It’s crunch time in the Elevate offices. Jacob and I are in the final stages of preparation for the third and final level of the Chartered Financial Analyst® (CFA®) exam.

After a 10-year economic expansion... a humongous expansion of debt (far in excess of GDP growth)... and after stocks have gone higher and higher and higher for what seems like forever... the stage is set for what my colleague Steve Sjuggerud calls the "Melt Up."

As the name implies, the Money Weighted Return weighs returns based on how much (or how little) money was in the account at the time the return was generated. What this means to the investor is simply – the MWR answers the question “how am I doing toward my goals?”. This is the number that you would use to gauge your position in relation to your long-term goals.

What’s in a number? If a picture is worth a thousand words can a number be worth an exponential amount of that thousand? Dare I answer with a resounding “yep!”.

Quarter one of 2019 is in the books. The markets got off to a great start this year, but most of the return came in the first 2 months.

Even when an analysis is based on fraudulent financial reports - the trailing stop is the investors last line of defense.

The Fed deciding not to increase rates, and instead to “be patient” is another way of saying they have zero confidence in our economy’s ability to handle rates at even 3% for 10 years – which is incredibly bearish.

It’s so bearish that the market loves it. The market loves easy money. Many market participants (and people in general) fail to look at the second order effects and instead focus only on the first order effects of a decision.

In February, markets continued to power higher with the S&P 500 Index (SPX) up 2.97% bringing the year-to-date return to 11.08% through the end of the month. At this rate – the market should be up 66.48% this year, right? I think this is an unlikely outcome but it sure is fun to extrapolate.

Happy Birthday Grams!

The stock market has continued to run higher and higher, seemingly without a breather of any kind. We are witnessing one of the sharpest v-shaped recoveries that markets have ever seen – and as we know from experience – things that can’t go on forever, won’t. And the kicker is that since falling nearly 20% to end 2018, not only have the markets still not made a new all-time high, they still haven’t even made a higher high.

On the bright side, we did finally see prices close solidly above the 200-day moving average (for the S&P 500), signaling a possible resumption of the long-term up-trend.

We have continued to cautiously allocate capital over the past couple weeks. I still don’t see the odds as being in our favor for a quick return to new all-time-highs.

Markets have rallied to start the year with tax-loss selling having run its course and a lot of value being found by stock screening programs. You see, if the market price has come down but the projected earnings have not yet been updated, a given stock will appear relatively cheaper than it used to. But this is fool’s gold if it turns out that the earnings are later revised lower on a forward basis.

I thought I was going to be able to open this post with a line about “what a difference a year makes”, instead, I think it should be “what a difference a couple of weeks makes…”

Last week we discussed the tax benefits of evaluating your investment portfolio before 12/31 rolls around.  This week we’ll have a look at another critically important topic, your Estate Plan.

1931 was the last time stocks had this bad of a start to December - and that doesn’t include yesterday’s drop of around 1.5% which came after being up as much as 1%, early in the day. For anyone who thought that the Federal Reserve Chairman, Jerome Powell was going to come the rescue of falling markets and deliver a Santa Claus Rally, they were mistaken.

Most of us hate taking losses. In fact, studies show people dislike taking losses twice as much as they enjoy taking gains. However, refusing to take losses and holding onto losing positions can be disastrous to your financial health. 

Our portfolios are weathering the storm as well as could be expected due to having set aside cash across the board in September and adding to it throughout October and November. We have been getting increasingly cautious all year long – which has served our clients well.

After being down nearly 2% today with all 11 sectors being negative, the S&P 500 has now joined the rest of the world in the red for the year 2018. On top of that, bonds are also down – and so is gold, real estate and even Bitcoin. There is nowhere to hide.