2018 Q2 Quarterly Update

Shares in larger domestic firms registered positive returns for the quarter with the Dow Jones Industrials up 1.26% and the S&P 500 advancing 3.43% for the ninety-day period. Small company stocks in the U.S. were the stellar performers for the quarter with a 7.75% return for the Russell 2000 Index. Measured in local currency larger… Read more »

2018 Q1 Quarterly Update

Back to normal: That may be one way to describe the recent volatility in the equity markets, following last year’s unusually steady upward trending stock returns. The CBOE Volatility Index (VIX) had one of its largest increases ever, surging 80% during the first quarter amid investor concerns about inflation, rising interest rates and global trade… Read more »

2017 Q4 Quarterly Update

By now we expect that you are aware that both the domestic and foreign equity markets enjoyed impressive results last year. The S&P 500 gained 21.8% for the12-month period and the Russell 2000 index of smaller U.S. companies was up 14.6%. In foreign markets, the MSCI Europe Index returned 25.6% for the year, aided by… Read more »

Change in Custody Rule for Assets

A No Action letter released by the SEC in February 2017 clarified its interpretation of the rule1 for asset custody. Quoting from a précis on the subject prepared by Fidelity Investments: The SEC has clarified that an adviser who has the power to disburse client funds to a third party under a standing letter of… Read more »

Observations on Risk Tolerance and Risk Capacity

The famous Temple of Apollo at Delphi—an important source of prophetic wisdom for the ancient Greeks—is well known for the two inscriptions on its portal: Know Thyself Nothing in Excess As several world capital markets continue to flirt with record high asset price levels, it is worth revisiting Delphic wisdom in order to prepare for… Read more »

2017 Q3 Quarterly Update

The world’s equity markets combined to produce strong returns during this year’s third quarter. The S&P 500 gained 4.48% and the MSCI EAFE Index of foreign stocks advanced 5.47%. Over the trailing 12 months, the MSCI All Country World Index has gained a remarkable 18.99%, after adjusting for foreign currency translation. Fixed income markets have… Read more »

2017 Q2 Quarterly Update

Stock prices continued their ascent in the second quarter, adding to the positive returns posted earlier in the year. The S&P 500 Index gained just over 3.0% for the three-month interval, pushing the year-to-date return to 9.3%. Following their stellar returns in 2016, share prices of smaller U.S. companies did not fare quite so well…. Read more »

2017 Q1 Quarterly Update

The U.S. stock market opened positively this year. Both the Dow Jones Industrial Average and the S&P 500 reached all-time highs, with a quarterly gain of 5.2% and 6.1%, respectively. Foreign markets advanced as well; the MSCI Europe Index outperformed the U.S. for the quarter, finishing up 7.6%. The MSCI Pacific Index closed out the… Read more »

Cooking up a Diversified Portfolio

A diversified portfolio owns securities from various markets – the bond market, the real estate market, and the stock market. Additionally, a diversified portfolio benefits from geographic diversification. This means that it typically owns both U.S. and foreign securities. By contrast, a “focused” portfolio owns only a few securities – often within just one market…. Read more »

Investment Themes: Fact or Fiction?

If you watch financial TV programs or read articles in the newspaper’s business section, you may notice an emphasis on “investment themes”. What investment themes will likely generate better portfolio returns? Will political themes outweigh economic themes? Will high corporate earnings boost investor sentiment; or, will high unemployment cast a dark shadow over investors? Investment… Read more »