Financial Planning

A Number Sequence that Explains Market Behavior

In total we have 97 years of S&P500 return data (1926-2022) and the annualized return 1926-2022 is 10.1.  So the last 20 year result of 9.8 is very close to the entire 97 years, and that includes both 2008’s ugly -37.0% return and last year’s uncomfortable -18.1% return.

Reflections on Life, Markets and Economy

Produce your own 2023 “surprises” by improving your health, happiness and financial life in the areas you can control! If we get surprises showing inflation dropping faster, or, if corporate profits and consumers weather the higher interest rate environment better than expected - the market could go up, at least some. Plus the market looks ahead, so if it becomes evident that interest rate cuts are on the horizon, that will also push stocks higher in advance of those cuts.

Active Management Hasn’t Shined in Volatile Markets

A historical analysis of active US-domiciled equity funds finds no meaningful relation between market volatility and managers’ success rates; the implication is that traditional active investments may compound your concerns during times of market uncertainty.