The increase in Internet connectivity in the past two decades has brought with it countless benefits in terms of productivity and access to knowledge. It has also brought investors 24/7 access to stock market news as well as their investment portfolios. This level of access can be useful, but overexposure can often leave investors feeling panicked or that they need to ‘do something’—to time the market.
“ Users are fickle, Friendster has proved that. Even a few people leaving would reverberate through the entire userbase. The users are interconnected, that is the whole point. College kids are online because their friends are online, and if one domino goes, the other dominoes go, don’t you get that?”
–“The Social Network (2010)”: Mark Zuckerberg’s character to Eduardo Severin on the importance of the network staying up.
• Synchronized global growth continues as expansion enters 9th year after the Financial Crisis
• Central Banks own $11 trillion of government bonds, mortgage debt and corporate bonds
• Monetary stimulus will end and tightening begins in 2019
• Fundamentals should determine investment decisions and personal circumstances govern asset allocations
With the end of 2017, we can look back over the past nine years and take stock of how the world has fared. Memories of the 2008-2009 Great Recession are still quite vivid for some, but for many more, enough time has passed that fear has yielded to participation in the bull market.
- Act provides for lower tax rates compared to the earlier code
- No changes to capital gains and dividend tax rates
- Higher standard deduction will limit itemization for many filers
- State and Local property tax deduction capped at $10,000
- Increased gift limit to $15,000 and estate tax exemption doubled to $11.2 million
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act of 2017 (TCJA) into law. Most provisions of this legislation became effective as of January 1st , and will remain in place for seven years, until midnight, December 31, 2025.
- Bitcoin’s use as medium of exchange is growing, but limited
- Bitcoin is a speculative trading vehicle which we do not recommend purchasing since it’s impossible to value
- Cryptocurrencies and blockchain are in the early stages of development and could revolutionize finance
Bitcoin is a digital currency that was developed as an alternative to government-backed currencies such as the US Dollar, Euro and Japanese Yen. The currency was created by a dedicated cadre of computer programmers to reduce the frictional costs associated with moving money between parties by creating an ingenious verification mechanism.
In our 2Q 2017 quarterly commentary, we highlighted what we saw as a “Goldilocks” environment: a belief that a buoyant stock market could continue to be reinforced by a US economy with just the right balance between modest GDP growth and surprisingly tame inflation. Our thinking was: ‘This could go on a while.’ In the third quarter, it did. The S&P 500’s +4% return exceeded even optimistic expectations.
Recent news broke regarding another college sports scandal. The FBI and Department of Justice have been investigating an intricate web of payoffs and bribes in college basketball that has already led to the firing of Louisville’s Rick Pitino, the only coach to win a national basketball championship with two schools.
We manage portfolios for other investment advisors and consultants in addition to individuals, families and trustees. A bank recently interviewed us to manage international stocks for their clients. The process, known as “due diligence,’ consists of statistical reviews along with manager interviews. Our performance statistics are available through databases such as Morningstar which compiles returns from numerous investment managers.