Market Commentary January 2013
Financial markets did very well in 2012, with stocks returning 16%-18%, which is significantly above long-term averages. During the fourth quarter markets seemed to cling to an assumption that the fiscal cliff would be averted, or at least end in something less than a catastrophe. Domestic stocks ended the quarter very close to where they […]
Investor Behavior: Market Timing Pitfalls
Dalbar, an independent communications and research firm, has done countless studies trying to quantify the impact of investor behavior on real-life returns. Their studies focus on the difference between investors’ actual returns in stock funds to the average return of the funds themselves. Basically, they are comparing the return the investor gets to the return […]
Four Ways the Financial Media Causes Investors Harm
ONE: Focus on the near term. A recent headline reads, Anxious financial advisers scale back summer vacations. “Still haunted by the 2008 financial crisis, many financial advisers are scaling back their summer vacations or giving up on them entirely. Many are afraid to be out of the office in case this is the third straight […]
2011 Review and 2012 Plans
Over the holidays, many of our clients and friends asked how business is going. I thought it would be a good time to provide an update on Rockbridge Investment Management and what we are looking forward to in the New Year. Financial Results As a firm, Rockbridge continues to grow steadily. Over the past two […]
Five Reasons You Should Not Panic in the Face of Market Volatility
1. It is not really “different this time.” Vanguard, in a recent study entitled “Stock Market Volatility: Extraordinary or ‘Ordinary’?”, concludes that recent volatility appears extraordinary compared to the relative calm of the markets in 2010, but is in fact “ordinary” when compared to similar periods characterized by major global macro events – they cite […]
Market Analysis
Renewed fears of a double-dip recession, policy paralysis across the U.S. and Europe, and the looming threat of a financial crisis in the euro zone combined to create very volatile markets and a devastating quarter for equities. Equity Markets The third quarter of 2011 saw the value of small stocks and international stocks fall more […]
Retirement Income Strategies
I was recently challenged by an investor couple attempting to determine the amount of annual spending they can make based on their portfolio. How, they asked, can we make a rational decision when we do not know the future return in investment markets, the future rate of inflation or their life expectancy? My general rule […]
More on Portfolio Inflation Strategies
\A May 2011 lengthy article by Gahagan and Martin, suggests a modest, permanent allocation to inflation-hedging -assets , such as TIPS, commodity futures, and REITs. The interesting part of the article is a discussion of how different inflation-hedging assets perform across the inflation cycle. For example, TIPS perform best in an inflationary period of less […]
Hedging Inflation: Comparing Commodity Futures and TIPs
I have generally recommended the use of Treasury Inflation Protected Securities (TIPs) as a hedge against inflation. Are Commodity Futures an attractive inflation hedge similar to TIPs? In a March 2011 article, author Geetesh Bhardwaj, addresses the use of various investments as a hedge against unexpected inflation. (Let me know if you would like a […]
Market Update
The second quarter of 2011 provided a rollercoaster ride in the stock market that will look uneventful in the history books. April was a strong month for the market, but by mid-June the S&P 500 had fallen more than 7% from its April high, erasing the first quarter gains and falling back to where it […]