Quarterly Thoughts – Q1 2012

Are you taking the right or wrong risks? Inflation is one of the various and worst risks investors must consider in the long-run. Inflation is currently lower than historical averages due, in part, to the slow economic recovery. However, the prices of goods and services tend, eventually, to rise after a period of eased or stimulative government “monetary policy,” such as we have seen in recent years. Regardless of short-term…

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Quarterly Thoughts – Q4 2011

Instincts are sometimes critical for survival. If you experience fear of physical danger, your instinct may be what saves your life or the life of others. Before you’ve had time to think, fear triggers an automatic response that may cause you to run, duck, jump or fight. Unfortunately, an increasing number of behavioral finance studies show that instinct and investing often mix poorly. The human brain often responds to concern…

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Quarterly Thoughts – Q3 2011

By the first half of 2011, after a post-crash jump in investment prices, many disciplined investors felt a material level of financial and emotional recovery from the 2007-2009 credit crisis market. The third quarter of 2011, however, was a reminder that the bumpy road to full recovery is not yet over, as the world slipped on Greece (how about that pun!?). Small economies can sometimes be the tail that wags…

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Quarterly Thoughts – Q2 2011

Who is on your side? Insightfully, when asked what his profession was in the 1979 film “Manhattan”, Woody Allen’s character responded, “I’m a stock broker. My job is to invest people’s money until it is all gone… I’m frequently wrong, but never uncertain.” Sadly, most investors still aren’t clear about the difference between securities salespeople, i.e. “brokers” or commission-based or fee-based “advisors” (i.e. accepts fees AND commissions, unlike fee-only advisors),…

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Quarterly Thoughts – Q1 2011

“The only certainty is that nothing is certain” ~ Pliny the Elder, First century Roman. Despite major unrest in parts of Northern Africa and the Middle East, a massive earthquake, the subsequent tsunami and partial nuclear meltdown in Japan, renewed sovereign debt concerns in Europe, and continuing inflationary pressures in certain emerging market countries, the global economic recovery pushed on. If recent events teach us all anything, it is that…

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Year-end 2010

To start the new year, let’s take a look back at 2010 from an investment perspective. For the second year in a row, stock markets rose more than the historical averages. Bonds were also positive for the year. Discipline was again important… 8 months into the year the S&P 500 Index was down 5.8%, but later surged to a 15.1% gain for the year, recouping all of its losses since…

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Quarterly Thoughts – Q3 2010

Maintaining reasonable expectations, embracing the sometimes uncomfortable reality of incertitude, and living within one’s means, are fundamental to defining and achieving realistic goals. Referring to unpredictability, Benjamin Franklin once said that “nothing can be said to be certain except for death and taxes.” Behavior finance research increasingly suggests that another near-certainty is that the human brain is wired to make investment mistakes if not properly trained. WealthStep helps educate clients…

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Quarterly Thoughts – Q2 2010

After feeling some recovery related relief after the market bottom in March, 2009, the bumpy last few months are making some investors nervous. Such recovery related dips, however, are not inconsistent with previous strong markets. There have been 11 bull markets since 1945, and during those markets there was a correction of 10% on average, in the 11th month of those recovery markets (this recent correction occurred in the 14th…

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