncertainty about its future. Whether you have never heard of it until now or are deeply familiar with it, we want you to be aware of what it is and understand our position on it. In the following pages, we have a Question and Answer piece to further explain the proposed advisor Fiduciary Rule and how it might affect you. If this raises any questions or you have comments, please let us know.
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