Where We Are in the Cycle

April 2017  By: JOEL GOODMAN, CFA, SCOTT McGHIE, CFA, CPA, ALEX MORRIS, CFA, MBA

In the fourth-quarter newsletter, we discussed how we think about long-term equity return expectations. The purpose of the article was to explain how fundamental returns (driven by earnings growth) and speculative returns (driven by changes in valuation) collectively impact market prices. While changes in valuation are the overwhelming driver of equity returns in the short…

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Have we seen the beginning of the Great Rotation?

January 2017  By: MALCOLM BUTLER, JD

Over the past 35 years, interest rates on bonds have been in a gradual decline. The decline in interest rates has gone hand-in-hand with rising bond valuations since bond values move inversely to interest rates. Bond investors have thus enjoyed a long period of rising returns due to market appreciation in addition to the interest…

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Expectations for Future Equity Returns

January 2017  By: JOEL GOODMAN, CFA, SCOTT McGHIE, CFA, CPA, ALEX MORRIS, CFA, MBA

The S&P 500 reported its eighth consecutive year of positive returns in 2016, a feat last achieved in the 1990’s. That winning streak appeared in question in early November, with the S&P 500 up roughly 2% for the year. As the U.S. Presidential election approached, the consensus among market prognosticators was that a win for…

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The Reemergence of the Blue Chip Nifty Fifty

July 2016  By: MALCOLM BUTLER, JD

“A blue-chip stock is the stock of a large, well-established and financially sound company that has operated for many years. A blue-chip stock typically has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector, and is more often than not a household name. While…

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Navigating Macro Choppiness

July 2016  By: JOEL GOODMAN, CFA, SCOTT McGHIE, CFA, CPA

At the 2016 Berkshire Hathaway shareholder meeting, Warren Buffett and Charlie Munger were asked about the impact of negative interest rates when valuing a business. Warren’s answer touched on the peculiarity of the current environment and how it impacts decision-making at Berkshire Hathaway. Charlie, who’s known for his one-liners, said the following: “If you’re not…

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Long-Term Thinking

April 2016  By: JOEL GOODMAN, CFA, SCOTT McGHIE, CFA, CPA

The sideways market of 2015 became even more indecisive in the first quarter of 2016. The S&P 500 Index stumbled out of the gates, and was down more than 10% by early February. In the ensuing weeks, the Index made a strong turn higher, ending the first quarter up marginally. At quarter end, the Index…

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The Silver Lining

January 2016  By: MALCOLM BUTLER, JD

Two thousand and fifteen was a challenging year for investors. Outside of some very large companies with high growth rates (Amazon and Facebook, among a few others), the majority of stocks in the S&P 500 ended the year with negative returns. U.S. small cap stocks also suffered as did most international and emerging market stocks….

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Search For Yield Continues

July 2015  By: JOEL GOODMAN, CFA, SCOTT McGHIE, CFA, CPA

As with most investors, our goal is to maximize the total return that we receive from an investment (within a risk-adjusted framework). Total return is comprised of two components: 1)the income received (interest from fixed-income investments and dividends received on equity investments), and 2) the capital appreciation due to the change in the market value…

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Putting the Brakes on the Emotional Rollercoaster

January 2015  By: JULIA BUTLER, CFP®, JD, MBA, CFEI

Emotions can cause investors to do the wrong thing at the wrong time. We all know, rationally, we should buy low and sell high. Yet emotions can cause investors to do just the opposite. Market cycles—and the emotions that they incite—can feel like a roller coaster ride. When the stock market is rising, investors feel…

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Investing Cash in Bull Markets

October 2014  By: MALCOLM BUTLER, JD

A common question that I frequently hear from our clients at The Fiduciary Group is “how can we invest fresh cash in stocks and bonds when prices seem so high?” Stock indices have repeatedly set new records this year, and bond prices have moved higher as yields have hovered near historic lows. Investors have continued to put…

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