Call us toll free: 888 332 2238
  • Bonds Versus Bond Funds: A Different Perspective
    Plus October Market Report

    John Gorlow | Nov 14, 2019
    Interest Rates & Bond Prices

    This month our focus is on bonds, specifically the question of whether it’s smarter to invest in individual bonds or in bond mutual funds. Many financial journalists, advisors, and investors question the wisdom of investing in bond mutual funds, especially when interest rates are expected to rise. They gain emotional security in knowing investors can buy and hold an individual bond to maturity and get their money back. What some fail to recognize is that bond mutual funds are merely diversified portfolios of individual bonds, and both are equally exposed to the same market pricing mechanism. The day interest rates go up, individual bonds will fall in value just like bond mutual funds. Truth is, interest rate risk can be immunized with either individual bonds or bond mutual funds as long as the duration of the bond portfolio is appropriately matched to the desired investment horizon. The fact that an investor is able to get principal back at a specific maturity date adds no economic value compared to a bond mutual fund that does not have a specific maturity date. To unpack this story, we cite directly from research, noting sources along the way. This article is long, so we’ve tried to highlight key conclusions. Before we jump in, a quick look at October market performance.

    Read More
  • Zero-Fees Trading: Too Good to be True?
    Plus Third Quarter 2019 Market Report

    John Gorlow | Oct 13, 2019
    Stock Trades Go Free Small

    The S&P 500 delivered a modest increase in the third quarter, helping stocks hold on to their biggest year-to-date gains in more than two decades. The simultaneous rise in safe assets like Treasuries reflects the fact that the most prominent economic narratives today are not optimistic. If you add the bleak surveys of business confidence worldwide, you may decide it’s time to batten down the hatches in preparation for a downturn. But you can't predict the future, and neither can anyone else.

    Meanwhile, in the battle to capture customers, Charles Schwab shook the brokerage industry last week when it said it will cut commissions to zero. Schwab’s move has since been matched by TD Ameritrade, Fidelity and others. We’ll look at benefits and potential concerns of this latest step after a review of Q3 market results.

    Read More
  • August Market Report

    John Gorlow | Sep 10, 2019

    Trading Floor

    It was a volatile month for stocks. Fears about escalating US-China trade tensions sent the Broad US Stock Market Index down 2.50% or more on at least three occasions in August, the most in nearly eight years. Gold prices surged as investors sought a refuge from the selling. The yield on the two-year Treasury Note surpassed that of the ten-year for the first time since 2007. The S&P 500 Index still returned 18.34% YTD, and within a couple percent of July’s record close. 

    Read More
  • Emerging Markets: Hold or Fold?
    Plus July Market Report

    John Gorlow | Aug 16, 2019
    Emerging Markets

    When will Emerging Markets come back to life? Ten years is a long time for buy-and-hold investors to be patient, especially when comparing the subpar returns of Emerging Markets to the stratospheric gains of the S&P 500 Index over the same decade. The data tell a nuanced global story, punctuated by politics, protectionism, nationalism, trade wars, climate change, and unexpected winners and losers. In our view, the story is far from over. We’ll share our perspective and advice after a look at the July markets.

    Read More
  • Opportunity Funds: Too Good to be True?
    Plus Mid-Year 2019 Market Report

    John Gorlow | Jul 17, 2019
    QOF

    You may have heard about “opportunity zones,” real estate hot spots that are attracting developers, fund managers and investors. Got $1,000,000 in capital gains? You could roll those capital gains into a “Qualified Opportunity Fund (QOF)” to defer or reduce current tax obligations and eliminate future capital gains! One catch: your money has to be tied up for ten years to reap the full benefits. Also, there’s no guarantee that your $1,000,000 investment will make a dime. We’ll look at the benefits and potential perils of this latest real estate investment craze after a review of Q2 market results. 

    Read More
  • Chasing Yield in a Shady Market
    Plus May Market Report

    John Gorlow | Jun 11, 2019
    Collateralized_Loans

    “Ticking time bomb.” “Marginal, non-creditworthy borrowers.” “Vulnerable to runs.” “Huge deterioration in standards.” You may have been reading the press about Collateralized Loan Obligations (CLOs) over the past few months or year. They are not a new product, but warnings about their risks are on the rise. Are you tempted to invest in these high-yield securities? If so, learn more before jumping in. Our analysis follows a review of May markets. 

    Read More
  • Average Expectations
    Plus April Market Report

    John Gorlow | May 20, 2019
    Quirk in the Calendar

    Tongues were wagging when the Golden State Warriors’ Steph Curry entered Game 6 of the second-round playoffs against the Houston Rockets. Was the star losing his touch? Lately his shooting had been abysmal, despite averaging 27.3 points per game throughout the 2018 – 2019 regular season and 23.5 points over a ten-year career. Even so, fans were shocked when Curry failed to land a single shot in the first half of the game. Then came an astounding second half, when he lit up like a rocket (pardon the pun) to score 33 points, 23 of them in the fourth quarter alone. Herein lies a lesson in trusting the long-term average and ignoring day-to-day fluctuations. It’s good advice for investing, too. Read more after a review of April markets.   

    Read More
  • Throwing Shade on Indexing
    Plus 2019 First Quarter Review

    John Gorlow | Apr 08, 2019
    Building Trust 192x128

    The surging popularity of index funds—and the corresponding exodus from actively managed funds—is a worrisome trend for Wall Street. And so the bankers and brokers and analysts have responded with dire predictions. The warning goes like this: as use of passively managed index investing grows, market prices will become distorted as fewer shares are traded and “price discovery” becomes more difficult. That’s bad news for markets and investors too. Should you be concerned? Let’s look at the evidence after reviewing Q1 quarterly returns.

    Read More
  • Misaligned Expectations
    Plus February Market Review

    John Gorlow | Mar 20, 2019
    MisalignmentYou may have seen recent news reports about financial institutions being chastised by Congress, fined by the SEC, and otherwise called out for various forms of wrongdoing and self-serving behavior. These stories collectively point to an ever-growing misalignment between financial institutions and the people they serve, who rightfully expect to be protected rather than taken advantage of. This month we demonstrate how misalignment occurs, and how Cardiff Park safeguards against it. First, a review of February markets. 

    Read More
  • An Enlightened Approach to Investing
    Plus January Market Report

    John Gorlow | Feb 22, 2019
    FamaFrenchThis month I want to remove the clutter of misassumptions, doubts, and second-guessing about investment returns. I’ll provide an analytical framework for evaluating investment performance in any given year, regardless of market direction. I’ll demonstrate the life-changing value of remaining fully committed to a proven strategy, sticking with trusted fund partners, and choosing a fiduciary advisor like Cardiff Park. My aim is to dial down the financial noise, refocus your attention on vital facts, and free up mind-space for thinking and behaving strategically in order to make more informed investment decisions. First, a look at January markets.
    Read More