Investment Newsletter for the End of May, 2019

May was a poor month for the markets. All indexes and your portfolios are down. The prior month April was very good. The market fluctuates a lot. It is hard to read much sense into it on a short-term basis.

So, why does it go up and down? There must be a reason. The talking heads on tv and the other commentators (we will call them the “experts”) declare a reason for every day’s movement. Some days they may have several reasons depending on the time of day. The reality is the declared reasons are bunk. No one really knows but the audience will not accept that answer.

We just had a bad month. Is the reason the China tariff fight, the Mexico proposed tariffs, general fear (Chicken Little: “The sky is falling”), computer trading by the big hedge funds, random noise, or some other factor? It is probably some combination of the above but we can never find out. So, we take our best guess.

We choose to follow a plan rather than have the talking heads tell us what to do. Our plan is based on percentage allocations based in turn on your risk profile. We do not like reacting to fear and greed. Incidentally, we are watching the decline closely and will likely be rebalancing (by buying more stock/stock funds) if the market declines more.

We have introduced large cap dividend stocks to many clients. About fifteen portfolios now include a collection of these companies. So far, clients have been very pleased with this inclusion. We have identified six or seven very large companies with long established dividends in the neighborhood of 5%. Shell Oil, Phillip Morris, IBM, Haines Brands, AT&T, etc. have been in business for many years without missing a dividend payment. Our typical pattern is to identify five or so of these stocks that you have no personal objection to (hello Phillip Morris) and allocate 2% to each. We then reduce the bond allocations some and the stock allocations some. These stocks are riskier than stock funds but a lot less risky than regular stocks. They also pay much better than bonds/bond funds. We include these stocks in the allocation plan. We buy and sell when they go out of allocation. Discipline always. No exceptions.

Please let us know if you are interested in knowing more concerning these stocks and how they could be useful to you

Dan and Eli

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. I will waive personal tax return fees for accounts over $1 million. 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

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