You 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. 

This 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.

After hanging onto gains and fighting back losses for three quarters of the year, the markets lost steam in Q4 and ended 2018 in a volatile stew, producing a negative return of -10.08% for the year (MSCI All Country World Index). Volatility creates fear, often feeding on itself. But don’t lose sight of positive returns for the previous three, five- and ten-year periods, 6.49%, 4.17% and 9.74% respectively for the same index. Here we offer a historical perspective on the benefits of remaining diversified and disciplined in the face of uncertainty. First, a review of 2018 markets.

The disgraced Wall Street investment manager Bernie Madoff wrote the playbook on how to defraud investors. Make investments sound exclusive and special, make the club difficult to join, mingle with the rich and meet their closest friends. Before Madoff’s house of cards collapsed, he stole tens of billions of dollars, escaping SEC attention despite many red flags. Madoff was a fraud, pure and simple. But what about those high-rolling hedge fund managers who lose millions through completely legal means? This month we look at important safeguards that every investor should understand before chasing high-stakes returns. First, a quick review of November markets.

October was the worst month in six years as global stock prices plummeted. Many investors are now bracing themselves for stormier weather ahead. And yet for all the focus on stocks, bonds could wreak even more havoc. Janet Yellen, former Chair of the US Federal Reserve, recently warned of “systemic risk” in leveraged corporate debt products—risk that would be greatly magnified by an economic downturn. Are we looking at a repeat of 2008, when irresponsible lending practices decimated the global economy? We’ll share insights and advice after a review of October markets.

Lifted by a strong US economy, it was a profitable quarter for global markets, which returned a rewarding 4.28% as measured by the MSCI All Country World Index. But the gap between US stock returns and everywhere else was wide. Absent the 7.08% US return, global markets returned a meager 0.71% against a backdrop of lackluster growth, rising US interest rates, and a stronger dollar. International developed markets returned 1.31%, while emerging markets remained in the red at negative -1.09%. These performance measures may make some investors want to chase higher returns through portfolio reallocation. That’s not a good idea. Sooner or later, the tide will turn, and investors diversifying overseas will be rewarded. We’ll share more about why it’s important to remain diversified after a look at Q3 results.

As the spread between long and short-term Treasuries flattens, three words are stirring fear on Wall Street: inverted yield curve. Is the long economic expansion that began in 2009 nearing its inevitable end? More to the point, how should you respond to worrisome noise about recessions and sinking stock prices? We’ll offer our perspective after a quick look at August market performance. 

Occasionally a cornerstone of one’s investment strategy is called into question. Recently, some pundits have claimed that adequate diversification is no longer possible due to a diminishing number of publicly traded US stocks. Join us for a closer look at this issue—and the hype and fear that surround it—following our July market review.

It’s our nature to compare our performance to others. Clothes, cars, homes, vacations, athletic skill, personal wealth, even our kids—it’s all part of a complex mental calculation that tells us how we stack up. But is there any such thing as a reliable benchmark? In life, certainly not. In investing, the answer also is “no,” as evidenced by substantial tracking error in classic benchmark indices. What’s an investor to do? We’ll share our advice after a review of Q2 markets.

I was a competitive tennis player in high school. For that I can thank my father, who learned to play on the red clay courts in Brooklyn and taught me what he knew. I watched him parlay above-average skills into quite an extraordinary game by learning the fundamentals and playing regular doubles matches with skilled competitors. My own game evolved from his example. So did my approach to investing. More on that after a quick look at May markets.