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 […]
The Impact of the U.S. Government Shutdown On the Markets
Stocks markets worldwide declined Monday as the U.S. government faced a shutdown due to the Congressional budget stalemate. Today, markets rose, even though the shutdown occurred. Here are some considerations for investors: As long as this is a short-term event, it should have little economic or market impact. Political events drive markets only in the short-term; the economy and corporate profits […]
What We’ve Learned Five Years After the 2008 Crisis
Five years ago this month the world’s financial markets endured one of their biggest crises ever. Lehman Brothers Holdings failed, igniting a firestorm. Within days the unthinkable occurred: Insurance giant AIG and government mortgage agencies Freddie Mac and Fannie Mae were taken over by the federal government. The storied investment house of Merrill Lynch was taken over by Bank of […]
More Stocks Can Mean a More Secure Retirement
Some people who are about to retire make a big mistake: They keep too much of their retirement portfolio in “safe” fixed-income investments, and not enough in “risky” stocks. Some also make another mistake in retirement: They take too much money out in certain years, making it hard for the portfolio to recover from bear markets. Financial writer Paul Merriman […]
Client Letter – Q2 2013
A quick period of readjustment over the last six weeks depressed portfolio returns in the second quarter, but we think the markets are now more realistically priced and may be poised to resume their upward momentum later this year. The following chart shows the 3-month, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the […]
The Art of Letting Go
In many areas of life, intense activity and constant monitoring of results represent the path to success. In investment, that approach gets turned on its head. The Chinese philosophy of Taoism has a word for it: “wuwei.” It literally means “non-doing.” In other words, the busier we are with our long-term investments and the more we tinker, the less likely […]
“You Have to Be in Gold”
“We are living in a world of money printing. … That is why I have to recommend gold again. … Once gold surpasses $1,800 an ounce, it will run to the low-to-mid $2,000s.” Quotation attributed to Felix Zuelauf, Zuelauf Asset Management. “Here’s What’s Cooking for 2013,” Barron’s, January 21, 2013. “Investors can choose between artificially priced financial assets or real assets like […]
Buying and holding still works despite stock market volatility
The perception that day-to-day stock market volatility has increased may convince some investors that they should be trading within their portfolios frequently. Indeed, lots of stock market commentators love to talk about “the action this afternoon” and “what investors should be doing right now.” How about just sitting on their hands? It may come as a surprise but some of […]
Forget economic growth: Stocks compensate for risk
Periodic arguments that long-term stock market returns are a thing of the past have cropped up again, with noted bond investment manager Bill Gross calling the stock market a “Ponzi scheme.” He argues that U.S. stocks returned 6.6 percent per year over inflation during the last century, while gross domestic product, a measure of changes in the country’s production of […]
