09.18.2019
For US-based investors, being a globally diversified equity investor has been somewhat disappointing since 2010. While global equities have performed strongly on an absolute basis, the non-US component of our portfolios has generally been a drag on overall performance as US stocks have broadly outperformed a basket of international developed and emerging market stocks for […]
05.30.2019
The average annual rate of inflation in the United States has been slowly (if unevenly) declining for the past 40 years. Inflation rates averaged about 4% per year in the 1980’s, declined to around 3% in the early1990’s, fell below 1% by 2010 and today hover just under 2%. If we study market-based indicators of […]
04.30.2019
If you’re like most working Americans, you will be entitled to a Social Security benefit when you reach age 62. The formula for calculating an individual’s benefits is fairly complicated, involving “average indexed monthly earnings” and “bend points”, but the inputs are rather simple — it is based on the number of [high earning] years […]
02.25.2019
Sooner or later, nearly all homeowners ask themselves “Should we pay off our mortgage early”? The question is almost deceptively simple to state, but can be surprisingly complicated to answer. The reason for the complexity is that merits of “pre-paying” a mortgage balance involve multiple considerations, including- The current interest rate on the mortgage, whether […]
01.24.2019
Last year ended a nine year run of positive returns for the US stock market. As evidence-based investors, we know that investing involves risk, and that negative returns are always a possibility. A year like 2018 should not be unexpected, even if the timing of negative years is unpredictable. And while the magnitude of negative […]
11.08.2018
Would you feel comfortable owning a portfolio that was 100% invested in a single stock? Now before you answer, what if I told you this was not just any stock, but a really good, solid company. A household name. A recognized leader. A stock that has performed well through thick and thin. A company run […]
10.02.2018
No one ever said that market timing is easy. One reason for the high failure rate is that market prices incorporate new information almost instantly; another is that prices often react in unexpected ways. For example, in just the last two years, we’ve experienced the contentious 2016 election, rising interest rates, tensions with North Korea, […]
08.24.2018
Next month will mark the ten year anniversary of the Lehman Brother’s bankruptcy, a shocking and unexpected event that helped catapult what had been a relatively mild recession and bear market into the Global Financial Crisis we all remember too well. And while all tropical storms get their own proper name, very few recessions do! […]
07.10.2018
Through the first quarter of 2018, the post – WWII annualized, real (inflation-adjusted) compounded total return on the S&P 500 has been 7.57%. This is an extraordinarily high real rate of return, handily beating bonds, commodities, gold and real estate. It is especially impressive considering that real (inflation-adjusted) growth in US Gross Domestic Product over […]
04.26.2018
Many investors today are increasingly looking at more than just risk and return in their portfolios – they are also hoping to make a positive “impact” with their investment dollars. This has led to an explosion in popularity in what is now the fastest growing category of investment style today: Environmental, Socially-responsible (or Sustainable) and […]
03.26.2018
Everything, they say, has its price. Well perhaps not family, love or friendship but certainly most things do! And it turns out that even money itself has a price – and we refer to that price as the “interest rate.” Interest rates gauge the level of our “interest” in obtaining (or lending) money. When money […]
02.23.2018
Well that was exciting! Until this month’s ~10% “correction” in world equity markets, volatility had fallen so far below historical averages that stock market movements had almost begun to resemble the relative tranquility of fixed income markets. For months on end, equity returns were generally positive and steady – in fact, the S&P 500 did […]
01.25.2018
You may have noticed that interest rates around the world have generally moved higher over the last few months. Predictably, this has encouraged certain investment “gurus” to issue increasingly vocal warnings to fixed income investors to “sell now!” or face heavy losses. A “bond bear market” is right around the corner they say! Is there […]
11.30.2017
Most investors instinctively know that investing and gambling are not the same thing. At the same time, they may find it difficult to articulate exactly why they are different. They are both often considered in a similar context — in fact, when asked to describe their personal investment strategy, investors sometimes resort to using gambling […]
10.30.2017
As evidence-based investors, we know that in aggregate, the relative performance record for active mutual fund managers is dismal. Depending on the asset class in question, roughly 80%-90% of active equity managers have underperformed their benchmark index in any given 10-year period, and these poor results are actually worsening over time. The amount of the […]
09.28.2017
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” -Mark Twain At Vickery Financial, we know that successful investing is not easy. It requires, among other things, a disciplined plan, a consistent and well-reasoned investment philosophy and a long-term view. But even with […]
08.25.2017
At Vickery Financial, we know that everyone wants a successful investment experience. Unfortunately, there are several obstacles in our way toward achieving that goal. Some of these obstacles are simply ‘frictions’ or costs that can be reduced but not entirely eliminated. These would include investment management fees, mutual fund expenses, trading costs and of course, […]
07.27.2017
Investing, as we all know, involves risk. In fact, there are several – to name just a few, there is market risk, interest rate risk, currency risk, default risk, political risk, economic risk, and even natural disaster risk. Now if you want to avoid most of these risks, you can always keep all of your […]
06.28.2017
If you happen to tune into the financial media (and we don’t recommend it!), you will undoubtedly hear frequent references to “the market”. The reporters and commentators will discuss not only what “the market” did, but also how it looks to them, and even how it feels, as in “the market looks strong”, “the market […]
05.10.2017
If the US stock market made a noise it would sound like crickets right now. As I write this piece in early May, the S&P 500 index has not moved up or down by more than 0.2% for the last nine trading days in a row. The last time the market experienced such a long […]
04.17.2017
Here’s a pop quiz for you: How many stocks are in the Standard & Poor’s 500 Index? Hint: There’s a big clue in the name of the index. If you answered “500”, you’re correct! That was too easy, right? OK, here’s another one: How many stocks are in the Wilshire 5000 Index? The answer is […]
03.22.2017
I’d like to start this month’s commentary with a moment of silence for the actively managed investment industry. Net client cash flows have been negative since 2004 for actively managed mutual funds, and the latest Morningstar data offers no relief on that front. Investors withdrew $340 billion from actively managed funds and deposited more than […]
02.14.2017
At Vickery Financial, we throw the phrase “evidence-based investing” (or “EBI” for short) around fairly casually, without spending much time to actually define it. This month, I’d like to explain to our readers outside of the finance industry exactly what we mean by EBI and why we believe it offers the best path for a […]
01.19.2017
On the first day of my very first Investments course in college, our professor stated that he wished to take us all to the tattoo parlor down the street and have two phrases permanently inked on our arms. On one arm, he would write “Time Value of Money”; the other arm would read “Risk and […]
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