The Tortoise Is Retired Comfortably
In this clickbait world, it can be easy to miss a significant news story. Newsletters about money and investing, like this one, can venture far from corporate profits, stock prices, and interest rates because so much of the world’s political, economic, social, and cultural news impacts asset prices. However, occasionally, there is news that is entirely within the domain of finance, and in 2024, we’ve already had a big one. It’s a story of the tortoise finally beating the hare, and the wisdom of focusing on the truly important things.
And They’re Off
2023 was a very good year for American stocks, with the S&P 500 up 24.23% (26.44% with dividends) after closing out the year up 4.42% in December. This is despite the fact that the economic and geopolitical news was pretty awful. Interest rates rose multiple times, 30-year home loans were over 7%, inflation remained stubbornly high, government spending was out of control (again), and there were two shooting wars involving nuclear-armed combatants.
Gradually and Suddenly. The Year Behind, and the Year Ahead.
What would life be like without compartmentalizing? For one thing, we probably wouldn’t celebrate the New Year or make resolutions. We might not be able to catch our breath, kick back, or just chill out if we didn’t have the calendar to give us emotional closure and a chance to regroup. For whatever reason, we humans seem to feel a need to draw a line, make a new start, and reset ourselves emotionally at the end of each year. We might be wise to consider that troubling trends don’t just disappear when the ball drops in Times Square.
Resolution in a Confounding Time
Sometimes the market news is good even when the economic news is terrible, and that was the case in 2023. When they go to make their New Year’s financial resolutions, Investors should bear in mind that it’s the things inside their control that will ultimately make all the difference.
The Cruelest Month
Events of the past year demonstrate the essential difficulty in predicting what the stock market will do but also remind us to put our efforts into maximizing after-tax returns. In this edition of the Family Office Chronicle, we’ll recommend some practical tips to keep more of what you earn in your investment accounts.
Frenemies
The world is a messy, complicated, often dangerous place. But it’s also a global marketplace of raw materials, finished goods and energy, decades into the process of Globalization. That process requires that very different cultural and political societies and nations compete but also cooperate. For now, and for a long time to come, China and the United States will be the dominant players in this dangerous game.
Full Faith and Credit
To that nearly infinite list of things beyond our individual control, we can add the financial strength of the U.S. dollar and its impact on interest rates. The recent downgrade of U.S. government debt has stoked enthusiasm for dollar alternatives, but investors should read the fine print very carefully before committing to speculative investments.
Summer Doomscrolling
Among the wonders of humanity are the biases that show up in investing. These biases operate across the entire spectrum, from the greed induced by FOMO to the fear that comes from the herding instinct. The cure for these biases lies in understanding their origin, and modeling on behaviors that produce positive outcomes.
Home Sweet Home
Housing prices are in the news again. This topic isn’t all that new; the primary residence remains the largest asset on the balance sheet of