RESOURCES

Planning for the future and investing are complicated. As a fee-only, fiduciary, Registered Investment Advisor, we can help clients plan and prepare.

While predicting the direction of the economy looks hard here, analysts are clearly optimistic about corporate earnings, foreseeing strong profit growth for the foreseeable future. Investors are willing to place rich multiples on these rosy projections, driving the market to extremely high levels when using historical metrics (trailing EPS, book value, size of the economy, replacement cost, etc). This market has been driven on easy money and speculation, but there are signs the speculative fervor is starting to cool. “Buying the dip” has been a profitable strategy since 2009, so this slight decline could be ephemeral. This strategy does not always work, however - sometimes the supposed dip is just the first part of a major plunge. It is impossible to confidently predict when that will happen, but the conditions are in place. Investors are wise to be cautious.

Larson Patty explains why he is helping clients at Rothman Investment Management. “Beautiful Presentation” by RomanSenykMusic. Used by Permission. www.patreon.com/romansenyk https://www.youtube.com/channel/UCbxxEi-ImPlbLx5F-fHetEg

Many investment advisors operate on a commission basis where they are incentivized to sell products to their clients. Fee-only advisors charge fees for advice, so they have no incentive to promote certain solutions over others.

Diversifying across multiple factors may be even more effective than asset class diversification. Recent academic research has led to an explosion of factors. Swedroe and Berkin try to narrow down this list, narrowing the “factor zoo” from six hundred purported factors to eight usable ones.

What is troubling now is the scale of the speculation, the coordination of the speculators on seemingly arbitrary targets, and the way they are using a calculated approach to maximize their manipulative impact