Details Are Part of Our Difference
Embracing the Evidence at Anheuser-Busch – Mid 1980s
529 Best Practices
David Booth on How to Choose an Advisor
The One Minute Audio Clip You Need to Hear
Category: Philosophy
The Year Your Neighbor’s Returns Were Better
2014 may go down in financial history as the year that globally diversified investors like us lost. Your neighbor and most other investors won, and they did so with their concentrated, US Large cap portfolio. Large U.S. companies enjoyed a double-digit year, while other markets experienced negative or mediocre results, especially for international, emerging market and small-cap stocks. In a recent article from Larry Swedroe, he points out that this is a great test of our investment temperament.
Although the U.S. S&P 500 Index has outperformed the MSCI EAFE (international stock) Index since 2010 by an annualized return of around 9 percent, the MSCI EAFE happened to deliver about the same outperformance in reverse from 2002–2007. Clearly, the tables can turn abruptly and destructively for the nondiversified investor. As Swedroe says, “Diversification is like insurance. It’s insurance against having all your eggs in the wrong basket.” Remember, a year is just a year in a multi-decade investing journey, which is why we always say, “Take the long view.”
Adding to Your Legacy
We often encourage our clients to share more than just facts and figures about their own estates with heirs. More importantly, you might consider preparing something like an Ethical Will. Check out this piece from The New York Times to explore in more detail.
Confessions of a Financial Writer
Thoughts from writing consultant, Clint Willis:
I started writing about investing in 1981, as a 24-year-old reporter for Money magazine—the only mainstream publication focused on personal finance in those days. Since then I’ve written or edited millions of words of financial and other writing for books, magazines, websites, newsletters…name it.
These days, I’m an owner of The Writing Company, in Portland, Maine; we create editorial content for advisors, financial service firms and media companies. My colleague, Sean Donahue, and I are working with Matt Hall on a book about his career as an evidence-based investor. I think the book is going to change lives. It’s already changed the way I invest.
