Chasing Yield: A Seductive Yet Dangerous Game For Investors

Most of the third quarter was marked by tranquility in the financial markets, with the S&P 500 Index posting fifty-two consecutive trading days without a daily decline of more than 1%.  While quietly moving upward, the index hit an all-time high on August 15th at 2,190.15, a 220% increase in value since the financial crisis low on March 9, 2009.  Near the end of the quarter investors were fixated on the Federal Reserve and its vacillation between leaving interest rates unchanged and raising them.  There has been only one interest rate hike since June of 2006, and the September 2016...
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Celebrating 25 Years of Service to Our Clients

At the tail end of what had been a relatively quiet quarter, global stock markets suffered a sharp two-day sell-off following the surprise vote on June 23rd by the United Kingdom to exit the European Union.  Despite the dire predictions made immediately after the vote, the decline was short-lived.  The major global indices rebounded to pre-Brexit levels or higher by the end of the quarter.  In fact, the second quarter ended on a positive note for most asset classes. Asset class returns for the quarter and year-to-date were as follows:   Index   Asset Class Second Quarter 2016 Year-To-...
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Stock Market Volatility: Finding Opportunity Amidst the Noise

Following a strong finish to 2015, financial markets took investors on a harrowing ride during the first quarter of 2016.  After losing 11% of its value in the first six weeks of the year (through February 11th), the S&P 500 Index reversed course and finished the quarter in positive territory.  This volatility, which began affecting markets in the second half of 2015, can be attributed to numerous economic and geopolitical developments across both domestic and foreign markets.  China's currency devaluation, falling oil prices, and uncertainty over the Federal Reserve's plan to hike...
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The Fed’s Interest Rate Increase: Impact and Implications

While news surrounding geopolitical and financial issues is by no means in short supply, the most significant financial headline of the fourth quarter was the U.S. Federal Reserve (the Fed) increasing the target federal funds rate for the first time in nearly a decade.  More specifically, the Fed’s policy-setting committee raised its benchmark interest rate, the interest rate at which a bank lends overnight funds maintained at the central bank to another depository institution, by a quarter of a percentage point from essentially zero.  Since the Fed adjusts interest rates to moderate the...
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Human Behavior and Investing: How Our Wiring Could Sabotage Us

Equity markets logged their worst quarterly performance in four years for the period ending September 30, 2015.  A laundry list of concerning developments caused investors worldwide to take shelter, selling risky assets now and asking questions later.  Primary concerns included the seemingly endless uncertainty about the Federal Reserve’s plan for interest rate increases, the slowing Chinese economy and the extreme volatility of its stock market, and intensifying emerging market turmoil related to plunging commodity prices and weakening currencies.  The combination of these issues led to a...
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Creating a Withdrawal Strategy for Your Retirement Portfolio: Understand Your Unique Situation

Another quarter has passed with the Federal Reserve maintaining its Zero Interest Rate Policy (ZIRP) with regard to short-term interest rates.  Despite public statements suggesting that the Fed is anxious to begin normalizing its monetary policy, it has once again postponed the first rate hike due to somewhat disappointing recent economic data.  Most Fed watchers believe the first move by the Fed—probably a quarter-point raise—will occur in September or December.  While the anticipation surrounding the amount and timing of the first interest rate increase will undoubtedly generate much debate...
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Disciplined Diversification: A Key Investment Tool to Address Uncertainty

As the first quarter of 2015 closes, we are reminded that the world is inherently uncertain, markets are increasingly global, and the requirement for disciplined investing remains critical to long-term success. Following a mixed performance in 2014, stocks worldwide rose in the first three months of the year. The key global headlines for the quarter included a steadily improving U.S. economy, continued strength of the U.S. dollar, low oil prices, questions about China’s growth trajectory, continued Russian aggression, a potential nuclear pact with Iran, uncertainty about Greece’s role in the...
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The Top Five Investment Surprises of 2014

Happy New Year! We hope you, your family, and friends made the holiday season one to remember and that you are feeling relaxed and recharged as we begin 2015. All in all, 2014 was a rewarding year for investors, particularly those with a healthy allocation to U.S. equities. Here are asset class returns for the fourth quarter and full year: Index Asset Class Fourth Quarter 2014 Full Year 2014 Barclays Capital U.S. Int. Government / Credit Index Fixed Income 0.9% 3.1% S&P 500 Large U.S. Stock 4.9% 13.7% Russell 2000 Small U.S. Stock 9.7% 4.9% MSCI ACWI ex-USA Foreign Stock -3.9% -3.9% S...
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Investing for the Long Term: How Long is Long Term?

After a strong start to the year, global equities retreated in the third quarter among continued geopolitical concerns and mixed economic news. The rise of ISIS/ISIL in Iraq and Syria, escalating conflict between Hamas and Israel, continued tension between Russia and Ukraine, roiling protests in Hong Kong, and concerns about the sustainability of a relatively unimpeded move up in global equity markets following the global financial crisis drove many investors to the relative safety of bonds and large U.S. stocks during the quarter. Despite many negative global data points, news from the U.S....
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Resisting the Siren Song of Stock Market Timing

We hope your summer is off to a great start and that you enjoyed a long, relaxing Fourth of July weekend with family and friends. Stocks continued grinding higher in the second quarter, with U.S. indices hitting new highs at the end of June. Stock market volatility remains very low. One big surprise of 2014 has been the decline in interest rates (bond prices rising), despite the Federal Reserve cutting its purchases of U.S. Treasury bonds. The benchmark 10-year Treasury bond yield began the year at 3.0%; many forecasters had predicted that it would be in the 3.5% to 4.0% range by now. Instead...
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