In December 2012, we launched the Sparrow Wealth Management online vault, which provides a secure location for all of your financial, tax, and estate documents. So far, roughly 90% of our clients have logged into the vault using the username and password that we sent via email. For those of you who haven’t logged in yet, please do so soon! […]
The Golden Ticket Trap
In a popular children’s story, the young hero pins all his hopes on finding one of a handful of “golden tickets” hidden among millions of candy bars. It seems many people approach investing the same way. The notion that the path to long-term wealth lies in locating secret and previously undiscovered treasures in the global marketplace of securities is one […]
Client Letter – Q4 2013
What an amazing year!! U.S. small and value asset classes earned over 40% returns, with large U.S. growth stocks and international stocks not far behind in the 20% and 30% percent range. The following chart shows the 1-year, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index: Market Returns for the […]
A lesson for young workers: Save as much as you can now
Here is a lesson to keep repeating to your children and grandchildren: it is easier to save $381 per month toward retirement than to save $5,778 per month. Seems simple, doesn’t it? Yet it might be the hardest financial chore a young person can undertake. The reward, however, is a secure retirement, rather than a decision to keep working or live […]
Marriage and wealth determine whether retirement is a success
What is the secret to leading a financially successful and healthy retirement? Accumulate wealth while you are working and stay married in retirement. And, for the best individual outcome, die before your spouse does. Those are some of the findings of a study done by three economics professors at MIT, Dartmouth, and Harvard. It seems obvious that accumulating wealth is one of the keys to […]
Simplicity and Sophistication
The Chinese philosopher Confucius once said that life is very simple, but we insist on making it complicated. You could say the same thing about investing. Complexity in investing often comes with a lack of transparency. The highly engineered and multilayered financial derivatives that contributed to the global financial crisis five years ago are a case in point. For many […]
Rate Expectations
Interest rates around the world are at historic lows. They can only go in one direction from here, right? And aren’t rising interest rates bad for bond investors? The truth might surprise you. Central banks in developed economies have injected extraordinary stimulus into the system since the recession arising from the global financial crisis five years ago. The stimulus has […]
Eugene Fama, recipient of the 2013 Nobel Laureate in Economic Sciences
Professor Eugene Fama of the University of Chicago was recently awarded the Sveriges Riksbanks Prize in Economic Sciences in Memory of Alfred Nobel for 2013. Professor Fama began his work in the 1960’s and is considered the “father of modern finance” as well as the creator of the “Efficient Market Hypothesis.” Professor Fama demonstrated that stock prices are extremely difficult to predict and […]
Client Letter – Q3 2013
During the past quarter, the international markets performed the best, with modest returns in the U.S. markets. The chart below shows the 3-month, 1-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index: Market Returns for the period ending September 30, 2013 DFA Fund / Index 3 Month Return 1 Year Return 10 […]
Congressional Inaction May Lead to Short-Term Pain
The stalemate over the federal budget and debt ceiling in Washington, D.C. has put the markets on edge and generated a lot of scary headlines. We are following events very closely, but we can make no certain prediction of the short-term outcome. We do know that if Congress does not raise the debt limit by Oct. 17 a technical default […]
