Diversification and caution are key in emerging markets!

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...

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Why intergenerational wealth is as rare as platypuses.

It really IS possible to blow a billion dollar fortune. In fact it’s probable. Study how the Vanderbilts lost the unloseable fortune: drama, lack of diversification, and dissipation. You will see why it’s so hard to master intergenerational wealth. https://www.forbes.com/sites/natalierobehmed/2014/07/14/the-vanderbilts-how-american-royalty-lost-their-crown-jewels/#33c197bf353b

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Something’s happening here. What it is..

My last entry on January 30th, 2018, suggested that US stock markets were potentially overvalued. Apparently others agreed with that assessment, because early in February, in the face of rising interest rates, American stock markets dropped (almost) 10%. At that point I was guessing…a perfect word for it…that the financial markets would continue to decline to more reasonable levels. However, I chose to do no trading because I wasn’t confident. Good choice. This week, U.S....

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Successful stock market indicator warns of trouble ahead!!! (yada, yada)

As the accompanying article spells out, the Value Line Manager’s Appreciation Potential statistic is now 20%. This suggests that the stock market is more overvalued than it has been since 1969. Read the article here. The Value Line Appreciation Statistic has been giving off overvaluation signals since 2013. It’s been screaming of imminent disaster since 2015. THIS IS WHY we have been so conservatively allocated. Yet, in hindsight, our allocations have been too conservative because...

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Focus on the long term

I was reminded of that today when a client called up and asked what return he could expect on his investments. I said we really can’t predict, but a long term average of 7% has historically been both attractive and doable, with discipline. We really can’t say what the future will bring. What does “discipline” mean? To some degree it means that we ignore the day to day noise and focus on long term realities....

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Cryptocurrencies?

2017 has been an astonishing year so far, and the most amazing part of it has been the rise of the cryptocurrencies, such as bitcoin. They are up literally thousands of percentage points in 2017 alone. Yet many of us (me included) are still struggling to understand what essential function is fulfilled by the creation and existence of cryptocurrencies, unless you need complete stealth in your financial transactions. One possible value is that by design...

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Thirty years ago

Thirty years ago this week I was beginning what was then a very novel business model: fee-only, no commissions. I was working at Christopher Weil, Inc, after a few years at E.F. Hutton. The consensus among the veterans was that fee-only could never work. Now it’s the industry standard, and I was present at the beginning. Much to the chagrin of some of my managers, I had moved my clients’ accounts to safer positions because...

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Gone and mostly forgotten.

Ten years ago today, the S&P 500 U.S. stock market index hit its record high before falling about 57% in the Financial Panic of 2008. It recovered in March, 2013. Before the meltdown, there were already major issues in the financial system which were larger and more dramatic than what we are facing today. So is such a meltdown imminent now? If so, I can’t see it. But valuations and debt levels are again high. How...

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60% of a bag full of slow

The stock markets of the world appear to be impervious to every current geopolitical event, including the threat of nuclear terrorism and serial hurricanes, while a growing number of writers are shrieking that the end of the financial world is nigh. (Read the latest apocalyptic broadcast here.) Hmmm. I have my doubts, but there’s a lot of smoke in the air. Conditions being what they are, last week I moved 5% in many clients’ accounts from...

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