Quarterly Newsletter – January 2017

What to make of Donald Trump? This is a complex question – given that equity markets are thrilled by the prospect of a Trump Presidency while at the same time many Americans are horrified or frightened by the thought. Markets are rising because consumer confidence is rising. People are now more confident than they were before that their incomes will …

Quarterly Newsletter – October 2016

October 15, 2016 Dear Client, Well now – that was quick. In our last quarterly report to you the performance for the previous twelve months (then 6/30/2015 through 6/30/2016) was not especially good. It was either very low single digits or else negative.  International stocks and emerging markets stood out as poor performers, reducing your overall return.  So what did …

Quarterly Newsletter – July 2016

July, 15 2016 Dear Client, Brexit has happened. Justified or no, wise or not, the British vote to leave the EU was a shock to the markets. And it provides, in real time, a lesson in our way of investing. The vote to leave was very much unexpected. Various polls and betting sites in England had been predicting a narrow …

Quarterly Newsletter – April 2016

April 15, 2016 Dear Client, We said in our last letter that if the Federal Reserve were to stop threatening to raise rates the bad markets of late last year and early this year would likely reverse and go up. Janet Yellen must have read our letter. They did stop the threats and the markets have reacted very favorably. But …

Quarterly Newsletter – January 2016

January 15, 2016 Dear client, We are in a period of market volatility – that is clear. It seems scary. Is it scary? There is certainly a way of framing it, thinking about it that can make it scary. It is at the beginning of the year – so perhaps it will set the pattern for the whole year. And …

Quarterly Newsletter – October 2015

October 15, 2015 Dear Client, Should they do it or not?  And will they do it or not? And what will happen if they do do it? And what will happen if they do not do it? This sounds like a Shakespearian comedy plot. But it is no comedy, and a wrong decision would be neither fun nor funny. The …

Quarterly Newsletter – July 2015

July 15, 2015 Dear Client, This letter is going to be about diversification, rebalancing, and international investing. Both U.S and international markets have had a remarkable recovery from the 2007-2009 crash. During the crash we rebalanced against the fall in stock prices by selling bonds and buying stocks. As the recovery unfolded and stock markets rose we were selling stocks …

Quarterly Newsletter – April 2015

April 15, 2015 Dear Client, It can sometimes look as if the world is going straight to heck. Russia is behaving badly. China is re-arming – to what end no-one really knows. The Middle East seems to be at the start of a total religious war – Sunni vs Shia. Greece may well default and leave the Euro. And German …

Quarterly Newsletter – January 2015

January 15, 2015 Dear Client, Human psychology is what it is. If something feels good let’s do it again. If it feels bad let’s stop. Doing well (making money) feels good. Doing badly (losing money) feels bad. Put these together and standard investor behavior emerges – sell what has done badly and buy what has done well. This is called …

Quarterly Newsletter – October 2014

October 15, 2014 Dear Client, We have discussed our investment method many times in these letters. It is passive, based on the idea that equity markets cannot be predicted and that a reasonable way to invest is to just buy broadly constructed index style mutual funds, be very diversified, be patient, and rebalance. The commitment to rebalancing means that we …