MFA Insights

Feb 2018: Welcome Back Volatility

Posted by on Feb 16, 2018 in MFA Insights

After an unusually long run of particularly calm and rewarding markets, volatility is back. Looking back, 2017 offered an especially mellow ride for investors. The largest daily drop in the S&P 500 in 2017 was -1.82%. The largest daily gain was 1.37%. And the index ended the year up 18.7%. 2018 began in the same vein as January produced 10 record highs in 13 days. All this calm and all of these positive returns may have lulled investors into feeling that this was normal (“Hey, we could get used to this!”) Then, with more drama than an Olympic downhill run, volatility returned in the...

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May 2017: Two Truths About Stock Market Returns

Posted by on May 21, 2017 in MFA Insights

There are two investment dictates you’ve certainly heard from us: Make sure that you are broadly diversified and stay fully invested. You understand that being broadly diversified across many stocks reduces your risk of being over-concentrated in one or a few stocks that risk suffering a poor fate. You also understand that, as much as we wish we could time the market by being in while it’s rising and out when it’s not, there is no crystal ball or proven reliable method for determining this correctly and consistently. Today we want to share with you a couple of extraordinary statistics...

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Feb 2017 – Determining market direction related to average returns

Posted by on Feb 9, 2017 in MFA Insights, Uncategorized

Bestselling author Michael Lewis has another hit on the shelves, “The Undoing Project” in which he profiles the fascinating collaboration of two Israeli born psychologists Daniel Kahneman and Amos Tversky whose research, writing and teaching challenges the way we think. It points out the flaws of our mental wiring that were largely soldered into place thousands of years ago and haven’t caught up with modern realities. Mr. Lewis’s compelling read had us going back to one of our favorites, Daniel Kahneman’s 2011 book, “Thinking, Fast and Slow”. Dr. Kahneman, a psychologist, was awarded a Nobel Prize in Economics in 2002 for the work he did in the field now widely known as Behavioral Economics. We used his thinking to take a look at the surprising gains of the stock market since the recent election.

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Nov 2016 – Election Results: Hold the Course

Posted by on Nov 9, 2016 in MFA Insights

It’s done and decided. Trump wins. Markets are actually rallying today and reacting relatively calmly. Will your investment portfolio be OK? Yes. As always, what happens in the short-term is unpredictable. And that’s OK since we are investors, not speculators.

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Aug 2016 – Why it can be hard to make money in the stock market

Posted by on Aug 17, 2016 in MFA Insights

Hint: It’s not what you think, it’s what you feel. One of the greatest ironies of investing is that some of the simplest advice is often the most important and the most difficult to stick to. For years, decades even, we have advocated “profits through patience”, accepting the returns the global stock markets provide without the need to outguess the next short term move. Through wars, recessions, elections, natural disasters and other major news events, persistence has paid off. $1,000 invested in the US Stock Market (S&P 5001) in January of 1970 grew to just under $90,000...

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June 2016 – Brexit Commentary

Posted by on Jun 24, 2016 in MFA Insights

The "Brexit" vote has already had an immediate short term impact on global stock markets largely because speculators had positioned themselves on Monday for the opposite outcome - for the UK to remain in the EU. Fortunately for us, we invest with goals set for the long term...

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