News

Goldman Sachs on "Putting the Market Selloff into Perspective"

In our view, global markets’ rocky start to 2016 illustrates the challenges – but also the importance – of making sound long-term investment decisions.

Saving isn’t just for common folk

By Stephen Hart

Marshawn Lynch is retiring at age 29. Marshawn Lynch has also saved all $50 million he earned from playing, and instead lived on endorsement money.

During last night’s Super Bowl game, you may have heard that Seattle Seahawk “Beastmode” running back Marshawn Lynch announced his retirement via social media, at the ripe old age of 29. Lynch was drafted #12 in the 2007 draft and signed a 5-year $19 million deal with the Buffalo Bills, of which he took about $14 million. He then moved to Seattle signing a 4-year $30 million contract, which was re-upped in 2014 for another 2 years at $24 million, which he won’t finish out.

 

As Goes January, So Goes The Year?

Avoid jumping to conclusions and the urge to make market predictions based on current or past performance.

By Brent Everett

A friend forwarded me an email from another advisor with “As Goes January, So Goes the Year” in the subject line. The email's subject line is a reference to the “January Effect” myth. Curiously, though, there is no further mention of any correlation between January monthly returns and subsequent returns in the body of the email. This sort of marketing material is common among advisors who understand that one of the most effective sales strategies is to play on fear. It’s designed to catch your attention, particularly if you’re already worried, but probably not deceptive enough to draw the attention of the regulatory authorities.

DFA | A Vanishing Value Premium?

Guest Columnist Weston Wellington, VP of Dimensional Fund Advisors (DFA)

Value stocks underperformed growth stocks by a material margin in the US last year. However, the magnitude and duration of the recent negative value premium are not unprecedented. This column reviews a previous period when challenging performance caused many to question the benefits of value investing. The subsequent results serve as a reminder about the importance of discipline.

DFA | 2016: 10 Predictions to Count On

Guest feature by Dimesional's Vice President Jim Parker

The New Year is a customary time to speculate. In a digital age, when past forecasts are available online, market and media professionals find it harder to hide their blushes when their financial predictions go awry. But there are ways around that.

Click here to read the full article on Dimesional's site: https://my.dimensional.com/csmedia/cms/outside_the_flags/2016/01/2016tenp_4/Ten_Predictions_to_Count_On_US.pdf.

 

Performance of Premiums in the Equity Markets

A key concept in understanding our investment philosophy is tilting portfolios toward factors that produce excess return. In this presentation, we examine the market, company size, relative price and profitability premiums over time.

Alternatives - A Powerful Tool for Diversification

By Brent Everett

Most investors have traditionally relied on only two sources of risk and return in portfolios - stocks and bonds. Alternatives seek to provide access to other sources of risk and return, with the potential benefits of reducing the risk of an investor's overall portfolio, improving returns, or both. Historically, many alternative strategies have also helped investors reduce losses in weak economic environments, providing additional portfolio benefits. For example, alternative investment strategies outperformed the stock market during stress periods including the "tech bubble" (January 1999 - March 2000), the following "tech bust" (April 2000 - July 2002) and the global financial crisis (July 2007 - March 2009).1

An Often Overlooked, Yet Critical, Component To Protecting Wealth

By Paxton Kelso

As we watch Democrats and Republicans begin to position themselves for a run at the White House in 2016, all the issues tie back to two central principles: how can we protect America, and how can we make her prosperous?

Our portfolios and financial plans are no different. Every discussion point ties back to how can we protect our wealth and how can we grow it. The subject of growing it is usually the more attractive piece. People tend to be on an ongoing quest to grow their wealth and depending on your investment style, there are many ways to do this. Meanwhile, protecting the money you are working so hard to save seems less exciting. Items like insurance and emergency funds just don’t draw the crowds the same way. But if you were asked for the single most important form of protection for your finances, how would you answer?

Knowns and Unknowns

By Brent Everett

"...As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones." -- Donald Rumsfeld, Secretary of Defense

This quote has received a lot of attention because it's a brilliant distillation of a complex matter. And, it applies perfectly to investing - in which there are many unknowns of both types. In fact, the more you know about investing and the more you learn, the more you realize what truly are "unknowns." Another way to say this is that unknown unknowns become known unknowns. Even the greatest portfolio managers are humbled by the difficulty of creating excess return in a highly efficient market, but overconfident amateurs frequently believe it's relatively easy.

Sequence of Return Risk

By Brent Everett

What is it and why does it matter?

Financial planners frequently advise investors to reduce exposure to risky assets as they approach retirement. Intuitively, you probably understand that a few years of bad returns can have an impact on the sustainability of your portfolio, but do you realize how big that impact can be?

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