Quarterly Client Letter – 2019 Q1
Another quarter has come and gone; a tick of the second hand in your lifelong financial journey.
At this moment, we can compare and contrast the current quarter-end to recent rounds. As a Wall Street Journal article summarized, “Stock investors have been on a wild ride the past six or so months: The S&P 500 has gone from a record high, to being on the cusp of a bear market, to being back within striking distance of its recent peak.”
At this moment, financial headlines are closely watching what’s in store for Brexit, the shape of the U.S. Treasury yield curve, China trade talks, and other potential slowdowns and stimuli.
At this moment, a financial commentator proposed a new “golden cross” is supposedly signaling a bull market ahead, based on comparing the 50-day moving average to the 200-day moving average. Noting the historical data isn’t sufficient to be telling, the author admits (emphasis ours): “The crosses derive their power not because there is something inherent but because many investors believe in them and act on them. Moreover, the media like the stories of golden crosses and death crosses, and promote them. This generates bullish or bearish sentiment.”
Seriously? Then there’s our perspective.
As always, this sort of circular logic leads too many investors astray. As you reflect on any forecasting “powers” reported in the popular press, remember the vast majority of them are premised on what may be the flimsiest platform ever devised: human sentiment.
As always, remember how easy it is to get tangled up in the ticks and tocks. There are always causes for global socioeconomic concern. There are almost always cases for optimism as well. Either way, remember these words from financial luminary William Bernstein, MD, PhD, in his March 1 commentary: “Investing, after all, is an operation that transfers wealth to those who have a process and can execute it from those who do not and cannot; from what I’ve seen, the average investor’s strategy consists of pride when prices rise and panic when they fall.”
As always, we encourage you to rise above the news of the day. It is our special privilege to help you do just that. There will always be plenty of prognosticators, enticing you to grab at “golden” opportunities. Fortunately, there are many voices of reason among us as well.
As we reflect on what may be this past quarter’s most meaningful news, we mourn the loss of one of our greatest allies on this front. Investors lost a staunch friend with the January 16 passing of John “Jack” C. Bogle, Vanguard founder and father of the first publicly traded index fund. In his honor, we recall one of his countless worthy observations (as shared by Jason Zweig): “If they can take your integrity away from you, it’s not integrity.”
These are words to live by – at home, in the office, and not least of all, as an investor. At this moment, and as always, please let us know whenever we can help you cut through the clutter toward your clear investment course.
Disclosure: Advisory services are offered through Excel Financial, LLC, which is registered as an investment advisor with the United States Securities and Exchange Commission (SEC). Excel Financial, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.
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The information contained in this newsletter have been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness, and does not purport to be a complete analysis of the materials discussed.