All Posts By

Sam Bass Jr.

What Are the Markets Telling Us?

By | The Friday Brief | No Comments

Markets are in a tizzy (a state of nervous excitement or agitation). Investors are asking, is the party over, is the bull market ending or are we just taking a pause? The latest volatility has been set off by ‘tariff-tweets,’ Fed talk, economic data, and the arrest of a Chinese CEO during trade talks. As global markets are mind-numbingly complex, the answer is definitely all of the above, and a lot more. But market catalysts pop and fizzle with short lives, the more important questions are what do the signs tell us will happen in the mid-term and the long-term

Read More

Investment Efficiency

By | The Friday Brief | No Comments

Efficiency measures what is produced against the inputs required to produce it. Efficiency is generally reduced by some form of drag, such as friction, cost, energy, or time, but there can be great reward in improving efficiency. An investment portfolio produces greater wealth as the friction of expenses, taxes, and under-performance relative to markets are reduced. While the most efficient way to achieve the returns of a particular market is to own that market. The most practical way of doing that is through the use of an Exchange Traded Fund or ETF. We use the VTI offered by Vanguard to efficiently

Read More

Hurricanes and Market Turbulence

By | The Friday Brief | No Comments

The last ten years of fair-weather markets have spoiled us a bit, but storms do come, and they can be ferocious. Just as Hurricane Michael came out of nowhere, so did a stock-selling spree that shaved more than 5% from the S&P 500. We are once again reminded that stock markets do not move in straight lines, and that emotions often get the better of investors. The US economy is strong. Corporate earnings have grown more than 20% for the past two quarters and are on pace to do the same for the third quarter of this year. Unemployment at

Read More

What Are Your Priorities?

By | The Friday Brief | No Comments

One of the most important exercises in financial planning is laying out your priorities. A priority list and its order provide necessary guidance as to how we should best go about achieving our goals, and which ones are more important than others. The exercise is made all the more challenging in that we actually have two sets of priorities in our lives: Aspirational Priorities – those that we list when talking to our financial advisor or sharing with friends, and Confirmed Priorities – those actually reflected in our spending. The first represents our hopes and ideals, while the second confirms in

Read More

The Cone of Uncertainty

By | The Friday Brief | One Comment

As Hurricane Florence continues endangering lives and destroying property, many of us wait in uncertainty, wondering how homes, boats, and treasured landmarks are faring. It’s personal and emotional kind of uncertainty, the kind that can’t be addressed by probabilities. But on the statistical side, the National Weather service could not have done a better job of predicting the path of Hurricane Florence, despite the  challenges of several high and low pressure systems, two tropical storms and three hurricanes in the region, each with their own degrees of uncertainty. The image below depicts the cone of uncertainty six days ago. The accuracy has

Read More

The Right Tools and Experience

By | The Friday Brief | No Comments

One of the joys of having our office at Five Points is the endless opportunity it provides to meet colorful people. Yesterday provided another one. About closing time, I heard some discussing the scene in our front parking as they headed out the door. Seems there was a guy with a flat tire, trunk open, busily tossing out stuff to uncover his spare and creating what looked like a yard sale of hunting and fishing equipment around his car. A few minutes later, when everyone was gone and the office was quiet, I wrapped up from my day and started

Read More

Inflation, the Fed, and Markets

By | The Friday Brief | No Comments

President Trump weighed in yesterday on one of the last truly apolitical federal institutions; the Federal Reserve. He bemoaned the possibility that their recent interest rate increases might derail his attempts to improve economic growth to what he believes is closer to its true potential – 3% and higher. However, the economists of the Federal Reserve believe that an economy picking up steam or one growing too fast will cause inflation to rise above their stated targets of 2% for inflation. The argument pits politics against policy as presidents win or lose on the strength of the economy during their

Read More

The Second Quarter of 2018

By | The Friday Brief | No Comments

The economy continues to plow ahead, despite the threat of trade wars and uncertainty of US trade status on this continent, Europe and Asia. For the year so far, stocks as measured by the S&P 500 and the Vanguard Total US Market index are up 4.7% and 6.3%, respectively. All of that return has come in the second quarter, which is the topic of today’s Brief. Possibility of an all-out global trade war and the threat of regulatory risks of technology companies, like Facebook and Google, drove the market down during the first quarter. But a meeting between President Trump and

Read More

Declare Your Independence from the Pitfalls of Aging

By | The Friday Brief | No Comments

We just celebrated our 242nd year of independence from the tyranny of King George’s taxes, tariffs, and regulations. A brave few representatives from thirteen British colonies signed their names to a document that would have resulted in their deaths as traitors to the Crown should their cause have failed. The document, our Declaration of Independence, begins with a sentence that reflects a level of passion and resolve that resonates deeply in our souls and indeed with all who hear it. We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator

Read More

Planning and Social Security

By | The Friday Brief | No Comments

This year, some 45.5 million Americans will receive $63 billion in retirement benefits, according to the Social Security Administration. Of these recipients 65 years or older, 50% of married couples and 71% of unmarried persons depend on Social Security for more than 50% of their income. Indeed, all of our clients’ plans depend, to some degree, on Social Security for future or continued funding of their retirement needs. According to the latest Board of Trustees report released in July of 2017, if nothing is done to address the problems, the Social Security Trust Fund will be exhausted in 16 years. To be

Read More