Market Summary – Q4 2014
October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain 2014 will not stand out as the poster child for global diversification. As interest rates stayed low, longer term bonds continued to perform well, Real Estate benefitted enormously (more in the US than outside of it) and the returns for US Stocks surpassed the non US market averages of the developed and developing world. The charts following help to walk you through the recent leaders...
Read MoreDecember 2014: Is Diversification a Drag?
Recent performance across asset classes has led some clients to wonder out loud if we should have less money allocated to bond and emerging market stock funds. This is an understandable reaction to a 5 year period when pegging all of your investment dollars to the US stock market has provided the best return.
Read MoreMarket Summary – Q3 2014
The quarter ending September 30th saw investment losses across a variety of asset classes, knocking recent winners off their perches and reducing one year gains down to a more modest range. The overall US Stock Market as measured by the broad Russell 3000 index managed a slim gain of 0.01% over the most recent quarter, while smaller US company stocks, international stocks and real estate investment trusts fell sharply. In his 1949 book, the Intelligent Investor, Benjamin Graham coined the term Mr. Market, a fictional character meant to represent the emotional nature of the Stock Market. The...
Read MoreSeptember 2014: Are Hedge Funds the Answer?
“The implication is that people in the mutual fund world, if they were any good, would be running hedge funds. That’s complete nonsense. Just because you’re greedy, it doesn’t make you smart.” John Osterweiss, investment company founder, CEO and former long/short Hedge Fund Manger No matter how much the economy, housing markets, banking industry and other objective measures of broad financial health continue to improve; it’s never hard to find a fresh source of financial angst. The Financial Crisis of 2008-09 turned out to be an ideal breeding ground for...
Read MoreAugust 2014: How Do Market Timers Perform?
You may have heard us profess that we don’t try to time markets because we believe it is extremely rare to find someone who has successfully done it over the long run. Well now there is more proof. Getting out of the market at the top is one thing, getting back in is another. Mark Hulbert has been tracking 160 financial newsletters since 1980 via his Hulbert Financial Digest. Mr. Hulbert recently wrote an article in the Wall Street Journal titled “Still Trying to Time the Stock Market? Read This First”1. In the article he cites the example of Richard Russell, the editor of the long...
Read MoreMarket Summary – Q2 2014
The year hit the half way mark with the major asset classes all showing positive returns. Real Estate funds soared in the second quarter, no doubt benefitting from new Fed Chairwoman Janet Yellen’s position to continue to use the Fed’s clout to keep interest rates low. Bonds also have enjoyed positive returns this year, confounding those who feared inflation and rising rates would erode bond prices. We wonder if the economic recovery no one believed is beginning to edge out the financial recession no one remembers. CNN Money displays a Fear and Greed Index1 in which six metrics are...
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