Our team regularly reads articles from industry peers and trusted resources to stay up to date on financial markets. We enjoy reading about topics related to economics, investments, current events, and financial planning.
In addition to circulating some of the best pieces internally, we thought our clients, partners, and friends might enjoy reading some of the same articles as us.
Here are nine recent pieces that our team members have read, along with some commentary on why we found the respective articles interesting.
This short article explains how investors can take advantage of a higher level of interest rates with almost no credit or interest rate risk. It’s an important reminder that there are benefits from higher interest rates – namely investors being able to earn potentially more return on their bond portfolio. To boot, treasury bill ladders are now a staple for many SWP client portfolios.
Business owners have taken plenty of risks to get the rewards they built by creating a profitable business. Business owners design 401k, Profit Sharing, and Cash Balance to help themselves and their employees to retire with a plan to replace the income they had while working.
Andrew Denenberg: S&P 500: 1926-2015 Chart
While not an article, I wanted to share this chart because it shows 1) the lack of importance of worrying about short time periods and 2) how the best hedge against risk is a long-time horizon.
|S&P 500: 1926-2015|
|Source: Returns 2.0|
Michael Garrison: Time Horizon is Everything For Investors
While this blog post is over a year old, I love how it focuses on the importance of time horizon in investing. The anecdote on Amazon (it being a terrible short-term investment in 1999 but being a great long-term investment), as well as the rolling year information (showing that the U.S. stock market has never had negative returns over a 20-year window dating back to 1926), really highlights the impact a long-term horizon can have.
Michael Karmin: Hike, Pause, Cut
I have been much more interested in the moves of the interest rate market over the past year than the direction of the stock market. There seem to be competing forces between the Fed, who continues to raise rates, and the market, which seems to be pushing down rates. I don’t know where we go from here, but this article makes a compelling case for the Fed to have to cut rates sooner rather than later.
Kathy Klein: Where will the U.S. dollar go from here?
This is a great article from JPM that warns investors to watch for home bias in their portfolios. Despite international markets underperforming the U.S. markets for most of the past 15 years, the time may be approaching for international markets to resume the lead. This is all due to the most recent strength in the U.S. dollar, which is setting up a potential reversal. If the dollar weakens, historically, international markets outperform.
AJ Price: The Indexing Bomb
Investor behavior drives a substantial portion of long-term returns. As your portfolio value goes up over time, the same 20% market drop from five years ago suddenly has a much bigger dollar implication. So, while investing in index funds is a great idea for the equity portion of your portfolio, it’s important to allocate to other asset classes as well if it will allow you to remain disciplined and stick to your plan.
I thought this was a great article on the perils of too much information. Yes, “Knowledge is Good,” but sometimes too much knowledge spurs bad decisions. Our best advice is often “Don’t over analyze, and don’t look too much.” This summer, I’m going to try to apply those same concepts to my golf game.
Michael Tuber: Fed’s Powell vs. inflation vs. the markets
It’s no surprise that the market continues to grapple with conflicting data. While the Fed continues its attempt to achieve its dual mandate of price stability and full employment, investors are trying to make heads or tails of where we go from here. This article does a nice job of reviewing the short-term haziness created by recent bank struggles and how that dovetails with the Fed’s plans to combat inflation.
We look forward to sharing more articles with you in the future. In the meantime, if you’d like to discuss how the topics in these pieces may apply to your own portfolio, please do not hesitate to reach out to a member of our team.
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