Monthly Archives: June 2016

How might #Brexit affect your investments?

 

Just a quick note to share an article I just read which provides some perspective on the Brexit situation.

 

Read the article

 

 

 

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How do you make money in the stock market?

 

How do you make money in the stock market?
"Buy low and sell high." Everybody knows the answer to this question. It is the knee-jerk response, and it is correct. Sounds easy, right? It is simple, but not easy.

To apply the principle of buying low usually means buying when others are selling, buying when there is bad news, buying when the headlines are telling you to be afraid, buying when the recent track record is not favorable, being the only one in the buying line when the selling line is out the door. Buying low is unpopular and lonely.


Likewise, selling high is not as easy as it sounds. In practice, selling high entails getting rid of your winners, letting go of your best performers, firing your star player - right after he just got a perfect five stars on his most recent performance evaluation, leaving the party when its getting really good. How can you be so cold-hearted as to leave the one that brought you to the dance? Then, you take the proceeds from the sale (betrayal) of your darling, and you dump it into what on the surface appears to be a total dud.

 

Now imagine doing that with other people's money - while they are watching you. Imagine trying to explain why you got rid of the best-performing stock in the portfolio (aka: selling high), and why you turned around and bought the laggard that has been making headlines for all the wrong reasons (aka: buying low). It is not surprising few managers are able to beat the markets. To do so requires patience, discipline, and the ability to harness your emotions and to think for yourself. It requires the ability to think rationally and to set guidelines, and then to follow the guidelines diligently. Please feel free to call or email us to learn more about how we apply the simple maxim - Buy Low, Sell High.

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Buy stocks like you buy groceries, not like you buy perfume.

 

 

farmersmarket

In my habit of regularly re-reading Benjamin Graham's classic - The Intelligent Investor - I came across a great quote I feel compelled to share with you:

"The habit of relating what is paid to what is being offered is an invaluable trait in investment. In an article in a women's magazine many years ago, we advised the readers to buy their stocks as they bought their groceries, not as they bought their perfume. The really dreadful losses of the past few years (and on many similar occasions before) were realized in those common-stock issues where the buyer forgot to ask, 'How much?'"

Graham, Benjamin, The Intelligent Investor - Revised Edition, 1973. p.8.

Graham gives us a great analogy that we can learn much from: buy stocks like you buy groceries, not like you buy your perfume. Shop for value, compare, consider the ingredients, think about what you are going to need for the meal you are about to prepare, and never go to the grocery store on an empty stomach.

There is a lot of analysis that goes into the selection of the securities in our portfolio. Our goal is to buy the finest quality companies at reasonable prices, not the trendy scent in the fancy packaging.

If you would like a deeper glimpse into our investment process, our portfolio construction, and our historical returns, please feel free to contact us. We would be happy to sit down with you.

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How the longevity boom is disrupting retirement and Warren Buffett’s businesses

 

Senior couple after exercise(9)

I want to share with you an interesting article about the longevity boom. There has been increasing press coverage about the rapid rise in life expectancy, and how it is changing the landscape is so many areas. This article highlights just two of those areas: insurance companies and benefit programs. What if "the golden years" turn up to be 20-30 years or more? It's definitely something to think about and to try to be prepared for.

 

Read the article

 

 

 

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May 2016 Economic Outlook Update

 

May 2016 Economic Outookl

View the May Economic Outlook Update report here.

In our monthly economic outlook, we look at the three components of a healthy economy: full employment, stable prices, and economic growth. We track three economic indicators to gauge the health of the economy, more specifically, to gauge whether the economy is getting better or getting worse:

Unemployment numbers to monitor employment
• The Consumer Price Index (CPI) – to monitor
prices / inflation
Manufacturing Output – to track economic growth
We provide the monthly updated data for you
(quarterly for manufacturing output), as well as a
brief commentary on each.

If you'd like to discuss how this data might affect your investment portfolio or your long-term plans, please feel free to contact us to arrange a time to meet either in person or via phone call. We welcome the opportunity to sit down and strategize with you.

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