September 2011 Newsletter: All About Risk
Do you feel an oversized dread for something as unlikely as a shark attack, yet feel safe driving a car? What makes something feel risky? What is your personal tolerance level for risk? We worked with a client recently who had just celebrated a big round birthday number, just a number, but it affected her risk tolerance. Another client was affected by a real estate investment that went south at the same time that his stock portfolio was swooning with the markets. Why do we care so much about this topic? Because we want clients, like you, to avoid making the wrong choice at the wrong time if...
Read MoreAugust 2011 Newsletter: Comments on Recent Market Volatility
We are getting the market volatility we expected in our email of July 21st and then some. Despite the credit agency downgrade of US Treasury debt, our core bond fund holdings are holding up well. The stock market, as you know, has reacted violently. We all have vivid memories of 2008 when stocks lost significant value. Our belief that trying to time the market is foolish remains unchanged. A few clients suggested that we exit the market prior to the August 2nd debt ceiling deadline and reinvest on August 3rd. Of course, we now know if we had gone along with that plan, we would have stepped...
Read MoreJuly 2011 Newsletter: Debt & Default
We wanted to share some of our thoughts on the upcoming August 2nd deadline to increase the US Government’s debt ceiling. It is very unfortunate that we are approaching the deadline without a resolution clearly in sight. Given the nature of current political debate, it appears that we won’t have a solution until the last minute, if then. We haven’t seen too much thoughtful discussion of what might actually occur if the deadline passes with no action by Congress. This is not the first time our nation has been faced with this challenge. In 1957, the Federal government...
Read MoreMarket Summary – Q2 2011
What’s Been Happening? After the worst national housing price downturn in memory, residential real estate has not yet recovered. The blue trend line below tells the story. The housing slump continues due to supply overwhelming demand. Bank foreclosures provide a steady source of low priced supply while more Americans find waiting to buy or renting an attractive option. The consensus remains that it will take quite some time to offset the effects of this unprecedented debt-fed bubble. Source: S&P/Case Shiller Index Source: NumberNomics.com American...
Read MoreMarket Summary – Q1 2011
What’s Been Happening? The natural disaster in Japan and resulting issues with nuclear plants in the area have been generating headlines since mid March. While incredibly devastating for the residents effected, it appears that the impact on the global economy from these events is somewhat muted. Despite being the world’s third largest economy, Japan represents only about 9% of global gross domestic product [GDP]. As the nearby chart displays, it is typically unproductive to sell following natural disasters. Despite a stock market pullback following the tsunami and subsequent events, the...
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