As you are probably aware, we’ve had an “interesting” week in the markets. Investors are understandably anxious given the recent volatility. A few of the headlines you may have seen include: The Dow’s more than 1,000-point drop this week was the largest weekly drop since the week ended Oct. 10, 2008. The S&P 500 declined 3.2%, taking its losses from […]
Client Letter – Q2 2015
Welcome to your first online quarterly letter! Sparrow Wealth Management is very excited to go paperless with our quarterly reporting and billing process. We have appreciated your cooperation as we migrated every client to our new eMoney software. Your quarterly reports and bills can now be found in the “Orion” folder in your eMoney vault. We have also moved your […]
The Seven Roles of an Advisor
What is a financial advisor for? One view is that advisors have unique insights into market direction that give their clients an advantage. But of the many roles a professional advisor should play, soothsayer is not one of them. The truth is that no one knows what will happen next in investment markets. And if anyone really did have a […]
Cast in Iron
The media occasionally locks in on a particular ‘hot’ sector. In the late 1990s, it was technology. In the mid-2000s, it was mining. Writing headlines about fashionable sectors is one thing. Building investment strategies around them is another. A reason journalists focus on particular industries or sectors is that these stories fit into a chosen narrative. In the case of […]
Client Letter – Q1 2015
In early March, we sent out an email announcing our plans to migrate our technology to cloud-based software, which will positively change the way that we deliver our services. The time has come, and we will be rolling out these exciting changes over the next few months. With these advances in our technology, we will be able to offer our […]
Weather vs. Climate
Notice how TV news bulletins put finance next to the weather report? In each, talking heads point at charts and intone about intraday events that are quickly forgotten. Meanwhile, the long-term wealth building story gets overlooked. Many investors feel that they are not properly informed about the financial world unless they have checked daily, or even hourly, on how the […]
Familiarity Bias: Don’t “Invest In What You Know”
Every investor is familiar with the phrase, “invest in what you know.” Taking this advice leads to an undiversified portfolio with higher risks and lower returns. This psychological tendency is called familiarity bias, which must be avoided in order to become a diversified investor. I’ve noticed that many people have a significant portion of their retirement savings devoted to their […]
MasterChef of Investing
In the popular TV program MasterChef, contestants face a series of cooking challenges. From low quality ingredients to inadequate preparation and poor implementation, so many things can, and do, go wrong. It is a bit like investing. In the world of investment, there customarily are two broad approaches. The first is a traditionally active one: Managers attempt to find mispriced securities […]
Discipline: Your Secret Weapon
Working with markets, understanding risk and return, diversifying and portfolio structure—we’ve heard the lessons of sound investing over and over. But so often the most important factor between success and failure is ourselves. The recent rocky period in financial markets has brought to the surface some familiar emotions for many, including a strong urge to try to time the market. […]
The Media: Friend or Foe?
The media can be a major detriment to your investment success. Every day investors are inundated with all the latest news from fast talking commentators like Jim Cramer and major financial magazines such as Fortune and BusinessWeek. Unfortunately, listening to what these sources have to say and adopting their recommendations could have a damaging effect to your long term wealth. Only […]
