Maintaining Perspective in Uncertain Times
Mar 11, 2020
“History does not repeat itself, but it often rhymes.” – Often Attributed to Mark Twain
Eleven years ago Monday, March 9th, 2009, marked the bottom of the bear market of the great financial crisis of 2007-09. I was struck by the irony that eleven years to the day we found ourselves in the midst of another global panic. But this time the fear feels different. Right now, we not only perceive a threat to our financial security, but also to our fundamental health and well-being.
Mid-Year Review and Presidential Election Stock Returns
Aug 27, 2019
In the second quarter of 2019, stocks continued their year-long climb: global equities rose just over 3.5% and are now up over 16% as of the end of June. Domestic stocks fared marginally better than international equities. Last quarter, large US companies went up over 4% and, year-to-date, are up over 18%. Developed-foreign stocks rose over 3.5% and are up 14% year-to-date. Emerging-markets stocks rose under 1% and, as of the end of the quarter, are up more than 10%. The US bond market also went up significantly during the first half of the year. US bonds rose about 3% in each of the first two quarters and is now up over 6% for the year.
The Inverted Yield Curve: Harbinger of Doom or Yoga Position?
Aug 26, 2019
It took only three months for the markets to come back and then some: from January through March, global equities rose just over 12%. Despite these substantial gains, some investors have expressed pessimism about future returns due to the presence of an “inverted yield curve.” Over the past few months, we’ve seen many articles and news segments stating that the presence of an “inverted yield curve” has “predicted” a recession every time.
Today we’ll explain what a yield curve is, what an inversion means, and why an inverted curve doesn’t necessarily mean a looming recession and/or poor returns.
2018 in Review: The Year of the Bear Cub
Jan 31, 2019
Most investors are happy to put 2018 behind them. To our eye, 2018 provided a dramatic rejoinder to the robust returns of 2017. That year the global equity markets, represented by the MSCI All Country World Index, rose over 20%, with emerging markets soaring over 37%. Last year, however, the equity markets returned some of those gains. Global equities were down about 9.5%. US stocks, represented by the S&P 500 Index, fared better than developed-foreign markets, represented by the MSCI EAFE Index, which went down 4.4% and 13.8%, respectively. Emerging markets fared the worst, dropping 14.6%.
Elon Musk and Tesla: A Case Study on Growth Stocks and Idiosyncratic Risk
Nov 09, 2018
Investing involves risk. When most people think of investment risk, they tend to think of “market risk”: the risk that broad economic factors will impact stock markets. Not surprisingly, that’s also what we tend to focus on in our writings, e.g., changes in interest rates, trade agreements (or disagreements), government spending, and tax policy. Any or all of these elements can shed light on the question most frequently asked by commenters and clients: “What’s going on in the markets?”
Investing with Purpose
Aug 01, 2018
Some clients have wondered whether investments can help make a change. Not only investing “for” a purpose but investing “with” purpose. Not only “Can I make a difference by investing?” but also “Can my investments make a difference?” The easy answer is yes. There is a large and growing number of purposeful investment options. But the full answer is more complex.
Wealth and Well-being
Jun 06, 2018
Research findings confirm two things central to our philosophy at Wealth Architects. First, our wealth and well-being are much greater than just our money. Second, although much of life is uncertain and out of our control, what we can do to achieve greater wealth and well-being is within our control.
Bitcoin and Cryptocurrency: Sound Investment, Bubble, or… Something Else?
Jun 01, 2018
Bitcoin and other “cryptocurrencies” had quite a year in 2017. Once the province of techies, libertarians, and gray-market traffickers, Bitcoin exploded into the mainstream. We’ll explain (briefly) how cryptocurrencies work; discuss whether we consider them to be an investment, bubble, or something else; and suggest some guidelines for clients considering buying Bitcoin.
The U.S. Debt Ceiling and Investment ‘Safety’
May 29, 2018
Questions arise regarding U.S. Treasury bonds, something called the “Debt Ceiling,” and whether the United States will default on its debt. We’ll discuss Treasuries, the Debt Ceiling, default and the broader implications for thinking about and managing risk in our own investments and lives.
The Tale of Jozef Gozanski and Investment Advice for Current Times
May 23, 2018
Since the election, some clients have expressed uncertainly or fear regarding the direction of the president and his administration. After sharing their feelings, clients tell me they’re worried something bad might happen and ask whether I understand. Yes. And yet I recognize it’s vital for both advisors and clients to separate emotions and political beliefs from financial decisions.