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2017: A Year in Returns

January 3, 2018

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Jon

The asset tables are officially updated with the total returns for 2017. Before we get to the numbers, I made a few changes to two of the tables.

When I originally made the tables, I purposely limited the international and emerging market tables to the 12 biggest countries by market cap. It was cleaner, easier to manage, and fit on most screens. It also left out about half the countries in the MSCI EAFE and EM indexes.

So it was time for a makeover.

I remade both tables over the holiday break to include every country in the index – with a new color scheme – with data for the past 15 years. All the countries in the MSCI EAFE are included. Two of the MSCI EM countries didn’t make the cut – Qatar and United Arab Emirates – because neither has 15 years of data. Continue Reading…
Happy Hour: Thoughts on 2017. Looking Ahead to 2018

December 15, 2017

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Jon

2017 has been a ho-hum year for the markets. Yes, returns were great all around. A quick glance at Morningstar’s Index Performance shows a sea of green YTD. But…

The juxtaposition of a volatile political environment and a carefree market best sums up 2017. If you ever wanted proof that markets are apolitical, this was it. I’ll spare you my political hot take (I’m way too cynical anyway).

The markets, however, are open season.

Barring some cataclysmic event, 2017 will go down as the least volatile year in market history. And the market will end the year very positive – the S&P 500 is up 21% so far (international and emerging markets stocks saw an equally great year). Continue Reading…
What I Learned from the Most Popular Posts of 2017

December 13, 2017

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Jon

Every year I’m surprised by the posts that get traction and those that don’t. What I think is interesting and spend a lot of time on, can fall flat while something that seems like an afterthought, gets shared everywhere. I doubt I’ll ever figure it out, but I do appreciate it when it happens. So thank you for reading…and sharing.

Like last year, I dedicated most of 2017 to sharing what I dug up and read in books, articles, and interviews of some of the brighter minds in finance.

So what was read the most?

It’s no surprise that articles on the most recognizable investor’s today were the most popular. The lessons from those posts revolve around decision making. Continue Reading…
Happy Hour: Market Outlook

December 8, 2017

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Jon

With 2017 coming to a close, the forecast machine is working overtime predicting what will happen next year. “The wackier the better” is how the game works because it draws the biggest headlines.

Unfortunately, these people sound sincere, educated, and expert-y, so we’re more apt to believe them.

Don’t.

A magic eight ball is about as useful as the people spewing these predictions. So take it all with a heaping pile of salt. Like the magic eight ball, view it as purely entertainment.

The exception is the outlook reports looking beyond 2018 that take a long-term probabilistic approach. Vanguard – which does a better job than most – released their outlook this week. Continue Reading…
Lessons from Keynes’s National Mutual Speeches

December 6, 2017

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Jon

I’ve been reading through the annual meeting speeches John Maynard Keynes made during his tenure at National Mutual Life Assurance Society. Several things stood out like his views on the U.S. leading up to and after the ’29 crash or his hot takes on the global economy and how to fix the issues of the time.

Another thing that stood out was how things have not changed much over the years. Sure, it’s easier to invest. It’s cheaper. We have more choices.

But the issues he dealt with and decisions he made are no different than today: things like stocks or bonds, home or foreign, short or long term, and more. And his thoughts on some of those issues are no different than what other great investors repeat all the time: Continue Reading…
Happy Hour: Keynes’s Lesson from ’29

December 1, 2017

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Jon

Right from the start, Keynes allocated more money to stocks. That was his first big move as Chairman of National Mutual.

For an insurance company at the time, it was significant. Yet, it was still a small portion of the total funds. The average insurance company at the time held about a 4% allocation to stocks. Keynes bumped it closer to 20%.

And it paid off.

Returns averaged more than 7% after tax from ’21 to ’28. The return on the stock portion exceeded that amount over the same period.

In fact, it worked so well that Keynes offered an annual warning about not expecting consistently good returns year after year: Continue Reading…

2017: A Year in Returns

Happy Hour: Thoughts on 2017. Looking Ahead to 2018

What I Learned from the Most Popular Posts of 2017

Happy Hour: Market Outlook

Lessons from Keynes’s National Mutual Speeches

Happy Hour: Keynes’s Lesson from ’29