Client Letter – Q2 2014

During the past quarter, REITs performed exceptionally well, with emerging markets stocks coming in with respectable returns also. The U.S. and international markets delivered positive returns in all asset classes. The following chart shows the 3-month, 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 period ending […]

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Seven Ways to Fool Yourself

The philosopher Ludwig Wittgenstein once said that nothing is as difficult for people as not deceiving themselves. But while most self-delusions are relatively costless, those relating to investment can come with a hefty price tag. We delude ourselves for a number of reasons, but one of the principal causes is a need to protect our own egos. So we look […]

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Want to retire but cannot control the markets? Save more

The old saying about not worrying about things we can’t control and concentrating on those things we can control applies to retirement planning, says Vanguard, the large mutual fund company. It conducted a study of market returns, savings rates, and investment horizons as they relate to retirement success. It found that savings rates are very important. “Our conclusions reinforce that the […]

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Client Letter – Q1 2014

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!  […]

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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 […]

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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 […]

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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 […]

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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 […]

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