One of the worst-kept secrets of investing is that if you have a properly diversified portfolio, your return will never be as good as that of the best-performing asset class. Of course, it will also never be as bad as that of the worst-performing, either… There will always be some asset class that does poorly, […]
How to Win a Nobel Prize, Part II
Are you ready for your second graduate level discussion on investing, and how to build a portfolio? We’ll again promise to keep the jargon to a minimum, and to explain academic terms, if we can’t avoid using them. At Springwater, our approach to building investment portfolios for our clients is based on decades of academic […]
How to Win a Nobel Prize, Part I
Are you ready for a graduate level discussion on investing, and how to build a portfolio? We promise to keep the jargon to a minimum, and to explain academic terms, if we can’t avoid using them. At Springwater, our approach to building investment portfolios for our clients is based on decades of academic research. That […]
Why is My Portfolio’s Asset Allocation so Important?
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 […]