Are You Prepared For The Next Correction?

If you enjoy a good read, we’d recommend Warren Buffett’s annual Berkshire Hathaway shareholder letters. While financial reports are rarely much fun, Buffett’s way with words never ceases to impress. His most recent 2016 letter was no exception, including this powerful insight about market downturns:

“During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy.”

This actually is a good time to talk about scary markets, since we haven’t experienced a severe one in a while.

 

 

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Should We Track an “Index”, or Follow the Evidence?

Legend has it, a pharmacist named John Pemberton was searching for a headache cure when he tried blending Coca leaves with Cola nuts. Who knew his recipe was destined to become such a success, even if Coca-Cola® never did become the medicine Pemberton had in mind?

In similar vein, when Charles Dow launched the Dow Jones Industrial Average (the Dow), his aim was to better assess stock prices and market trends, hoping to determine when the market’s tides had turned by measuring the equivalent of its incoming and outgoing “waves.” He chose industrials (mostly railroads) because, as he proposed in 1882, “The industrial market is destined to be the great speculative market of the United States.”

 

 

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What Are Three Things That Retirement Software Can’t Account For?

You’re getting ready to finally “retire”.  We’ve run the numbers with you, looked at various calculations and determined when to begin Social Security.  We looked at how your taxes will change, where that money will come from, and even how they will be paid.  We’ve reviewed your allocation and strategy for portfolio income and how that fits into the plan.  We told you that you are financially independent, that you won’t need to worry and you can enjoy this next chapter of life with full abandon.

 

 

But you’re still uneasy.

There is still something on your mind that’s worrying you.  You’re comfortable with the financial aspects of this change, but you just aren’t sure how your life is going to look on the other side of this decision.  > SEE MORE

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Markets: What’s Really Behind It All?

As we look back on a year filled with surprises (from its opening days onward), it’s natural to wonder what to expect in 2017. This is especially so, since most of those surprising events have yet to play out in full – from the political climate in the U.S., to the Brexit referendum in the U.K. to uncertainty in government bond and oil prices around the world.

We are reminded of a favorite quote from The Wall Street Journal personal financial columnist Jason Zweig, who once observed that “Wall Street often resembles a blindfolded person looking in a darkened closet for a pair of black shoes that isn’t there.”

Interestingly, Zweig made his comment back in October 2008, when we had yet to see the light at the end of a very dark financial tunnel. We think the sentiment fits nearly any global market and any market climate, including whatever 2017 has in store for us.

 

 

Instead of getting too hung up on the forecasts from pundits or prognosticators, let’s take a moment to pause and celebrate the truly remarkable life force that has long driven our financial markets: human enterprise.

 

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