Blog

Howard Marks, Co-Chairman of Oaktree Capital, is a highly successful investor. A recent letter to shareholders penned by Marks contained what I thought is excellent wisdom for investors on the topic of forecasting.

There is a long-running investment industry debate about which investment strategy is better, value stock investing or growth stock investing. “Value” stocks have traditionally been defined as stocks with low valuations (e.g. low price-to-earnings ratios). “Growth” stocks have been defined as companies with above average revenue and earnings growth.

We believe at S.R. Schill & Associates that being part of community is important especially during these difficult times. Our firm is honored to be a member of the Mercer Island business community and I am proud, as a member of the SRSA team, to serve on the Board of Directors of the Mercer Island Chamber of Commerce.

Recent interest rate reductions by the Federal Reserve have caused many banks to lower their rates paid on money market checking and savings accounts in some cases to levels of 1% or less.

We recently added to our equity exposure as a result of the tripping of an investment trigger.

The Covid-19 event has unfortunately resulted in significant job losses on a scale not seen since the Great Depression. For many people facing a crisis like this, they may think financial planning must take a back seat to finding a job. Ironically, this may now be the best time for someone in this situation to work with an experienced financial planner to update or create a financial plan.

The recovery in the stock market from the March 23 low has surprised many people. How can the market go up when everything looks so bad right now? The reason is the market is a “discount” mechanism, meaning it will look forward as best it can and reflect in today’s current price what it believes is the outlook for corporate profits say 6, 12, 24 months out.

One thing we have been doing actively over the past few weeks is reaching out to clients to get a read on their state of mind with respect to not only their health and well-being but also about concerns surrounding their investment portfolios and financial plans. It has been heartening that we have actually had very few who have expressed a high level of anxiety about their investment portfolios.

This weekend’s Barron’s magazine ran an interesting article about Annie Duke, a world champion poker player. Annie now provides consulting and coaching services to managers in the financial services industry. Her insights into risk management under uncertainty can be extremely valuable.

Yesterday I posted on how market timing can materially reduce long-term investment returns. An excellent way to eliminate the negative impacts of emotionally-based market timing is through holding a portfolio that is diversified across several asset classes.