Refocus 5-1-2020

Please check out this weeks Refocus where we help investors tune out the noise and turn our attention to the long-term perspective needed to maximizing the probability of successful investment outcomes.


Last week, we looked at the long term performance for stocks. This week we'll start out by looking at the dynamics of yearly returns in intra-year declines. I'm a strong proponent of buying assets after large declines in value. I believe the lower the price you pay, the better the risk to reward relationship is. In this graph, we get a look at 40 years of s&p 500 annual returns, with the number on the top of the bar showing the year and total return and the red number below showing the lowest point during the year. We also see that the s&p 500 was positive 30 out of the last 40 years, and that the average entry or decline was almost 14%. Last week, we highlighted the media's constant sensationalism about the point change in the Dow. This week, I'm going to share some thoughts on how the media's inability to add perspective often This is key biases of their Wall Street speakers. In this article, Jeffrey Gunlach of Doubleline, a prominent fixed income asset manager discusses his negative views on the valuation of corporate bonds. reading this would make you naturally feel uncomfortable about your investment portfolios exposure to this investment type. First, I'd highlight two things. One Gunlach runs an active fixed income business, as he constantly has a reason to question index based investing. And second Gunlach is known for his asset and mortgage backed securities expertise, a different fixed income sector. It's also worth looking at the history of gun locks positions on the topic. A quick search shows that he has been outwardly negative on corporate credit, dating back to at least 2018. a billionaire fixed income managers opinion makes great media but I caution anyone consuming this media To use it to make investment decisions. Unless you have a full perspective on who you're getting your information from. You're probably best served trying to ignore information like this.


declines, fixed income, media, week, year, s&p, sensationalism, investment decisions, asset, strong proponent, fixed income asset, perspective, investment portfolios, highlight, annual returns, number, showing, negative, manager, discusses


525 3rd Street, Suite 230

Lake Oswego, Oregon 97034

  • LinkedIn
  • Facebook

2020 BY WEALTHFACTOR a Registered Investment Advisor - All Rights Reserved