Jeremy Grantham’s Market Update

GMO’s Jeremy Grantham predicts that in five years the U.S. market may be 20% lower but that due to a “series of advances and retreats” rather than due to a sharp crash. This according to a recent article in The Economist. The article reports that Grantham, who is known for his caution regarding long-term returns, “caused a stir earlier this year when he said the chances were high of a melt-up in the markets this… Read More

Some Ideas for Investing in a Low Return Environment

There is a very strong likelihood that returns for investors over the next decade will be significantly lower than what we have seen in the past ten years. With the trailing ten-year return of the S&P 500 at around 10% and the ten-year return of a 50-50 stock and bond portfolio at a little less than 7%, investors have become accustomed to above average returns. But long-term data indicates that these ultra-strong returns are very… Read More

Carlson of Ritholtz Says Investors Should Look Long-Term

With the inauguration ink still damp, investors might be trying to predict what Trump’s first 100 days will have in store. In a recent Bloomberg article, Ben Carlson of Ritzholtz Wealth Management writes, “Intelligent investors, however, understand that the long-term is the only time horizon that matters.” One of the best ways to look ahead, according to Carlson, is by “setting reasonable expectations.” To do so, he writes, investors should lower their expectations for future… Read More

Hulbert: Don’t Chase the Winners

 At a time when investors are inundated with the “best of” performance rankings for 2016, a recent MarketWatch article by Mark Hulbert advises against chasing the winners. The best thing to do, he writes, is “sit on your hands.” Hulbert suggests that investors “consider those that were in the top quartile for performance three years ago. Believe it or not, many of them were in the bottom quartile for performance over the last 12 months.”… Read More

A Watched Pot Never Boils — A Lesson in Market Returns

When meeting with clients, Steven Podnos (principal at Florida-based Wealth Care LLC) shared with the Wall Street Journal how he explains the negative impact of emotional decision-making on an investment portfolio. “Over a short period of time,” says Podnos, “you’re almost as likely to have an up market as you are to have a down market. If you can wait five years, then about 90% of the time you’re up in every five-year period. You’re… Read More