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How We Doin' Mini-Crash Edition

Although this latest slide, which started about a month ago in mid-September, isn’t that big of a deal in percentage terms for the U.S. market, both the speed of the drop as well as bigger drops in hot growth stocks are scaring investors lulled into a false sense of security by a market with few down interruptions in recent years.

September 2014 Performance Review

September was a down month all around, except for those who are aggressively shorting. Although we are doing a little of that in our Aggressive portfolio, our modest short allocation didn't generate enough upside to make up for the dual slides in bonds and stocks. 

Trade Alert

Today we sold our two PIMCO funds in our Conservative portfolio (and the majority of our PIMCO fund holdings in our client accounts) and moved into Vanguard Mortgage-Backed Securities ETF (VMBS).

Our Short and Sweet Guide to Interest Rate Armageddon

For some reason, investor fear of rising interest rates gets more press than the brewing tech bubble. Maybe it’s the risk/reward comparison that scares investors. Sure, it won’t be good for Alibaba (BABA) investors coming in at a quarter trillion dollar market cap if earnings growth stagnates,  or Netflix (NFLX) investors buying at ~100 P/E ratios, but those companies could have more than the 3-4% annual gain longer-term investment-grade bond buyers can look forward to if things go well. 

August 2014 Performance Review

It seems the only record left to break is the old high in the NASDAQ, circa March 10th 2000. The tech-heavy benchmark finished that day at a delirious 5,048.62 — a mere 10% rise from today's level. If only Pets.com stuck around long enough to make an app with GPS tracking of your dog food order...

Ups and Downs

As the market continues to erase every pullback in short order, investors are focusing less on downside risk and more on  upside potential. Controlling losses is no longer a priority.  As the markets heat up, investors want a piece of the action. As contrarians, that isn’t our approach, and it shouldn’t be yours, either. Ideally, concern for downside should rise along with the market, just as ensuring you’re positioned for the rebound should be your objective during a long bear market. 

July 2014 Performance Review

Stocks finally took a breather at the end of the month as investor enthusiasm for newer startup and growth stocks may have hit an old economy wall of debt problems in Argentina and political instability in multiple locations. The global stock and bond market can't live on Facebook earnings and iPhone 6 expectations alone. 

The Next Shoe to Drop - Part II

Welcome back, dear readers. As temperatures (and the stock market) continue to rise, it’s time for Part II of our two-part summer beach read about potential causes of the next market drop.

June 2014 Performance Review

The market seems to be moving up on a combination of low interest rates, an economy that isn't quite as weak as feared, and a hot market for smaller growth stocks. 

Waiting for the next shoe to drop – Will It Be a Pump or a Flat?

It's not clear where the next significant slide will come from. We don’t have a broad tech and growth stock bubble like we had in 2000. We don’t have a real estate bubble propping up the economy. Not that you need a reason for the stock market to slide. There's still no consensus as to what caused the crash of 1987, and experts differ on the reasons for the 1929 crash as well as the depth of the economic problems following the slide.