News & Insights

  • One of the Most Important Lessons of Investing: Declining or Lackluster Markets may be Predictive of Gains

    Since 1915 the stock market has gained 10% per year (1). However, those returns aren’t provided to investors equally every year. Instead, some years deliver losses, and others provide low single digit returns. High return years, when the markets move up by 20% or more, occur infrequently but have produced 66% of stock market gains over the past 100 years

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  • Invoking Your Inner Spock

    Over the past 18 months the global stock market has moved lower by 1.4%(i). It gained in 2014, only to lose those gains and more over the past 5 months. Up, down, up, down. What is going on? Investors may look at this activity and question the validity of their investment strategy. Why can’t their investment portfolio produce a reasonable

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  • Time Machine – What if it was 2007, and you knew what was coming?

    I often fantasize about going back in time so I can replay an event more to my advantage. Like curating a response to friends that, after the fact, makes me appear brilliant. Here is an investment time machine fantasy: Imagine this: It’s 2007. You know there is a real estate bubble, and you know there will be a crash, so

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  • The Fed’s “Contracted Experiment in Price Control (i)”

    Just as investors were unable to perceive how a housing market crash would affect their investment portfolios, we believe similar, unanticipated risk exists in the stock market due to Federal Reserve asset price manipulation.

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  • Driving Whilst Looking Backwards

    Want to grasp the counter-intuitive nature of investing? Try driving whilst looking to the rear (see lengthy liability disclosure below). Or, if that seems like a bad idea, carefully consider these probable outcomes: The counter-intuitive nature of investing is both perilous and unrelenting. After markets rise, we “feel” like there are more gains ahead. If gains continue, optimism increases. If

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  • Stock Complacency Arises as Market Risks Intensify

    Stocks and bonds were a mixed bag in the third quarter. The S&P 500 increased 1.1%(i) for the quarter while other asset classes fared poorer. The MSCI EAFE (International) Stock index lost 6.4%, the Russell 2000 was down a painful 7.36%, and the Merrill Lynch High Yield Bond index declined 1.9%. Inflation protected bonds were also down. Toews began the

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  • Stocks Continue Rise in the Second Quarter

    Toews began the quarter with a partial (1/3) allocation to US Stocks, with all other asset classes fully invested. We completed our exit out of US stocks in Mid-April. During the quarter, small cap stocks initially suffered losses while the S&P remained relatively steady. Stocks began to rebound and our system re-entered in late May. We finished the quarter fully

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  • Stocks Hold Significant Risks even at Fair Value

    Investing platitudes (allocate, rebalance, repeat) about stocks betray the high risks and limited time horizons for the bulk of investors. The reason has everything to do with the way we price stocks. Small businesses, not listed on exchanges, sell for low multiples (example: 4 times earnings). But when companies grow and eventually go public, valuations average 15 times earnings. Instead

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