Newsletter for the End of March, 2018

Everyone’s portfolio is down for the quarter and flat or a little up for the month. “Say what! The market was lousy this month. How could I be flat?” So, what is going on?

The Dow went down this month by 926 points (3.7%). The S&P went down this month by 78 points (2.9%). You would expect that your portfolio would have gone down by something similar. There are three things here that you are missing.

  1. The Dow and the S&P are not the whole market. They are just what we look at really fast to visualize the market. The turmoil with trade tariffs and threats affected mostly large cap stocks. Smaller companies’ stock prices did not react. I look at the Dow many times every day. But, it is not what you are invested in. Your portfolios have a weighting towards small cap.
  2. A month is a very short period. Stocks and categories of stocks jiggle back and forth constantly. One-month long movements are meaningless noise. Next month could be very different or more of the same. Small cap will outperform large cap, but to really trust the result you need to look at multi-year long periods.
  3. I am magnificent. It is true but alas not for this reason. My input is to keep you steady and disciplined in the market. I try to keep fear and greed out of the portfolios, out of your thinking, I hold to plan. I have no control over whether the market has a fear fit or some politician says the wrong thing. I know to discount nonspecific investment news as meaningless. Sure, the market can go way down for a few days because of a meaningless trade fear. It may even stay down for a few months or longer. But, there is no way for me to predict what portion of the market will be trashed and what portion goes happily forward.

I wrote about the tariff/trade drama last month. I do not count news unless it is specific. General fears, threats without dates and amounts, etc. are not specific. I said last month I wanted to watch. Now we are hearing about countries getting waivers and exceptions (European Union). We are hearing that South Korea renegotiated their trade agreement with the US. In exchange for more imports of US auto parts and a cut in Korean steel exports, South Korea now gets a waiver from the steel tariffs. In short, I do not believe the tariff fear fit meant anything.

The new “crisis” stories are Trump criticizing Amazon for sales tax and shipping issues, Facebook being a jerk about privacy issues, and Tesla running out of cash. Their stock prices sharply dropped as a result. There is always something to scream “the sky is falling” about. And remember, I use mutual funds not individual stocks.

I wish to thank all of you for your business and trust.


Investment Fee Schedule

Rate Assets Under Management
1.44% Below $125,000
1.00% Between $125,000 and $750,000
.85% Between $750,000 and $1,250,000
.80% Between $1,250,000 and $1,750,000
.75% Between $1,750,000 and $2,500,000
.70% Between $2,500,000 and $3,250,000
.65% Between $3,250,000 and $4,250,000
.60% Above $4,250,000

A single rate is applied to the whole account. Compared to my old fee structure, under the new fee structure the cost for a $1 million account would be $500 lower per year and the cost for a $1.5 million account would be $1,500 lower per year. I will still waive personal tax return fees for accounts over $1 million. All services stay the same. I am just lowering my upper end fees. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.

As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. Please contact me if you would like to submit a post to my blog.

If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.

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Questions for the comments

Did my newsletter make sense? Do you agree or disagree with what I said?

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