Your Investments: 4th Quarter Recap and Some Perspective
January 9, 2012 | 
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Anxiety over recent market developments is completely understandable, and it is quite human to feel concerned about events in Europe. But amid all the bad news, it is also clear that the world is changing in positive ways that provide plenty of cause for hope and, at the very least, gratitude for what we already have.
If you have questions about your investments, or want to discuss your financial plan, contact us today. The beginning of the year is a good time to set some goals!
Q4 Report- What does Your Investment Portfolio have to do with Brad Pitt??
November 18, 2011 | Subscribe to our RSS Feed
What do Brad Pitt, “best selling” author Michael Lewis, and this year’s stock market bump share in common?
Recently, I finished reading the New York Times bestseller, Moneyball, and was drawn to the similarities between baseball’s use of statistical analysis to evaluate undervalued players (sabermetrics) and the processes we deploy in managing our clients’ investment risk in their diversified equity portfolios. It seems that when sufficient information exists, markets are efficient at processing the information, determining the true value of all things in that market, be it investments or baseball players. As we saw in major league baseball, whatever inefficiencies may exist are eliminated over time.
Widespread studies on investor psychology reveal that many individuals abandon their investment plans in the face of negative news and painful losses in their portfolios. Knee jerk reactions such as this wreck havoc with their long term investment strategy, and cause realized losses that the investor may never recover from. Instead of realizing losses, investors should understand that the long-term upside potential of equity investments are greatly enhanced after a prolonged period of loss, as historically low prices are the catalyst for the next bull market. Don’t forget, the largest run up in the stock market in 75 years occurred immediately following the market disaster of 2008.
On Paul DePodesta talking with Michael Lewis, “It’s looking at process rather than outcomes,” Paul says. “Too many people make decisions based on outcomes rather than process.” Lewis, Michael , Moneyball – The Art of Winning an Unfair Game, W.W. Norton & Co., New York, NY, 2004, p. 146.
Paul, we feel your pain. This is the most common theme we encounter with clients and we strive to help them stay true to their long term investment plan. Our client portfolios are statistically designed to capture market returns. Said another way, our portfolios possess a very high probability of providing successful outcomes for our clients. But, this requires commitment to a long term portfolio management process. Any deviations or short cuts from the process will only add additional risk to the desired probable outcome.
The above chart illustrates the rolling 10 year returns for the S&P 500 Index. We see a handful of negative returns, but in each instance, the following cycles produce satisfactory if not spectacular returns. Billy Beane, the Oakland A’s General Manager (as played by Brad Pitt in Moneyball), recognized early on that baseball was managed like the Good Old Boys club, and that it was resistant to change. Following his belief system, choosing to apply process over gut feeling, he is widely credited with changing the way professional baseball is managed today with its’ use of sabermetrics. Much like Moneyball, our hope is that this chart will help you see the “light at the end of the tunnel” and encourage you to hold the course.
Graph represents the S&P 500 Index from 1928 through 2010.
Past performance is not a guarantee of future results.
Securities by Licensed Individuals Offered Through Triad Advisors, Inc., A Registered Broker/Dealer. Member FINRA/SIPC.
Q3 Report- What happened to Your Personal Finances in 6 Bullets
October 14, 2011 | Subscribe to our RSS Feed
The third quarter of 2011 was a tumultuous period in the stock market for your portfolio. Glass Jacobson Investment Advisors breaks down the activity and its effects on your investments in our 2011 Q3 Investment Review in 6 simple bullets and a timeline.
We also touch on a few things to think about in the stock market going forward.
If you haven’t revisited your personal finances recently, contact us to make sure you are still on track.
Questions?
jon.dinkins@@glassjacobsonIA.com
Empty Nesters- Protect Yourself! ~ Highlights from the day.
September 20, 2011 | Subscribe to our RSS Feed
Today, in partnership with Hodes, Pessin, & Katz, P.A., Glass Jacobson’s Women in Business Practice hosted the first in the 2011-2012 series, “Women: Protect Yourself. Financial & Legal Strategies for Navigating Life’s Stages.” The series is dedicated to helping women navigate the unique challenges they face.
Today’s seminar, held over lunch, focused on women in the empty nest stage. Women at this time in their lives finally have a moment to think about their own future! Christine Schmitz of Glass Jacobson shared some interesting financial tools women can use to accumulate assets for their retirement, Kim Battaglia of Hodes, Pessin and Katz talked about legal ways to protect those assets, and our special guest, Elise Rubinstein, a Health Coach, helped us understand how we can feel good enough to enjoy them.
We will be posting the tools, articles and handouts from today’s session here.
Our next seminar, Business 101, is scheduled for November 15th from 11:45-1:30. More details to follow.
Market Observations- The Perceived Instability of Markets
August 16, 2011 | Subscribe to our RSS Feed
| Market/Index | 2010 Close | Prior Week | As of 8/12 | Week Change | YTD Change |
| DJIA | 11577.51 | 11444.61 | 11269.02 | -1.53% | -2.66% |
| NASDAQ | 2652.87 | 2532.41 | 2507.98 | -.96% | -5.46% |
| S&P 500 | 1257.64 | 1199.38 | 1178.81 | -1.72% | -6.27% |
| Russell 2000 | 783.65 | 714.63 | 697.50 | -2.40% | -10.99% |
| Global Dow | 2087.44 | 1906.46 | 1861.30 | -2.37% | -10.83% |
| Fed. Funds | .25% | .25% | .25% | 0 bps | 0 bps |
| 10-year Treasuries | 3.30% | 2.58% | 2.24% | -34 bps | -106 bps |
Volatility was the name of the game last week, marked by the Dow’s history-making 400-point daily swings over a four-day period, driven primarily by the S&P’s downgrade of the U.S. credit rating and the European debt crisis.
Recent weeks have seen investors lowering their growth expectations on a worldwide basis. Their wide-ranging worries concerning the strength of the world markets are very reasonable, given that available fiscal and monetary policies designed to stimulate have already been set in motion in numerous areas globally.
The Federal Reserve announced at its regular policy meeting last week that it intends to maintain the Fed Funds rate at its current level (0% to 0.25%) through mid-2013. This is the first time the Fed has ever provided a set timeframe on a rate decision. In its commentary, the Fed indicated that first-half growth in 2011 was “significantly lower” and consequently lowered its future expectations.
While the Fed may be right in its belief that the U.S. economy’s growth will be weak, we maintain our view that fundamentals will be enough to keep us on the path to recovery. Nonetheless, given the worsening financial conditions, it is becoming apparent that, if central banks were to intercede, it may improve confidence and ease the pressure on the economy. Currently, the Bank of England and the Fed are considering more asset purchases and the ECB may be getting ready to expand its bond-purchase program.
On a positive note, initial jobless claims for the week ended August 6 came in under the 400,000 mark. This supports our expectation that the labor market continues to slowly strengthen. Also of note, June retail sales figures were revised upward, and July’s retail sales increased.
It is clear to us that a double-dip recession in the United States is weighing on our clients minds. We ask that clients consider that market behavior is an unreliable gauge of recessions and company fundamentals continue to be robust. Companies are holding cash on their books at a level not seen in over 60 years. Cash on the books of non-financial corporations is running around 11%. Additionally, earnings results in the second-quarter reflect an 18% year-over-year increase in conjunction with an approximate 10% climb in revenues. While stock prices are hovering around 35% below where they were four years ago, corporate earnings are on a path this year to outdo the highs they set back then. This setting further highlights how incredibly cheap stocks are right now. So, while the market may be choppy in the near-term due to the current economic issues and debt concerns, our long-term attitude towards equities remains optimistic.
Questions?
vanessa.duchman@glassjacobsonia.com
Glass Jacobson Investment Advisors, LLC (GJIA) provides investment and wealth management. Securities products and brokerage services are offered through Triad Advisors, Schwab Institutional, and/or Fidelity Registered Investment Advisory Group, registered broker-dealers and members of FINRA and SIPC. Insurance products and advice may be provided by licensed insurance agencies that are not affiliated with GJIA. A licensed insurance agent will receive compensation if you choose to purchase insurance through GJIA. A decision to purchase insurance will not affect the cost or availability of other products or services from GJIA. GJIA does not provide legal, tax, or accounting advice. Investments and Insurance: Not FDIC Insured. No Bank or Federal Government Guarantee. May Lose Value.