Q3 2017 Quarterly Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

“Socrates used to call the opinions of the many by the name of Lamiae, bugbears to frighten children.” Marcus Aurelius: Meditations – Book XI: passage 23 

“The universe is transformation: life is opinion.” IBID – Book IV: passage 3 

This quarter was essentially a continuation of trends established during the first half of 2017; persisting growth in equities, with no appreciable summer pullback. Once again, the emerging world saw the greatest gains and since the U.S. Dollar declined in relation to international currencies, the stock gains for U.S. (dollar-based) investors outpaced those experienced by local investors. Notably, bond yields edged down (again), as bond prices rose. Oil rose on supply and demand developments from OPEC and gold climbed – perhaps due to the ratcheting up of tensions between the U.S. and North Korea. All in all, it was a relatively quiet summer with generally positive results. Read more >

Q2 2017 Quarterly Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

The Mountain is high, the valley is low and you’re confused on which way to go
So I’ve come here to give you a hand and lead you into the Promised Land, so
Come on and take a free ride (free ride)
Free Ride, The Edgar Winter Group, August 1973 

For what seems to be forever, the financial markets have been vexed by historically high valuations of stocks and maddeningly low yields of bonds. As an example, the July 14th, 2016 Wall Street Journal headline proclaimed “A World Turned Upside Down.” That year ago phenomenon is still the status quo for investors. As of the end of this June, benchmark global stock market indices had posted another solid quarterly performance, with many finishing just a notch below all-time highs, and US bond yields had fallen – again. As the chart below also highlights, crude oil saw further declines and gold paused its recent run-up. Read more >

Q1 2017 Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

“A man who tells lies, like me, merely hides the truth. But a man who tells half-lies, has forgotten where he’s put it.” Mr. Dryden – played by Claude Raines – in Lawrence of Arabia (1962)

In large part, the first few months of this year have been a continuance of the post-election rally last year. Global stock markets have generally been positive performers, as seen in the exhibit below. The bulk of these returns, however, occurred in January and February (+5.9% for the S&P 500 and +5.7% for the MSCI All Country World Index), with relatively little progress in March. The momentum that had built up in most U.S. stock indices, and many abroad, fizzled as March unfolded… Read more >

Q4 2016 Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

“In order to make progress, one must leave the door to the unknown ajar.”
Richard Feynman 

As we reflect on the conclusion of 2016 and contemplate 2017, much seems to be poking its nose through the “unknown” doorway – to follow the thoughts of Richard Feynman, the theoretical physicist who was awarded the Nobel Prize in physics in 1965. First among several important events last quarter was, of course, the US Presidential election. Regardless of one’s politics, we believe it is appropriate to state the obvious; the election’s result was not widely expected. After the surprise result of the “Brexit” referendum in Britain last spring, US political pundits were, seemingly, extra vigilant to the shifting attitudes of the electorate – especially in the essential electoral college “swing” states. Nevertheless, this turn of events was a shocker… Read more >

Q3 2016 Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

But what a fool believes he sees,
no wise man has the power to reason away
what seems to be is always better than nothing
there’s nothing at all, but what a fool believes he sees
The Doobie Brothers, 1978 

Global financial markets continue to be captivated by the daily debate about when and by how much the Federal Reserve will raise short-term interest rates. Opinions vary, and some of the debate has taken the form of pundits claiming to be the wiser and suggesting their counterparts are fools. Perhaps predictably, the topic has even become an issue for rhetoric by our presidential candidates. Right now, the Fed’s Open Market Committee guideline for the federal funds rate is basically nothing… Read more >

Q2 2016 Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

“Ulysses, glorious Greek, arriving here! O stay thy ship, that thou mayst hear our voice! For none hath ever sail’d past this our isle, ere the sweet voice form forth our mouths he heard…and all things on the fertile earth we know.” So spake their charming voice, and then my heart desired to hear.
The Odyssey of Homer, George William Edginton 

What Brexit? The timing of the vote by the Brits to leave the European Union (June 23rd), the result (leave!), the immediate financial market reaction (sell!), and the bountiful political, social, and economic commentary that continues unabated made it the dominating event in the minds of many investors during the second quarter. In the two trading days following the verdict, the S&P 500 fell -5.3%, the MSCI All Country World was cut by -6.9%, and the MSCI EAFE dropped -9.8%. Bond yields slumped (prices rose), and gold prices firmed. Read more >

Q1 2016 Investment Review

David W. Lemons, CFA
Senior Managing Director, Portfolio Manager

“In matters of principle, stand like a rock; in matters of taste, swim with the current.” – Thomas Jefferson 

Right out of the gate, the first quarter of 2016 was dreadful for stock investors and there didn’t seem to be a direct, easy connection between real time data and the markets’ movement lower. The backdrop to the end of 2015 included concerns about the Federal Reserve’s decision in December to increase short-term interest rates, Chinese economic growth, the potential for a US recession, and continued weakness in oil prices. The markets carried this sack of issues forward into January… Read more >

Dusting Off Your New Year’s Money Resolutions

East Coast Asset Management’s John Slupski was quoted in this excellent story about how to stay on track to meet your goals.

U.S. News & World Report
By Geoff Williams

It’s not too late to improve your financial picture in 2015.

“2015 is my year to… SAVE MONEY”
You probably said this at the beginning of the year. Have you been sticking to it?

Remember all those financial goals you set for yourself right around New Year’s Day? How’s that going?

This would be the year, you said, that you would get serious about saving for retirement and fattening up your emergency fund. You vowed to write a will, buy more life insurance or save for a house.

If you didn’t stick to your resolutions, you’re not alone. Continue reading