This week we’ve seen US stock markets climb to new records, despite trade wars, political chaos, and overvaluation. The data says we’re at high risk, and the stock markets keep going up! The tactic of selling out and going to cash has been a miserable failure in the past. What has worked best has been the choice to simply keep our portfolios very diversified, allocate conservatively, and be patient.
Yes,Asian stock markets are being damaged by the nascent trade wars. At some point they are going to be bargains. My thought is that due to Asian growth and American confusion, the 21st Century is possibly going to be the Asian Century. That may happen with lots of volatility and angst. With that in mind, we’re already buying more, in small amounts and diversified. Our expectation in these high risk venues is to outperform the U.S.’s S&P 500 in the long run ten year time frame. https://www.bloomberg.com/news/articles/2018-09-12/asian-stocks-are-caught-in-the-longest-sell-off-in-16-years?cmpid=BBD091218_MKT&utm_medium=email&utm_source=newsletter&utm_term=180912&utm_campaign=markets
It turns out that healthy, positive lifestyles, good emotional skills, and education add to affluence too!
This study also dealt with affluence. So when we discuss plans for multi-generational wealth, we are inevitably also drawn to healthy lifestyles, good emotional skills, education, and robust, positive parenting. All these appear to affect health, longevity, and even affluence. https://www.businessinsider.com/things-that-make-people-live-longer-happier-lives-2018-8
Famed Economist Robert Shiller Sees Upside In Overvalued, High Risk Market. What’s An Investment Advisor To Do?
Happy Friday! As the world is being battered by two great storms (Hurricane Florence in the Carolinas and Super Typhoon Mangkhut in South Asia), our own U.S. stock market is overvalued, high risk, and climbing ever higher! But Nobel laureate economist Robert Shiller, who has successfully predicted past market debacles, feels that the stock market could still go a lot higher! So we are maintaining a highly diversified, somewhat conservative allocation, but we are NOT “cashing out” of stock market mutual funds. Reality: nobody knows what will really happen. https://www.bloomberg.com/news/articles/2018-09-14/shiller-says-u-s-stocks-could-go-a-lot-higher-before-dropping
Crypto looked like a bubble from very early on. It may still be essentially an institutional scam. But who knows what the future may bring? And who knows how blockchain technology might transform the world? Meanwhile we’re staying away from the frenzy.https://www.bloomberg.com/news/articles/2018-09-12/crypto-s-crash-just-surpassed-dot-com-levels-as-losses-reach-80?cmpid=BBD091218_MKT&utm_medium=email&utm_source=newsletter&utm_term=180912&utm_campaign=markets
I am in complete agreement that technical education is often as good as a college degree. Most important is to embrace the idea of some sort of education to mazimize our families’ earnings potential. In other words, in general, learning skills via education is often a great choice, anecdotes aside.
Goldman Sachs has released a report which warns of a potential stock market decline ahead. We don’t really know what will happen. Nevertheless I feel that it’s prudent to stay diversified and allocated to a relatively conservative spectrum of mutual funds. As the new Goldman Sachs report notes, “many investors are wondering how long the economic cycle and bull market can last, and what type of conditions could follow. The difficulty in answering these questions is that the current cycle has been difficult to pin down. It has been, and remains, a very unusual cycle, making historical comparisons less reliable.” https://www.zerohedge.com/news/2018-09-05/goldmans-bear-market-indicator-shows-crash-dead-ahead-asks-should-we-be-worried
It’s always a judgement call, even a guess, but if we are in good health and able to work, and there isn’t a giant nest egg or inheritance waiting, it’s often better to postpone drawing social security until the maximum age, which is 70. The reason for this is that benefits rise as we postpone. If we live longer than average, our decisions should (hopefully) pay off. https://www.marketwatch.com/story/why-people-who-claim-social-security-early-often-live-to-regret-it-2018-09-04?siteid=bigcharts&dist=bigcharts
Consider Putin’s efforts to rebuild the Russian empire from the standpoint of organized crime seeking to optimize itself financially. The amount of disinformation, hate-baiting, distraction, and violence is astonishing, but all that covers up an even more awsome level of mindful corruption. I believe that Putin intends to literally corrupt the entire western financial system for financial gain and political control. Is the Putin organization willing to destroy the financial underpinnings of the west? Probably only if it stands to gain financially. Thus our plan to keep investments simple and diversified seems appropriate. https://euobserver.com/justice/142726
Here’s an insightful study by Oppenheimer concerning the differences between India and China as investment venues. While emerging markets represent some of the fastest growing economies in the world, they also contain a lot of political risk, currency risk, and financial opacity. Often we can’t clearly see what is really happening! That means we can’t always recognize true bargains, so we can’t make well-supported decisions. Nevertheless, over the long term, carefully-targeted emerging market investments have a real probabilty of doing quite well. With that in mind, our emerging market holdings are diversified, analysis-driven, cautious, and small, as well as placed with experienced managers.