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Being a fairly regular attendee at church, I enjoy the reflection that comes from listening to our Clergy explain the liturgy in ways that tie our lives, habits and values to what is happening in the world around us. As with most large groups, I expect how the message is interpreted and acted on varies widely within the congregation. As our democracy embarks on a new period of its long evolution, concerns are at a crescendo and opinions on the outcome of issues are not always positive or optimistic. Under this backdrop, our Rector gave what I believe was a thoughtful sermon on how to put the current state of affairs in context while offering ways each of us could move forward in a caring, positive way as individuals. That should not come as a surprise given the role Clergy play in our communities. What might come as a surprise and at the risk of being accused of not paying attention, I couldn’t help but make a connection between the sermon’s foundation – VUCA – and what happens every day in Read on! →
Broadly speaking, value investments are those that are often acquired at a discount to their fair market price and that pay dividends. They also tend to be perceived as “steady” and less inclined to volatility relative to their more growth oriented counterparts. Our portfolios have a mix of U.S. and International equity investments classified as growth, but are more heavily weighted to value. Only the smallest portfolios, limited to broad market, passive index investments with roughly equal weightings of value and growth, may lack this lean to value. A closer look at portfolios will confirm this preference. In the large cap space, value investments like PowerShares Large Cap Value (ticker, PWV) and FMI International (ticker, FMIJX) generally represent a larger percentage of the overall portfolio than their growth counterparts, Schwab U.S. Large Cap Growth (ticker, SCHG) and WisdomTree Emerging Market Consumer ETF (ticker, EMCG). Berkshire Hathaway and IBM, which were added to larger portfolios almost a year ago, are two more examples of “value” companies. A close inspection of mid cap, small cap and emerging market investments will turn Read on! →
Although it may not yet feel like fall outside, we are approaching the last quarter of 2016 and the time when employer benefits open enrollment occurs for the coming year. Before that benefits package hits your mail/email, here are a few things to consider in advance and discuss with your advisor. Are you covered by a High Deductible Health Plan (HDHP)? An HDHP is defined as having a deductible of at least $1,300 for Singles or $2,600 for families. If your health plan qualifies, you are eligible to contribute pre-tax money to a Health Savings Account (HSA), up to $3,400 for Singles in 2017, or $6,750 for families per year. By contributing pre-tax money, you reduce your current taxable income, but more importantly, when the money is withdrawn from the HSA for qualified medical expenses, it comes out tax-free. There is currently no other investment vehicle in which pre-tax money goes in and tax-free money comes out. The ideal situation is to maximize contributions to the HSA each year you are eligible (by having a high deductible health Read on! →
The last few months have been filled with debate over how the Brexit vote would end. The markets have parroted this debate throughout the month of June with positive and negative swings leading up to last week’s vote. On Thursday, words turned to action and the argument reached a crescendo when 52% of the British citizens participating in the historic referendum, cast their vote to leave the European Union (EU). Much has been written and spoken since, about what this will mean to Britain and the world. Which countries will remain in the European Union, what it will mean to global markets and more broadly, what is the long term future of economic globalization? No one knows for sure how the next few weeks, months or years will evolve. What history suggests are world equity and bond markets will be volatile as news on the economic impact sorts itself out. They (markets) will steady as facts become clearer. Eventually, global markets will resume a more predictable pattern influenced more by traditional financial valuations and less by what seems to be Read on! →
In the last newsletter, I offered my perspective on the Dow Jones Transportation Index (DJTI) in the form of proxies that most everyone finds familiar. As expounded on in March, planes, trains and automobiles are important foundations of a successful U.S. economy and equity market. When reflecting on topics for May’s missive, it became clear while reading Berkshire Hathaway’s latest annual report that expanding on the trifecta might not only be fun, but also prove informative in a very portfolio specific way. It will not come as a surprise to readers who have owned Berkshire Hathaway (BRK.A & BRK.B) for a number of years, or to those who may have just purchased the company stock last year, that its per-share market value experienced a drop of 12.5% in 2015. While somewhat disappointing, we concluded the decline created an attractive discount to the company’s fair market value. Select legacy holdings and new positions were subsequently increased and added, respectively. While it is impossible to predict long term results, we are pleased to share that BRK.B (share class owned by Clearview clients) Read on! →