The world is watching with concern the spread of the new coronavirus. The uncertainty is being felt around the globe, and it is unsettling on a human level as well as from the perspective of how markets respond.
One way advisors can add value to your bottom line is by helping you to minimize your tax bill. It’s referred to as tax efficiency. There are two main ways that advisors can help with tax efficiency:
“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
It’s easy to feel anxious about investing these days. Those who claim they can foresee market moves are out in force, on screen after screen, citing factors such as trade wars or the inverted yield curve as signals that stocks will soon go down.
“The bad news is time flies. The good news is your’re the pilot.” Michael Althsuler
IBM did research a few years ago proclaiming that 90% of the world’s data is being created every two years. That is an amazing statistic. More data has been created since October 2017 than all the prior years combined? More data will be created in the next two years than all prior years?
Each year, Dimensional analyzes returns from a large sample of US-based mutual funds. Our objective is to assess the performance of mutual fund managers relative to benchmarks. This year’s study updates results through 2018. The evidence shows that a majority of fund managers in the sample failed to deliver benchmark-beating returns after costs. We believe that the results of this research provide a strong case for relying on market prices when making investment decisions.
The theory is simple enough: The more risk you are willing to assume, the higher the expected potential return. The challenges, though, are selecting an asset allocation that will provide the returns you require to meet your long-term financial goals and sticking to the allocation through up and down markets.
The first decade of the 21st century, and the second one that’s drawing to a close, have reinforced for investors some timeless market lessons: Returns can vary sharply from one period to another. Holding a broadly diversified portfolio can help smooth out the swings.
How many of us have pushed the “Door Close” button on the elevator thinking it closed the door faster? Interestingly that button on most elevators is a placebo. It does not actually close the door faster. The sole purpose is to help impatient people have a better experience by giving them the illusion of control. Riders get to hit something to reduce stress without harming late arrivers. In addition, the doors will eventually close, so they get a feeling of accomplishment as well. Thus, our mental health is preserved without us knowing it was even influenced.