January 15, 2019
Volatility returned to the market with a vengeance in the fourth quarter. As we’ve mentioned before, the last 10 years were unusually calm. It was easy to be lulled into complacency.
Here, in an article by Dana Anspach of thebalance.com., are some statistics about the S&P upside/downside performance:
|Time Frame||S&P 500 was up||S&P 500 was down|
|Days||53% of the time||47%|
|Months||58% of the time||42%|
|Quarters||63% of the time||37%|
|Years||72% of the time||28%|
|5-year rolling time periods||76% of the time||24%|
|10-year rolling time periods||88% of the time||12%|
As you can see, by the table, the longer your money is invested, the more likely you are to have a positive outcome.
Within two days (at the time of this writing), we had a decline in the Dow Jones Industrial Average of over 1100 points and then a rise of over 1000 points. Was the value of any company different on one day to the next? No. What was different was the reaction to headlines. Over time, market valuations are the criterion for market returns. There is no shortage of concerns on the horizon:
We anticipate continued market volatility. We urge you to take the long view. If you are withdrawing from your investments, we set aside the disbursement amounts in a money market and/or low volatility funds so the remainder of your portfolio may grow for the future.
We urge you to contact us to discuss your portfolio, risk, and financial plan so we can keep each other up-to-date as we move forward.
Many companies are actively seeking to diversify their workforce, and create senior positions to spearhead this effort. Lesley Slaton Brown, HP’s Chief Diversity Officer said, “We believe that diversity and inclusion drive new business.”
Is there quantifiable evidence? YES!
Credit Suisse studied 3,000 global compa-nies with 27,000 managers. When women occupied 25% of the decision-making positions, companies had a 4% higher rate on investment returns. Further, a 10% higher cash flow from investment returns benefited companies’ finances when women represented 50% of senior managers, as compared to other companies in the MSCI All Country World Index.
McKinsey reviewed 1,000 companies, dividing them into performance quartiles. The top quartiles with diversity of gender, ethnicity, and culture resulted in 21% outperformance of profitability compared to industry averages. And in the bottom quartile, companies with less diversity were 29% less likely to show profitability above industry averages.
BCG and the Technical University of Munich conducted surveys in Austria, Germany, and Switzerland with similar results.
Based on article in Barron’s by Cheryl Strauss Einhorn, January 4, 2019.
As we combine more and more accessories and devices into fewer and fewer devices, we sometimes make holiday shopping more difficult than it used to be.
Some examples include:
We’re not saying this evolution is good, but it goes on whether or not we want it.
We are having more and more discussions with clients about socially conscious investment (SCI). There are a multitude of acronyms such as Socially Responsible Investing (SRI), ESG, and II. Each term has its own nuance but the bottom line means investing in companies that coincide with your values.
There is an impression that millennials are the drivers behind increases in this investment style. A study by Advisor Perspectives says otherwise.
Financial Connections has invested in SCI funds for years, but only recently have the choices of investment vehicles exploded. There are now over 275 mutual funds and exchange-traded funds (ETFs) targeted to impact investing. Each fund may interpret impact investing differently. Few of the new funds have a performance track record.
We will track the performance of the new funds and ETFs to determine if any fit into our current stable of funds.
If you would like to speak with us about this type of investing in your portfolio, please don’t hesitate to contact us.
THANKSGIVING CHARITY postcards’ results are:
|California Fire Foundation||110|
|Golden Gate National Park Conservancy||4|
|Wildlife Conservation Network||8|
|SF Bay Area Food Banks||20|
This was an 81% response rate. THANK YOU.