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.”

[See our follow-up post for additional data.]

We have an annual celebration and it keeps getting bigger and better! The photo below is from our annual Christmas party at the Saint Louis Club. We look forward to celebrating Hill Investment Group’s 10th Anniversary with you in 2015 – Details to come later in the year!

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.