MFA Quarterly Commentaries

2016 Q1: Time, Diversification & Volatility of Returns

Posted by on Apr 15, 2016 in MFA Quarterly Commentaries

Although it didn’t start that way, the first three months of 2016 produced moderately positive returns for client portfolios.  At the midpoint of the quarter we saw headlines in the Wall Street Journal such as: “Stocks Tumble as Investors Flee to Safety”.  At times like this it can appear that we aren’t earning the returns we typically use in our long-term financial planning.  Investment returns are disappointingly low after two severe market corrections in the last fifteen years. Being diversified among different types of stocks as well as fixed income (bonds) allows us to ride...

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Market Summary – Q4 2015

Posted by on Jan 15, 2016 in MFA Quarterly Commentaries

Thank you all for hanging in through a fairly volatile year. With our collective long term time horizon, we continue to try to help clients calibrate their expectations so that the gyrations during a year such as 2015 are not unexpected. Outside the financial markets, surprises during 2015 include such events as the first Triple Crown winner in 37 years, the horrific Paris terrorist attack, and the first NBA championship for the Golden State Warriors in 40 years...

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Market Summary – Q3 2015

Posted by on Oct 23, 2015 in MFA Quarterly Commentaries

The choppy seas of the worlds’ stock markets in the three months ending September 30th felt particularly rough coming as they did on the heels of years of smooth sailing.  US Markets fell over 7% after a long string of quarterly gains during a sustained rebound that began with the market lows of the GFC (Great Financial Crisis) of 2007-2009.  For the first time since then we experienced a market correction, defined as a decline of 10% or more from a recent top. International Developed Markets fared even worse for the quarter (-10.57%) but the Emerging Markets suffered the most, falling...

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Market Summary – Q2 2015

Posted by on Jul 22, 2015 in MFA Quarterly Commentaries

The persistence of Greece’s financial woes and speculation about the potential exit of Greece (aka Grexit) from the European common market feels a bit like Ground Hog Day, in which Bill Murray lives the same day over and over throughout the movie until he executes that one day perfectly, start to finish.  There is no assurance of such a perfect ending for Greece – the opposite seems more likely – but the news stories concerning Hellenic finances in 2015 are remarkably similar to those of 2012. Greece’s economy is roughly the same size as Oregon’s.  This is no slight to...

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Market Summary – Q1 2015

Posted by on Apr 28, 2015 in MFA Quarterly Commentaries

Global currency is not something we normally spend a lot of time talking about. As a general rule, our international bond fund managers hedge their holdings against the changes in the value of their home currencies and the dollar.  The stock funds that we use, on the other hand, are generally not hedged. Global currency trading, measured by daily dollar volume, far exceeds stock and bond trading combined.  Price swings can be sudden, relatively large and quite unpredictable.  As seen in the chart to the right, over time changes in currency pales in comparison to stock prices. For this...

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Market Summary – Q4 2014

Posted by on Feb 4, 2015 in MFA Quarterly Commentaries

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...

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