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Quarterly Market Review, 4th Quarter 2011
Posted: 1/9/2012
This report features world capital market performance in the last quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.
The report illustrates the performance of globally diversified portfolios, such as yours, for; the quarter, 1-year, 3-year, 5-year, and 10-year periods. Also featured as the topic for the quarter is an article titled "The Good Old Days."
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December 2011 Newsletter
Posted: 12/1/2011
Would you be surprised to learn that 80% of global output and over half the world's equity market value comes from countries outside the U.S.?
Having exposure to international markets can reduce your overall portfolio risk, while enhancing portfolio returns over time.
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The Challenge of Picking a Winning Mutual Fund Manager
Posted: 11/22/2011
Attached is an article on the retirement of Bill Miller, once one of the mutual fund industry?s biggest stars, who has recently fallen on hard times. Miller led the Baltimore-based Legg Mason Capital Management Value Trust fund to beating the Standard & Poor's 500 index for 15 consecutive years. The feat, performed by no other modern fund manager, earned him research firm Morningstar's manager of the decade title -- one of the highest honors in the industry.
The streak ended in 2006 and in the following five years investors proceeded to abandon the fund of their one-time darling. Fund assets which grew to $20 billion in 2007 shrank by 86% to the present $2.8 billion. Therein lies the paradox of skill. Many investors are searching for the Holy Grail of fund management. Their goal is to identify a skillful manager with certainty and participate in future returns. But confirming skill takes an investment lifetime, and you can never be fully confident that the outperformance is not random
But this paradox is not a case of "damned if you do and damned if you don't" for all investors. You can get off the manager selection merry-go-round and start making progress toward a successful investment experience by following these simple principles:
1. Diversify by asset class rather than by fund manager, broker, or advisor.
2. Buy into markets, not managers, and let capitalism be your guru.
3. Focus on what you can control?costs, asset allocation, risks, and discipline. Ignore what you cannot control?the media, prognosticators, market returns, and your gut.
4. Work with an advisor who understands these principles and can help you apply them.
The comments of Weston Wellington, Vice-President of Dimensional Fund Advisors, are gratefully acknowledged.
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Lessons from Mutual Fund Flows
Posted: 10/22/2011
The direction of net cash flows in a mutual fund may reveal the discipline?or lack of discipline?among its shareholders. Since 2008, heavy outflows from the US fund industry suggest that investors have let emotion rule their decisions. In contrast, positive inflows into Dimensional (DFA) funds, used by Madden for strategies in Model Portfolios, suggest that financial advisors qualified to use DFA's funds are helping clients stay the course in a difficult market.
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Quarterly Market Review: Q3 2011
Posted: 10/12/2011
This report features world capital market performance in the last quarter. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets. The report also illustrates the performance of globally diversified portfolios and features a topic of the quarter.
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October 2011 Newsletter
Posted: 10/1/2011
The Value Effect: A Premium from Owning What Others Don't Want.
Evidence from practicing investors and academics points to an undeniable conclusion: returns and risks are related. Gains are rarely accomplished without taking a chance, but not all risks carry a reliable reward.
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Robust Bull Market Turns 2: What Next?
Posted: 4/18/2011
In one of the sharpest bull market rebounds in history, the U.S. stock market has nearly doubled since the bear-market low on March 9, 2007. During this two-year period, stock prices have been supported by a backdrop of low inflation, a rebound in corporate profits, and favorable fiscal and monetary policies by the U.S. government.
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How to Test-Drive a Retirement Plan
Posted: 3/24/2011
Hardly a week goes by without a new study landing on my desk indicating that a large number of workers?as many as 60 percent according to one survey?are pushing back their retirement dates. I hate to say this, but that?s likely a good thing. The delays should give people additional time to take the final and most important step in planning for retirement: putting those plans through a test-drive.
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Retirement Savings for 40, 50, and 60-Year-Olds
Posted: 3/15/2011
Life is full of unexpected expenses, and it's not always easy to save as much as you want for retirement. As you move into your 40s, 50s, and beyond, you have to focus on retirement planning and save as much as you can so you can eventually retire and never run out of money.
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Previous Newsletters
Posted: 3/1/2011
See the current newsletter plus view newsletters from the previous months.
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Tapping the Nest Egg; The Safe Way
Posted: 2/24/2011
Whether you're a baby-boomer just months away from retirement or just starting your career, it is never too early to start thinking about how you will withdraw your retirement income from your nest egg. Knowing which accounts to set up at the start and which to raid first can stretch your savings.
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The Forces Behind Fixed Income: Opportunity & Risk
Posted: 2/17/2011
Fixed Income (Bonds) have told an interesting story over the past couple years. In this article, four Fidelity portfolio advisors give their take on the past, present, and future of the fixed income market.
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2010 Review: Economy & Markets
Posted: 1/25/2011
The past year offered an interesting mix of positive and negative news as investors around the world eagerly anticipated signs of economic recovery and financial stabilization. While most financial markets logged positive returns for a second year, investors had to endure a host of troubling news and pessimistic market predictions.
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Be It Resolved ? Financial Resolutions
Posted: 1/17/2011
While people often make New Year's resolutions to eat less, exercise more, and make other lifestyle changes for improved health, some investors might consider forming new financial habits to improve long-term wealth. Brad Steiman proposes ten investment resolutions for 2011.
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4 Costly Retirement Planning Mistakes
Posted: 12/21/2010
It's no secret that most Americans aren't saving enough for retirement?the latest figures cite a shortfall of $6.6 trillion. But with a strategy to avoid the most common retirement planning mistakes, aspiring retirees can close that gap.
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