Current Commentary

The inflation adjusted Dow or similar “inflation adjusted” measures of performance remind us that earnings and returns on investment, in the end, are about what you can buy with your profits. As the cost of living rises inexorably, we all need to generate greater dollars to maintain and hopefully improve our wealth. We hear of “record” levels for stocks, from time to time but without adjusting for inflation this is as deceptive as comparing Elvis Presley’s 1956 earnings to those of Taylor Swift in 2014. So the chart below is one I like to check from time to time, as it tells us if markets are truly making progress for investors over longer time spans.
As I noted here last year and at our annual client event, this chart should get a true “technician” excited. Any asset class whose real level is able to exceed the level that has held it in check for some 13 years is usually sending a strong continuation signal.

I recommend this article to anyone thinking of buying individual property as an investment. We've used real estate investment trusts in our client portfolios for many years with good results. The nice thing about REITS is they allow the investor to exit rapidly rather than becoming entangled in the often lengthy process of negotiations with a limited number of buyers a problem that characterizes ownership of individual properties. Even better, the investor avoids the hassle of property management.

"Why Real Estate Should Be in Your Portfolio" Barron's | Jan Willem Vis Investors who have been inclined to dismiss listed real estate as an attractive asset class since the financial crisis should perhaps reconsider, as they could be missing out on the important roles that listed real estate can play in multi-asset portfolios. Not only can it operate as a proxy for direct real estate while generating diversified returns - with a stronger income component arising from high dividends - it can also provide some protection against rising interest rates, which may come as a surprise to some. Evidence shows that, over the long term, investment in listed real estate offers an exposure to direct real estate (including real estate physical property investments and unlisted funds) while addressing the well-known illiquidity problems associated with owning a portfolio of individual buildings. Read More

While I've not read the Dept of Labor proposal, on the face it appears to target conflicts of interest that troubled me until deciding to become a "fee-for-service" financial planner at the end of 2000. My company, Trusted Financial Advisors has never been financed through commissions, hidden 12b1 fees or the like. This is still relatively rare in the financial [...]

Now it's clear, the Affordable Care Act was the ultimate "progressive" tax increase. Back in the '80's taxpayers rose up and forced Congress to index tax brackets so that inflation did not artificially force middle class earners to pay taxes at the same rate as the wealthy. The Obamacare taxes are not indexed, meaning over time, the middle class will [...]

Our clients’ managed accounts were up a fraction of a percent in the quarter just concluded, in line with the quiet performance of both stock and bond indexes.  While we are still compiling the figures, it appears a composite of size weighted client portfolios averaged between 9% and 10% per year over the past five years.

The Markets
Following the explosive upward action in equities that capped off a healthy 2014 for long positioned investors, the first quarter was burdened by three albatrosses:   A large portion of the country, particularly the Northeast was socked by repeated snowstorms and extreme winter weather that kept shoppers at home and construction activity frozen. On the West Coast, the Longshoreman's union battled management in a slowdown/strike that cost retailers at least $7BB in lost sales and countless $ billions for farmers whose exports were delayed or cancelled.

Utilities have always represented a significant component of our Balanced-Value portfolios. We try to find opportunities in an evolving industry.

Utilities Push Into Fuel Stations for Electric Cars
The New York Times | By Diane Cardwell
Since hitting the mass market about five years ago, electric vehicles have failed to take off, largely, experts say, because a robust network of public charging stations has not been built. Car companies, retail chains and members of an infant charger industry have announced... Read More