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Stock Investing at All-Time Highs – Second Quarter 2017

As stock markets, once again, continue to hit all-time highs, investors take this news not with celebration, but with trepidation. Modern stock markets have been worrying investors with new highs since they were created several centuries ago. For example, in 1955, Benjamin Graham, the great…

The Uncertainty Paradox – First Quarter 2017

Doubt is not a pleasant condition, but certainty is an absurd one. —Voltaire “The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot…

The Power of Markets – Fourth Quarter 2016

In 1958, economist Leonard Read published an essay entitled “I, Pencil: My Family Tree as Told to Leonard E. Read.” The essay, narrated from the point of view of a pencil, describes the “complex combination of miracles” necessary to create and bring to market the commonplace writing tool that has been used for generations…

Presidential Elections and the Stock Market – Third Quarter 2016

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…

10 Reasons to be Cheerful – Second Quarter 2016

Do you ever listen to the news and find yourself thinking that the world has gone to the dogs? The roll call of depressing headlines seems endless. But look beyond what the media calls news, and there are also a lot of things going right. It’s true the world faces challenges in many areas…

Climbing a Wall of Worry – First Quarter 2016

Climbing a Wall of Worry First Quarter 2016 proved to be a volatile one for investors. Before suddenly rallying in mid-February, stocks got off to their worst start ever to begin the New Year. From peak to trough (high to low), large U.S. stocks, as measured by the S&P 500 index, fell more than 10%…

Markets Have Rewarded Discipline – Fourth Quarter 2015

Markets Have Rewarded Discipline A disciplined investor looks beyond the concerns of today to the long-term growth potential of markets. The chart below shows how $1 invested in 1926 in various asset classes has grown through 2014. The top line shows that $1 invested in small cap U.S. stocks in 1926 would have grown to…

”It’s always something. And then it’s nothing.” – Third Quarter 2015

Stocks saw their first true panic selling in Third Quarter 2015 since the U.S. default crisis of 2011. In a particularly volatile week in mid-August, the Dow fell nearly 2,000 points in just five trading sessions. The VIX index, which measures the level of fear in the stock market, spiked into the mid-50 range, a level last seen during the 2008-09 financial crisis…

The All-Weather, All-Road Portfolio – Second Quarter 2015

Owners of all-purpose motor vehicles often appreciate their cars most when they leave smooth city freeways for rough gravel country roads. In investment, highly diversified portfolios can provide similar reassurance. In blue skies and open highways, flimsy city sedans might cruise along just as well as sturdier sports utility vehicles…

MasterChef of Investing – First Quarter 2015

In the popular TV program MasterChef, contestants face a series of cooking challenges. From low quality ingredients to inadequate preparation to poor implementation, so many things can, and do, go wrong. It’s a bit like investing. In the world of investment, there customarily are two broad approaches…