Let’s define it. A bear market is a drop in the market of at least twenty percent from its highs, lasting at least two months. Think 2008. In fact, there have been 32 bear markets since 1900, or one every 3.5 years, on average1. So, when’s the next one? Definitely, without a doubt, sometime in the future. We guarantee it. Of course, we are being facetious. If you are reading this, you are either a client, or an acquaintance who has read a few of our posts. Either way, you know that bear markets, bull markets, and everything in …
Things That Make You Go “Hmmm”
Let’s take a comparative look at the world’s market cap (i.e. the value of all the stocks), by country. The total value at the end of last year was about $47 trillion. Is China really only 3% of that? Not quite. That’s just the value accessible to non-Chinese investors. Russia, the largest country by area, barely makes it on the map (hint: it’s grey). In fact, Russia’s total value is less than Apple’s. Try to guess what the non-labeled countries are. We hope this made you go “hmmm”. Cheers, John & Bill
Picking Funds Based on Returns? Think Again
Many, if not most, people pick their investments based on recent returns. And that’s a huge mistake. Consider this data: On March 31st, 2012, there were 2346 domestic mutual funds. One year later, 1173 funds (half) had placed in the bottom 50% of performance, leaving the other 1173 as “winners”. If past performance is indeed indicative of future results, we would expect those 1173 “winners” to continue winning. They don’t – not by a long shot. By March of this year, only 43, or 3.7%, continued winning. For those 43 funds, while a five year streak of staying in the …
You Want The Truth? Here It Is
We’ll just say it. Most financial advisors – or brokers, or agents, or wealth managers, or whatever they call themselves – are either crooks, incompetent, or both. After over thirty combined years of doing this, we’ve seen it all, from advisors who don’t understand basic investment theory, to outright fraud. Luckily, there are very few Bernie Madoffs. The majority of offenses are subtle, usually go unnoticed by the client, and are detrimental over the long term – when it becomes too late to fix it. And the subtlety extends to both incompetence and crookedness. If we all gathered around the …