A tremendous amount happened this past quarter at least from a geopolitical perspective. As far as the market is concerned nothing significant happened. The DOW opened July at 34,507 and opened on September 30th at 34,467. If you closed your eyes on July 1 and didn’t open them until October 1, you might think the market didn’t move. We all know better than that. The markets moved up, down, and...
A financial professional's business card may say “financial adviser”, but that does not mean they are truly a financial adviser. By doing your homework you can increase the odds of hiring an advisor with a high level of integrity, however, you will still need to feel that you can trust them. Look for an advisor who you believe has a similar moral compass to your own. Once you find them, ask them the tough questions to make sure they are not just a good person, but that they are also qualified.
Following an explosive 9 month run, small cap stocks slowed their pace of growth allowing large cap stocks to nearly close the gap for the year. Meanwhile, international markets underperformed U.S. markets. This is not surprising. To many other nations, the U.S has had a fairly productive vaccine rollout and therefore many components of the U.S. economy are back to a semblance of normalcy. As international stocks become even cheaper (relative to U.S. stocks), at some point that may present investors with an opportunity.
For retirees that wish to truly enjoy their retirement but still want to provide a legacy, setting priorities and finding a balance will be key. Most would agree that ensuring one's stability in retirement should be the top priority. The first step to ensuring you can enjoy retirement is to make sure you have enough money saved in the right type of accounts to make this happen.
For a long time, many of our portfolios have had a slight bias towards small cap stocks (stocks with a total market value under two billion dollars). Sometimes this bias helps performance and sometimes it hurts. We believe that over the long term, in exchange for a small amount of additional risk, small cap stocks will provide better returns than their large cap counterparts.
Don’t put all your eggs in one basket. I have no idea where that idiom originated from but it is perhaps the best and simplest way to describe diversification. Instinctively investors know they should diversify their portfolio and most do this. Having looked at hundreds, if not thousands, of portfolios, I can tell you that diversification amounts to more than just owning multiple funds. A common mistake that investors make when trying to diversify their IRA or 401k is that they, inadvertently, create a portfolio that has the illusion of diversification. Let me explain.
On January 18th, we initiated a gold position in many of our portfolios. As many of you know we are not flashy day traders. On the contrary, our investment approach has a long term outlook, is disciplined, and is built on the fundamentals of asset allocation. With that being said, we do not take a purely static approach to investing. We believe that adjustments over time are prudent and this change represents what we believe to be a prudent investment...
Well, that was a year to remember! I won’t spend too much time talking about 2020 as we are all looking forward to moving on. However, it may be worthwhile to do a short recap of what happened to markets and how they concluded in 2020.