Smart investors recognize the importance of owning investments that don’t move in lock-step with each other, but rather perform differently over time. Why? Because over time, we expect the stock market to increase in value, albeit with short-term, occasionally severe, fluctuations. So, ideally, we would like to own an investment that increases in value when […]
Should I Invest in Individual Bonds or Bond Funds?
Last week we talked about the role of bonds in your portfolio. We noted that, while bonds generate income and may generate capital gains (when interest rates decrease, the value of a bond will increase), the primary role of bonds in your portfolio is to dampen the portfolio’s volatility (i.e. reduce the variability of its […]
Happy New Year, from the Flight Deck
Happy New Year, Ladies and Gentlemen. This is your flight crew speaking again. We hope you enjoyed the holidays. You undoubtedly noticed the turbulence in December. While we were not surprised by it, we understand that it was not a pleasant experience for you. Some pretty amazing things happened last year, and in particular last […]
The Pull Back
Well, that was a bit unnerving. Last week the stock market took a pretty good dive and investors were shaken alert. The drop, as measured by the Dow Jones Industrial Average, was about 1,300 points or 5%. That qualifies as an official “pull back.” The market quickly stabilized and closed Friday with a modest gain. […]
A Bear Lurks Ahead
If you have ever gone hiking or backpacking in a remote wilderness, the thought probably wasn’t far from your mind. An encounter with one might be exciting, but possibly dangerous or even deadly. A bear. The US stock market reached another major milestone on Friday, when the S&P 500 index closed at another all-time high […]
C.R.A.D.L.E. your investments
Since second quarter performance results were made available last week, we’ve received a few inquiries from clients asking about investment returns. Some have been surprised at the returns since the beginning of the year. These inquiries provide an opportunity to review Springwater’s investment management philosophy. At Springwater, we have been students of investing for several […]
Floating Rate Bonds and Rising Interest Rates
A few weeks ago, we discussed interest rates, the 10-Year Treasury Notes and short-term bonds. We briefly mentioned floating rate bonds, a subject to which we return today. To review, in a rising interest rate environment, bonds will lose value. Why? Investors want the best yield possible. If interest rates are rising, investors interested in […]
Be Careful with Your Company’s Stock
Imagine that someone has worked for forty years for a company, and is retiring with a pension and shares of stock in that company. If you are among the majority of Americans who do not have a company pension, you might find this scenario rather appealing. But, if that employer were 125-year old General Electric, […]
Investing, Uncertainty, Risk and Staying in Your Seat
“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly […]
What is “Home Country Bias” in investing?
Every day we enjoy the benefits of an interconnected world. We might start our day with a cup of coffee that originated in South America, check our email on a smartphone designed in California and manufactured in Taiwan, then shower and change into clothes woven from Egyptian fabrics before driving a German-made car or riding […]