Portfolio Advisors Blog

This short and compelling article reinforces the premise that "Investors can benefit from consistent exposure to both US and non-US equities." It examines "The Lost Decade," a period in which the S&P 500 recorded a total return of -9.1%. The article goes on to point out that while the S&P 500 was negative for this 10 year period, "conditions were more favorable for global equity investors as most equity asset classes outside the US generated positive returns over the course of the decade." By investing in both US and non-US equities, investors are best positioned to capture global market returns.

Please click this link to access the complete article: Why-Should-You-Diversify.pdf

No doubt about it, the year has gotten off to a rocky start as reflected in the January S&P 500 index return of -4.96%. This, the ninth lowest return for the index since 1926, has investors wondering whether these returns have some predictive power for returns throughout the rest of 2016. In looking back over the past 90 years, we see that a negative January was followed by a subsequent 11 month return that was positive 59% of those years, with an average return of 7%. Further, looking at just the 5 lowest January returns (excluding January, 2016), we see that the following 11 months in those years had an average return of 14%.

While we can't predict how markets will react based on the past, we can say that a negative January does not necessarily predict poor market returns for the rest of the year. Further, returns over any period can be positive or negative. As such, we believe that investors should maintain a disciplined approach through all periods in order to capture returns the market offers.

Yes.  While stock market volatility is unsettling, it is also quite normal.  We have provided two graphs that help demonstrate stock market volatility.  The first graph, "US Market Intra-year Gains and Declines vs. Calendar Year Returns," shows both the "highs" and the "lows" for each year from 1979 through 2014.  The black and red bars show the "highs" and "lows" of the market for each year.  The blue bar shows the actual return recorded for the year.  You will note that the calendar year return is often very different from the "highs" and "lows" that occurred during each year, and it is instructive to note that during this 36 year period, positive returns were achieved 83.3% of the time.  For further perspective, you may also view the second graph, "US Large Cap Market Intra-year Gains and Declines vs. Calendar Year Returns."  This graph provides even greater perspective as it looks at the largest US stocks for the period of 1926 through 2014.  During this 89 year period positive returns were achieved 73.3% of the time.  Both graphs provide a visual perspective of just how "normal" yearly market volatility is.  They also provide evidence which shows that investors that have remained disciplined have historically been rewarded for staying in their seats during these periods of unsettling volatility. 

Click below to view each graph.

Featured speakers include Dimensional Funds Vice President Weston Wellington presenting his topic, "Redefining Investment Advice."  Also, Dale de Goede,  Attorney at Law, will present his topic, "Top Ten Estate Planning Tips."   The Forum will be held on October 6^th at 5:30 p.m. in the University Business Center at California State University, Fresno.  Please see invitation and speaker bio for further details.

Event Invitation.pdf

Two recent articles, written by DFA Vice President Jim Parker, are both timely and compelling. The first article, entitled The China Syndrome, highlights the recent severe volatility in China's stock market, raising questions among many investors about the causes of the fall and the wider implications for the global economy and markets. The second article is entitled Greece is the Word. This article highlights how the world's markets and media financial pages have focused intensely on the standoff between debt-laden Greece and its international lenders. Both news stories have been fast-paced and difficult to keep up with. More importantly, the speculation about possible outcomes has been intense. In his articles, Parker offers insight that provides investors with a unique perspective.

While these world events can be both troubling and unpredictable, we believe the best approach remains diversifying across many countries and asset classes, staying focused on your own goals, and most of all, talking to your chosen advisor who understands your situation best.

In case you missed our College Planning webinar presented by Global College Search Associates in April, a recording is now available. This is a new recording as the audio problems experienced during the actual presentation have been corrected. Please click below.

The Path to a Successful College Search

At Portfolio Advisors, our approach to investing focuses on controlling the things which are actually within our ability to do so. This differs from the conventional approach that relies on market timing, stock picking, and active trading. We believe that the structure of the portfolio is the single most important aspect in determining returns. We also believe that controlling costs, by minimizing trading and using low cost funds, can have a significant positive impact on returns over time. As such, our fund family of choice is Dimensional Fund Advisors. For more than 30 years, Dimensional has been translating compelling research into practical investment solutions. We offer this four minute video that helps explain how Dimensional is different, and how their investment philosophy evolved by drawing upon the academic community.

To view, click on the link below.

There are some new and exciting changes at Portfolio Advisors that were announced by Mike Leffler in a letter sent to clients in early February.

Investors, besieged with financial news, reports, and information daily, may be inclined to constantly tinker or make adjustments to their portfolio. By following the advice from a recent article or a talking head, they can be susceptible to the latest fad or market predictions and may get caught up in the excitement of chasing what are all too often allusive returns. In his piece “The Art of Letting Go,” Dimensional Fund Vice President, Jim Parker suggests that investors might be better served by following the Chinese Taoism tenant of “wuwei,” or, “non-doing” than micro managing their portfolio. Find this month's article below.

From time to time we are asked to offer our opinion as to whether or not gold should be a part of one’s portfolio. While interest in gold seems to ebb and flow as economic reports and political events unfold, general interest seems to persist. As such, we thought Dimensional Funds VP Weston Wellington’s recent article exploring the merits of holding gold as an investment is instructive. Throughout the article Weston cites the thoughtful opinions of Warren Buffett. His comment that “where gold advocates see a safe harbor, Buffet sees just a different set of rocks to crash into” offers insight into his question of Who has the Midas Touch? Find this month’s article below.