2013

2013 Q4 Commentary: Investing in Uncharted Territory

2013 Q4 Commentary: Investing in Uncharted Territory
“The less prudence with which others conduct their affairs, the more prudence we must use in conducting our own.”

 

-- Howard Marks’ favorite quote

As a portfolio manager, I have two jobs: 1) Define the playing field by understanding risk and 2) Once the playing field is defined, invest in opportunities that offer our clients the best risk adjusted return in order to achieve their goals. Last quarter we discussed our probabilistic approach in defining the playing field and understanding the dynamic of the risk/return tradeoff. This quarter I will update you on our thoughts on risk and share some thoughts on portfolio construction in light of these risks and uncertainty.

Confessions of a Recovering Engineer

Confessions of a Recovering Engineer

It is with great excitement that I write this as a partner of the Pilot team. As I have shared this pending development with those familiar with my work in Activate Leadership, more than once I've been asked, "What does leadership development have to do with wealth management?"

It is a great question and my response is one I will share with you, however, a little background first for those I haven't had the opportunity to meet just yet.

2013 Q2 Market Commentary

2013 Q2 Market Commentary

Having a small farm outside Sherwood and being someone interested in cultivating my green thumb, we planted a few pinot noir vines last year.

In the vineyard, vintners are often at the mercy of the climate and weather. The delicate, thin skinned, Pinot Noir grape, for example, needs a minimum number of growing degree days, but not too much, as raisins make for poor quality wine.

Both the climate (i.e., location of the vineyard), but also the weather in an individual vineyard, are crucial. So it is with investments.

2013 Q1 Market Commentary

2013 Q1 Market Commentary

The double digit stock market returns we experienced in the first quarter should give us a reason to pause. Being 48 months removed from the financial crisis, we feel investors have developed unrealistic expectations for future returns, which will ultimately lead to disappointment. Given the prospects for future gains, we should expect that dividends will make up more than 50% of domestic stock market returns over the next 10 years. Meanwhile, bonds are underappreciated by investors. This is due to the expectation of rising interest rates. In our view, investors have forgotten the benefits of the liquidity and diversification that bonds offer. Lastly, as has occurred in Cyprus recently, when small and largely inconsequential events occur to the detriment of a few, it should serve as a sober reminder of the risks we regularly face as investors, especially when risks are largely ignored.