IntegrityIA http://www.integrityia.com Invest with Integrity Wed, 09 Aug 2017 20:40:23 +0000 en-US hourly 1 10 Steps to Become a Better Investor http://www.integrityia.com/10-steps-become-better-investor/ Wed, 09 Aug 2017 20:40:23 +0000 http://www.integrityia.com/?p=2042 Here are 10 steps to become a better investor.  Most people need a coach to help them understand market history, risk, portfolio construction, help them save enough money to support their lifestyle in retirement and help to avoid bad behavior in times of crisis / panic. If you need help and have a portfolio over […]

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Here are 10 steps to become a better investor.  Most people need a coach to help them understand market history, risk, portfolio construction, help them save enough money to support their lifestyle in retirement and help to avoid bad behavior in times of crisis / panic.

If you need help and have a portfolio over $750k, give us a call or email.

 

Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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Q2 Mix tape http://www.integrityia.com/q2-mix-tape/ Thu, 13 Jul 2017 01:35:35 +0000 http://www.integrityia.com/?p=1933 Here is our market update for Q2 2017. The bull market has continued and shows little signs of slowing. The media remains fixated on the White House, but the market is more attuned to corporate results and central bank activity. The Q2 earnings growth estimate for the S&P 500 is a robust 6.6%, according to […]

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Here is our market update for Q2 2017.
  • The bull market has continued and shows little signs of slowing.
  • The media remains fixated on the White House, but the market is more attuned to corporate results and central bank activity. The Q2 earnings growth estimate for the S&P 500 is a robust 6.6%, according to FactSet.
  • The Fed stayed on course: It raised short-term interest rates 0.25% late in June and reiterated an expectation of one to two more hikes over the remainder of the year. Bonds still managed modest gains in this environment.   It also announced plans to begin slowly shrinking its bloated balance sheet by letting an increasing amount of bonds mature without replacing them. Overall, this creates a mild headwind for stocks.
  • Global expansion is on firm ground and the odds are low for a recession in the next 12 months.
  • For the second quarter, international stocks did better than US stocks.  We will see if this trend continues.
  • In the last year, we have had 42 new highs on the S&P500 and we have not had a 5 % correction in 262 trading days (as of 7/12/17).  We believe that the markets are due for more volatility and this would be perfectly normal.
  • Here are some key slides and more in the PDF below.  Be sure to look at the keys to success (page 2), p. 8 why institutional investors underperform, page 19-22 – the state of the current bull market and p. 23 the timeline for FED balance sheet reductions.
  •   Click HERE to download the PDF
  • Enjoy the rest of summer!

This has been one of the least volatile years for the stock market. 

Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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Q1 2017 Market Review http://www.integrityia.com/q1-2017-market-review/ Fri, 21 Apr 2017 00:14:12 +0000 http://www.integrityia.com/?p=1914 Here is our market update for Q1 2017. The bull market entered its ninth year during Q1 and showed no signs of slowing. Initial policy stumbles by the new administration may have actually contributed to gains as it became evident that the new president will face considerable checks and balances from both Republicans and Democrats. […]

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Here is our market update for Q1 2017.
  • The bull market entered its ninth year during Q1 and showed no signs of slowing. Initial policy stumbles by the new administration may have actually contributed to gains as it became evident that the new president will face considerable checks and balances from both Republicans and Democrats.
  • Media and investor focus remains fixated on President Trump and the political landscape. In our view, however, the private sector and the broader global economy is likely to be the bigger driver for stocks in the coming years. Despite the doom-and-gloom tone of the election and pocket of geographic weakness, the overall economy is robust and stocks reflect it.
  • The Fed stayed on course: It raised short-term interest rates 0.25% late in Q1 and reiterated an expectation of two more hikes over the remainder of the year. Bonds still managed modest gains in this environment.
  • The Department of Labor’s fiduciary rule, originally set to go into effect on April 10, suffered a series of setbacks in the quarter. As of this writing, a 60-day delay has been implemented, but the final fate of the rule remains uncertain.  We have always been a fiduciary for our clients and if you use an advisor, we strongly recommend that they are a fiduciary for you 100% of the time.  See this blog.
  • The biggest lesson of President Trump’s first 70 days is an old one – political leaders have great impact on people’s lives, but when it comes to stock prices, they are usually just one factor among many. So far the market appears to remain focused on the potential positive impacts President Trump may have on taxes and corporate profits.
  • The populist trend represents a threat to the EU, and is likely one reason U.S. stocks have outperformed over the past few years. It is a risk, but also an opportunity.
  • For the first quarter, international stocks did better than US stocks.  We will see if this trend continues.

See this recent blog —

Are you ready for a fire drill?  are you managing risk in your portfolio?

Click here to look at all the slides.  — QMR_Q1 2017 and market outlook-final

Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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Are you ready for a fire drill? http://www.integrityia.com/ready-fire-drill/ Sun, 16 Apr 2017 20:31:32 +0000 http://www.integrityia.com/?p=1889 3/9/17 is the 8-year anniversary of the low of the great recession.  In 2009, the SP500 closed that day at 667.  Friday 4/14/17, it closed at 2,329.  Up about 250% from the lows (300%+ including dividends).  Now, can you calculate your investable net worth around March of 2008 for your portfolio?  I encourage all clients […]

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3/9/17 is the 8-year anniversary of the low of the great recession.  In 2009, the SP500 closed that day at 667.  Friday 4/14/17, it closed at 2,329.  Up about 250% from the lows (300%+ including dividends).  Now, can you calculate your investable net worth around March of 2008 for your portfolio?  I encourage all clients to track their investable net worth on at least a yearly basis.  The point is…. markets have had quite a run.  Your portfolio should be up 2x to 3.5x+ since 2008 (depending on spending, contributions, asset allocation and if you are retired or working).  Starting valuations matter.  Today, both stocks and bonds are not cheap.  That doesn’t mean that they have to fall but it possibly means that future expected returns may be significantly lower that historical returns (see – blog A Perfect Storm May be Brewing).  Especially for bonds but also likely for stocks.  We must focus on our plan, your goals/objectives and overall risk.  Most investors will need to save more and work longer to maintain their lifestyle in retirement.

From A Wealth of Common Sense Blog 3/2/17

“Lately, it feels like every time I time I log into check my investment accounts the market values are higher than the previous time I looked. The stock market continues to hit all-time high after all-time high. I have to admit, it feels pretty good when things are going your way in the markets and it seems like everything you touch turns to gold.

This is easy. Everything I buy just keeps going up.

It would be nice to assume that my intelligence has risen along with my skills as an investor, but I have to admit that’s not really what’s going on here. We just happen to be in the midst of a strong bull market. So I have to remind myself. Seeing your investments rise is no way to validate your level of intelligence. In fact, it can be extremely dangerous to your wealth when the music stops playing.

Who needs an insurance policy (like bonds and alternatives) when all of my risky investments have been rising for years?

Researchers have found that the brain activity of a person who is making money on their investments is indistinguishable from a person who is high on cocaine or morphine. The brain of a cocaine addict who is expecting a fix and people who are expecting to make a profitable financial gamble are virtually the same. The danger in allowing a bull market to increase your confidence as an investor is that it can lead you to take unnecessary or avoidable mistakes to continue to get that high.

(in summary) Don’t confuse a bull market for increased brain power.  And above all, it’s important to stay humble. While not always easy, humility may be one of the most useful traits you can develop as an investor during a bull market to remind yourself that the good times won’t last forever and you’re not as intelligent as rising markets may make you feel.”

“The essence of portfolio management is the management of ‘risks,’ not the management of ‘returns’.   All good portfolio management begins and ends with this tenet!” — Benjamin Graham (asset allocation will determine returns)

“We can’t predict but we can prepare” – Howard Marks (how will we respond when stocks are down -20% to -35%?  What is our plan?)

“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” –  John Kenneth Galbraith (How much optimism is already factored into the price?  Starting valuations matter.  Today, both stocks and bonds are not cheap compared to history.  2nd level thinking – when is there too much optimism?  How do we control risk and minimize negative outcomes?)

Sir John Templeton said, ‘Bull markets are born on pessimism, mature on optimism, and die on euphoria.’

“The stock market is the only market where things go on sale and all the customers run out of the store!” – Cullen Roche

“If you think the market’s ‘too high’ wait ’til you see it 20 years from now.” – Nick Murray

“Having, and sticking to, a true long term perspective is the closest you can come to possessing an investing super power.” Cliff Asness AQR

“Owning stocks is a long-term undertaking that doesn’t just require patience. It also requires higher tolerance for pain and uncertainty than many investors may realize.” Jason Zweig WSJ

1. What do you own?
A diversified portfolio of asset classes that I will stick with over time (matches my risk tolerance).
2. Why do you own it?
Because holding such a portfolio is the only proven road to investment success (highest probability of meeting my goals).
3. How long do you plan on holding it for?
As long as my risk tolerance and goals don’t change.

If you have a portfolio above $750k and would like to discuss your own personal “fire drill”, please give us a call or email.

There have been many reasons to sell since 2009 but the market is up 250% +

It is impossible to time the end of one of the most hated bull markets in history.  Because this bull market has been a slower recovery, it may also last longer.  Who knows?  I think we should always be prepared for a -20% to -35% pullback in stocks (very normal – see chart below).  This is why we have a short-term bucket of bonds and alternatives.  These are very confusing and risky times.  How do we manage the short-term bucket of investments to mitigate risk (bonds/alternatives)?  How do we manage the money that is not needed for 7, 10, 20+ years (long-term global stocks with value, small cap, high profit, momentum)?

Here is an interesting piece from B of A.

  • You don’t want to miss the end of a bull market, says Savita Subramanian, Bank of America Merrill Lynch’s Quant-in-Chief. It’s where some of the most explosive upside moves take place. Parabolic, skyscraper-like charts can happen just before it’s all over.
  • Additionally, you need euphoria to show up – not in the form of sentiment surveys but in actual dollar volume. You need fund flows. Savita makes the case that, if history is guide, we haven’t seen the best part yet (even if it ends in tears, as usual).
  • Here’s a look at the performance of stocks heading into historic bull market peaks, 24, 12 and then 6 months prior. It’s painful to miss the end of these things

Data Source for the 2 above charts: Robert Shiller’s data library. Calculations by Newfound Research.  www.thinknewfound.com 

Data via Pension Partners blog

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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7 Steps to Get Your Financial House in Order in 2017! http://www.integrityia.com/steps-to-get-your-financial-house-in-order-in-2017/ Wed, 01 Feb 2017 04:45:35 +0000 http://www.integrityia.com/?p=1139 The best time to plant a tree was many years ago.  The next best time is today!  How is your retirement tree?  For most non-retired people, taking action about a retirement plan is overshadowed by the immediate demands of life; meanwhile, precious time and growth opportunity pass for your retirement tree.  A solid retirement will […]

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The best time to plant a tree was many years ago.  The next best time is today!  How is your retirement tree?  For most non-retired people, taking action about a retirement plan is overshadowed by the immediate demands of life; meanwhile, precious time and growth opportunity pass for your retirement tree.  A solid retirement will not happen by chance and there are no quick fixes.  It takes years of planning, preparation and discipline.    The good news is that you can get started today!

7 Steps to Get Your Financial House in Order in 2017!

1)  Control your spending and debt! Consider signing up for a free service like Mint.com or purchase some software like Quicken to track your spending. Most people are surprised how much they spend in “little categories” that add up to significant spending.  It is strongly advised to pay off your credit card each month and possibly reduce your mortgage with lower rates.

2)  If you don’t enjoy tracking your spending and creating a budget, here is an alternative. Pay yourself first, then spend the rest.  Studies suggest that most households need around 80% to 100% of their pre-retirement income to support their lifestyle in retirement.  Your target savings rate depends on several factors:

  • How much have you already saved for retirement from all sources (401k, savings, pension, Social Security)
  • Your current age & when you start saving
  • Your target retirement age
  • How long your project to live.
  • For most, a good target should be 15% to 25%+ of gross household income (before taxes) to maintain your current lifestyle in retirement.  If your household income is above $100k, we suggest your savings rate be above 20%.  This includes taxable accounts, 401k and company match.
  • Watch this video – Can You Maintain Your Lifestyle in Retirement?
  • Watch this video – The Most Important Decision of Your Financial Life

3)  Learn how to more optimally invest your money. Many retail investors lack the knowledge, time and discipline to effectively hit their goals for retirement.  If you are trying to compete with institutional money, market timing and high frequency trading, the odds are stacked against you.  Plus, many investors panic and engage in poor investing behavior in times of crisis.  As a starting point, benchmark your portfolio to a proper index of stocks and bonds.  The current bull market is up 290% from the market lows of 2009.  Did you get your fair share?  Many investors need a coach.  Warning!  Expected future returns for the next 7 to 10 years for both stocks and bonds are below historical averages.  See this blog – The Perfect Storm May be Brewing

4)  Understand how you pay for financial services. Many investors don’t realize that the cost of investing has dramatically declined over the last 10 years.  If expected future returns from a diversified portfolio are 7% per year and you pay 2% in fees, you pay 28% of your gains each year to Wall Street.  There are 3 primary ways to pay for investing services:

  • Commission-based Advisor – This type of advisor is typically a broker or financial advisor and they sell you products for commissions. These can be stocks or mutual funds with A shares or B shares or C shares.  The investments can also be some sort of insurance product or non-traded REIT.  The commissions can be from 1% to 5.75%+.  Some insurance products and non-traded REITs can be much higher.  This person is held to “suitability standard of care”; to do what is “suitable” for other similar investors.
  • Fee-based Advisor – This type of advisor sometimes works on commission and sometimes charges you a fee. This relationship is very confusing for investors.  This person is held to a “suitability standard of care”: to do what is “suitable” for other similar investors.
  • Fee-only Advisor – This type of advisor works on a fee-only basis 100% of the time. There are no hidden commissions or fees.  This person is held to a “fiduciary standard of care”.  By law, this advisor is obligated to put the client’s interests first at all times and disclose any conflicts of interest.

Many investors are not aware of how they pay for financial services.  This has serious implications and can drastically reduce your retirement nest egg.

5)  Get a free 2nd opinion from a fee-only Advisor – You work hard for your money and your family.  65% of retirees who did not prepare adequately for a comfortable retirement did not realize this until they had already retired.  We encourage you to take action and get a free 2nd opinion from a fee-only Advisor who is a fiduciary for you 100% of the time.  We offer free 2nd opinions for portfolios over $750k.  I encourage you to “trust but verify” you have a solid solution in place.  Why You Need a Fee Only Fiduciary Advisor! (video) 

6)  Improve your health in 2017! Your health is the foundation to your retirement.  In a recent 2011 Retirement Confidence Survey, 70% of current workers plan to work past age 65.  Actual experience of retirees shows that only 28% work past age 65.  The top reasons are:  65% are unable to keep working do to health or disability problems.  23% stop working due to company downsizing and 18% stop to care for another family member or spouse.  If you retire in 2020, the projections are that you may need at least $350k per couple to cover 90% of your projected medical expenses in retirement. Keep in mind that a nursing facility can be $80k+ per year.

7)  Take Action – even small steps can have a dramatic impact over time. I encourage you to take action in 2017.  Click here to subscribe to my blog  or email us. 

 

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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Q4 Market Review http://www.integrityia.com/q4-market-review/ Thu, 19 Jan 2017 16:55:45 +0000 http://www.integrityia.com/?p=1823 Happy New Year!  Here is our market update for Q4 2016. Markets continue to see increased volatility and we expect this to continue.  Maybe much more volatility with President Trump. It is important to have a plan and stick to it.  Stock volatility is normal even without a recession.  See page 7. It is important […]

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Happy New Year!  Here is our market update for Q4 2016.
  • Markets continue to see increased volatility and we expect this to continue.  Maybe much more volatility with President Trump.
  • It is important to have a plan and stick to it.  Stock volatility is normal even without a recession.  See page 7.
  • It is important to continue to focus on your household savings rate.  Target to save 20%+ of gross household income each year from all sources (including company 401k match).
  • We believe that it is important to focus on what you can control in life and investing.  For investing, this is building low-cost globally diversified portfolios that target the higher expected returns of value companies, small cap companies, companies with positive momentum and companies with high profitability.  These factors don’t work all of the time but over 7 to 10 year rolling periods, they tend to add incremental returns.
  • There is never a good time for a less than optimal portfolio.  If you need help, give us a call or email.
  • Check out these 2 important blogs.
  • Click the link below to download our slides for Q4 2016 (32 pages of important slides)

QMR_Q4_2016 and market outlook-final


Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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Why You Shouldn’t Care about Dow 20,000 http://www.integrityia.com/shouldnt-care-dow-20000/ Tue, 20 Dec 2016 16:59:49 +0000 http://www.integrityia.com/?p=1790 The financial media loves to sell fear and greed.  Dow 20,000 is irrelevant to your personal financial goals (even the Dow is irrelevant as a benchmark – it is only 30 stocks).  They won’t tell you this because they want you to watch the nonsense.  I encourage you to just say NO! “If you don’t […]

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The financial media loves to sell fear and greed.  Dow 20,000 is irrelevant to your personal financial goals (even the Dow is irrelevant as a benchmark – it is only 30 stocks).  They won’t tell you this because they want you to watch the nonsense.  I encourage you to just say NO!

“If you don’t know where you’re going (don’t have a plan), you’ll end up someplace else.” Yogi Berra

In most cases, by not having a plan, the someplace else is not a place you want to be.  Someplace else typically means working longer (70 or beyond), retiring with less lifestyle in retirement than you desire, running out of money or being completely dependent on others for your basic needs.  Most retirees want none of these options!

Here are some things you can focus on while you are enjoying the Holidays:

  1. What you save (and invest) each year is more important than what you earn.  Calculate your household profit margin.
  2. Most investors need to save 20%+ of gross income each year.  This includes 401k match.  (if you can save 25% or 35%, even better)
  3. If you hire an Advisor, they must be a Fiduciary for you 100% of the time.  Fee-only and low cost.  Not a broker or insurance Rep.
  4. Say No to “active management”.  Use indexing or factor investing to enhance returns.
  5. Let compounding work for you over decades.  Buy more stocks when they go on sale.  Minimize taxes where possible.
  6. Track your net worth and yearly profit margin over time to see progress.

“If you think the Market is ‘too high’, wait until you see it 20 years from now” – Nick Murray

Here are some interesting slides regarding long-term investment strategy


If you want more details regarding the potential of a Trump Presidency, check out this article from the massive hedge fund run by Ray Dalio,

Reflections on the Trump Presidency, One Month after the Election – Ray Dalio

Via @Bespoke

Via @CiovaccoCapital – SP500 has been consolidating for 15.8 years.

Since 2009, most of the money has flowed into bonds.

The real return of bonds (net of inflation) will be muted over the next 10+ years.  However, it is still VERY important to manage risk. Via @LeutholdGroup

The so called “experts” have been very wrong about the SP500 over the last 7+ years.

Stocks and bonds are NOT CHEAP!  Thus, future expected returns may be lower than historical averages.  I have written extensively on this topic in – The Perfect Storm May Be Brewing.  However, as Vanguard and Barry Ritholtz have pointed out, the CAPE ration has been elevated for many years.  Since 1990, the CAPE ratio has been above average 95% of the time (307 months out of 324 months) and it has gained 1,000% over that period.  The CAPE ratio is not a tool for timing the market.  If you are worried about it, Save More Money!  Charts via Vanguard.

Lastly, here are some very good slides form Vanguard.  It is important to think about any predictions as probabilities of an outcome.  If you are worried about retirement and your portfolio, save more, reduce costs, manage downside risk and we believe that factor investing (value companies, small cap companies, companies with high profit and companies with momentum) can enhance returns over long periods of time (not every year).  This enhanced compounding can have a significant positive impact over 20, 30 or 40 years.  Here are a couple examples:

  • 2016 YTD return as of 12/19 – SP500 (VFIAX) = +13.05%, DFA Large cap value (DFLVX) =+19.81%, DFA small cap value (DFSVX) = +29.91%
  • Since 1/1/2000 to 11/30/2016 (almost 17 years!)
    • SP500 index annualized return = 4.41% per year (growth of wealth 2.08x)
    • Barclays US Aggregate bond index = 5.23% per year (growth of wealth 2.37x)
    • DFA Large cap value (DFLVX) = 8.17% per year (growth of wealth 3.78x)
    • DFA Small cap value (DFSVX) = 11.11% per year (growth of wealth 5.94x)

Warning:  If you are a pure index investor (you only own the broad indexes like SP500 and Agg Bond index), you may want to rethink your strategy.  Vanguard estimates that there is less than a 2% chance that the Agg. Bond index will return over 4% over the next 10 years.  If you have over $750k in a portfolio and need a 2nd opinion, give us a call or email.

Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.  Enjoy the Holidays and Happy New Year!

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

 

 

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Q3 Market Review http://www.integrityia.com/q3-market-review/ Tue, 18 Oct 2016 23:40:35 +0000 http://www.integrityia.com/?p=1775 Here is our market update for Q3 2016. Markets continue to see increased volatility and we expect this to continue. It is important to have a plan and stick to it.  Stock volatility is normal. It is important to continue to focus on your household savings rate.  Target to save 20%+ of gross household income […]

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Here is our market update for Q3 2016.
  • Markets continue to see increased volatility and we expect this to continue.
  • It is important to have a plan and stick to it.  Stock volatility is normal.
  • It is important to continue to focus on your household savings rate.  Target to save 20%+ of gross household income each year from all sources (including company 401k match).
  • We believe that it is important to focus on what you can control in life and investing.  For investing, this is building low-cost globally diversified portfolios that target the higher expected returns of value companies, small cap companies, companies with positive momentum and companies with high profitability.  These factors don’t work all of the time but over 7 to 10 year rolling periods, they tend to add incremental returns.
  • There is never a good time for a less than optimal portfolio.  If you need help, give us a call or email.
  • Click below to download our slides for Q3 2016

Q3 2016 Market Review & Outlook

sp500-ytd-q3-2016

mstar-growth-and-recessions

Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

 

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Investors Hate Uncertainty! http://www.integrityia.com/investors-hate-uncertainty/ Mon, 10 Oct 2016 23:06:56 +0000 http://www.integrityia.com/?p=1758 Investors hate uncertainty but that is why you get paid to invest for the long term. The return from equities is actually called the equity risk premium.  Over long periods of time, equities should return more than the risk free rate. What is your Plan? Are you saving 20%+ of your gross income? Is your […]

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Investors hate uncertainty but that is why you get paid to invest for the long term.

The return from equities is actually called the equity risk premium.  Over long periods of time, equities should return more than the risk free rate.

What is your Plan?

  • Are you saving 20%+ of your gross income?
  • Is your spending under control?
  • Are you prepared for more volatility and the next recession?
  • Can you maintain your lifestyle in retirement?
  • Do you have enough money to live to 95 or 100?

Next month, Americans will head to the polls to elect the next president of the United States.

While the outcome is unknown, one thing is for certain: There will be a steady stream of opinions from pundits and prognosticators about how the election will impact the stock market. As we explain below, investors would be well‑served to avoid the temptation to make significant changes to a long‑term investment plan based upon these sorts of predictions.

SHORT-TERM TRADING AND PRESIDENTIAL ELECTION RESULTS

Trying to outguess the market is often a losing game. Current market prices offer an up-to-the-minute snapshot of the aggregate expectations of market participants. This includes expectations about the outcome and impact of elections. While unanticipated future events—surprises relative to those expectations—may trigger price changes in the future, the nature of these surprises cannot be known by investors today. As a result, it is difficult, if not impossible, to systematically benefit from trying to identify mispriced securities. This suggests it is unlikely that investors can gain an edge by attempting to predict what will happen to the stock market after a presidential election.

LONG-TERM INVESTING: BULLS & BEARS ≠ DONKEYS & ELEPHANTS

Predictions about presidential elections and the stock market often focus on which party or candidate will be “better for the market” over the long run. Exhibit 1 shows the growth of one dollar invested in the S&P 500 Index over nine decades and 15 presidencies (from Coolidge to Obama). This data does not suggest an obvious pattern of long-term stock market performance based upon which party holds the Oval Office. The key takeaway here is that over the long run, the market has provided substantial returns regardless of who controlled the executive branch.

Exhibit 1:  Growth of a Dollar Invested in the S&P 500, January 1926–June 2016

growth-for-each-president

Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. The S&P data is provided by Standard & Poor’s Index Services Group.

Starting valuations matter.  The current CAPE ratio is 27.1.  This is higher than 90% of history and suggests that returns may be lower for both stocks and bonds in the future.  See chart below from Pension Partners blog on 8/4/16.  3 out of the top 4 CAPE ratios had negative returns.

cape-by-president

Keep your focus on the long term.  Any money you need in the next 5 years should not be in stocks.  Stocks can be highly volatile in the short term but tend to appreciate over long periods of time.  The odds are high that 7 to 10 years from now that stocks will be higher.  Make sure you manage the risk in your portfolio.  If stocks drop 20% or 30%, will you be prepared to buy more?

sp500-rolling-periods-jpg

CONCLUSION

Equity markets can help investors grow their assets, but investing is a long-term endeavor. Trying to make investment decisions based upon the outcome of presidential elections is unlikely to result in reliable excess returns for investors. At best, any positive outcome based on such a strategy will likely be the result of random luck. At worst, it can lead to costly mistakes. Accordingly, there is a strong case for investors to rely on patience and portfolio structure, rather than trying to outguess the market, in order to pursue investment returns.

If you need help, give us a call.

Post Via Dimensional Fund Advisors LP

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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Q2 Market Review http://www.integrityia.com/q2-market-review/ Tue, 19 Jul 2016 23:31:21 +0000 http://www.integrityia.com/?p=1732 Here is our market update for Q2 2016.  Enjoy the rest of summer. Markets continue to see increased volatility and we expect this to continue. It is important to have a plan and stick to it.  Stock volatility is normal. It is important to continue to focus on your household savings rate.  Target to save […]

The post Q2 Market Review appeared first on IntegrityIA.

]]>
Here is our market update for Q2 2016.  Enjoy the rest of summer.

  • Markets continue to see increased volatility and we expect this to continue.
  • It is important to have a plan and stick to it.  Stock volatility is normal.
  • It is important to continue to focus on your household savings rate.  Target to save 20%+ of gross household income each year from all sources (including company 401k match).
  • We believe that it is important to focus on what you can control in life and investing.  For investing, this is building low-cost globally diversified portfolios that target the higher expected returns of value companies, small cap companies, companies with positive momentum and companies with high profitability.  These factors don’t work all of the time but over 7 to 10 year rolling periods, they tend to add incremental returns.
  • There is never a good time for a less than optimal portfolio.  If you need help, give us a call or email.
  • Click below to download our slides for Q2 2016

QMR_Q2_2016 and market outlook

Click here to subscribe to my blog or email us  for a free 2nd Opinion about your portfolio.

Thanks for reading.

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC and Integrity Investment Advisors, LLC is not providing services in jurisdictions that the firm is not registered or acting under an exemption to registration. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

The post Q2 Market Review appeared first on IntegrityIA.

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