Once people find out I’m an investment manager, I’m often asked, “What should I be invested in?” Here’s the answer. For an investment portfolio to do well and stand the test of time, it should have these four elements: 1. It should be diversified. 2. Its mix of stocks and bonds should be consistent with your…
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Last week’s stronger-than-expected jobs report blew apart the expectation that the Federal Reserve would stay on the sidelines until next year to raise interest rates. Here’s a graph of the market’s expectations: So now what? Does that mean you should dump your bonds? A lot of people have been playing it safe for the…
DetailsFees are one the biggest factors that you can control that play one of the largest roles in your long term investment performance (source). In addition, with valuations near the upper end of their historical range (source), and estimates of long term returns in stocks reaching only 3-4% (source) (today’s CAPE ratio of 25.6 roughly translates…
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Gordon Gecko is famous for uttering the phrase, “Greed is good.” From a stock market perspective, however, I’d like to turn that phrase on its head and say, “Fear is good.” And here’s why: when you take a look at the historical relationship between the stock market and heightened periods of fear (which can be…
DetailsWhen the Dow plunged over 1,000 points this morning (8/24/2015), two things should have become clear to the casual observer: 1. No matter what stock you were in, it got pummeled. Correlations for all stocks stand at around 80%. Home Depot (HD) and Microsoft (MSFT), despite being in different industries, both dropped 3.1%. 2. International…
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