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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.

If I asked you what your objective is when it comes to investing, what would your answer be? In my years as a financial advisor, I have found the answers I have gotten to this question to be far too broad to be meaningful. Whether it is “retirement,” “saving for my children’s college education,” or (the worst answer) “making money”. When it comes to anything in life, including investing, your success is in the details.

After a recent phone call from my 21-year-old son, I realized that some things never change. With the advancements in technology, it has never been easier to invest with an account on apps like Robinhood, SoFi, and Stash. Many of my son’s friends (Gen Z) are using these platforms on their quest to get rich quick and retire early. For young inexperienced investors, I equate this to the euphoria around the tech bubble of the 90s or even certain pyramid schemes.

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.

Imagine this: the year is 2014 and your diversified investment portfolio is earning a measly 7% while your neighbor Joe’s S&P 500 index is up over 14%(1). As if that wasn’t enough, Dianne, across the street made a risky decision to buy airline stocks and she’s all but doubled her investment (2)! So what gives? You’ve hired a financial advisor, and they don’t seem to be keeping up. This is the plight of many investors, but when is the last time Joe and Dianne came to your door to tell you about their big loss?

Each spring, the tax documents emerge from their hibernation as people prepare the information they need to meet their civic duty. Oftentimes, your accountant (CPA) or Financial advisor might take this opportunity to talk to you about deferring some of your income for tax purposes, but what does that mean, and is this right for you?

It feels as if 2020 produced enough headlines for a decade. A global pandemic, mass protests, an emotionally charged election and some dude named the “Tiger King” are just a few of the many stories that kept our interest. Yet, here it is the second month into 2021, and Gamestop is dominating the headlines. Gamestop, which was once a place to buy a video game, became the topic of discussion at every dinner table, group text and social media platform last week.