We like games, but not all games. Some make us tense such as the Hasbro game named Operation. As a child growing up in a warm and nurturing environment, hearing the BUZZ as you touched the side not only scared you, but risked driving you to tears. We believed we could have killed someone if given a plastic scalpel. Jenga is another game that makes us tense. To make it worse, it is not just your actions that could drive to failure. Those players before you place the tower of blocks in an ever more unstable situation. But
The Quarter in Review
The quote used in our 1st quarter report was “It is best to rise from life as from a banquet, neither thirsty nor drunken.” We have been investing in accordance with that quote and maintaining a near fully invested stance yet conscious of the growing optimism witnessed in the world markets.
Global markets, especially equity markets, have continued rising with little performance difference between the major equity classes. Emerging markets have continued their rebound this year and now match, looking back over the past 12 months, the equally impressive performance of smaller US companies. Growth companies have continued
We are strong believers in Peter Lynch’s quote, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections than has been lost in corrections themselves.” Because fearmongering market pundits profess that a correction is always near, we, therefore, continue to rely on Lynch’s statement.
There is no doubt that headlines these days are bad. North Korea becoming more emboldened in its desire to wreak havoc on the world as they defend their reign. The US government breaking new records for partisanship. Civility becoming second to rage in our own communities as extreme elements take to
We are ones to look both ways even when crossing a one-way street. It is ingrained in us to watch for the unexpected. We’re believers in the saying, “It’s the punch you do not see that knocks you out.”
Although we stand in a near fully invested stance at the time of this writing, we are always looking for signals that will change our positioning. Catching our attention at this moment are China’s wealth management products (WMPs). In our last commentary, we briefly highlighted that WMPs may be a potential pain point for the world’s financial markets. We said that the
“Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses while giving disproportionately less consideration to alternative possibilities.” – Wikipedia
The S&P 500 index, a proxy for the US equity market, has risen 6% in the first ten weeks of 2017 and almost 30% from the February lows one year ago. Throughout the run-up, investment pundits have expressed concern that the market was richly valued, citing the historical highs in one measure of equity market valuation.
There are ample reasons to be cautious, but valuation is not high on
One who deceives will always find those who allow themselves to be deceived. – Niccolo Machiavelli
With the heightened focus on world politics, it comes as no surprise that The Prince by Niccolo Machiavelli is seeing a material increase in book sales. We have spent some time reviewing his writings and the centuries of debate surrounding his perceived intentions. His writings are a staple of the current political process and are no less relevant to the corporate world. The constructive elements of his writings, such as, “Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity
We founded Auour Investments in early 2013 and spent the spring and summer building the Auour Regime Model and constructing the investment processes underlying our strategies. In the fall of 2013, we launched the first of the Instinct family of dynamic core strategies: Global Fixed Income in October and Global Equity in December. The growth in assets has been rewarding yet we have had little or no help from the financial markets.
Since the launch of the strategies, the equity markets have experienced a total return of 9.2% over a three-year period[i]. That equates to around 3% per year in equity
For the past 16 years, the world’s population has been living in a test tube. Various experiments have been run on us. Though they were pitched as advancements and were instituted with the best of intentions, the experiments proved themselves to be scientific procedures undertaken to…
make a discovery that a common currency shared between disparate economic systems can produce unequal outcomes.
test the hypothesis that artificially low rates will drive economic growth.
demonstrate a known fact that excessive regulation harms economic growth.
Making a Discovery
The common currency of Europe, the Euro, came into existence in the 1990s and was broadly adopted as a
Regime Based Investing is the next generation of modern money management, leveraging an increased understanding of market psychology and investor behavior. This paper describes the idea and various implementation methods used to protect capital from times of market duress without sacrificing upside participation.
We have expressed our concerns with the bond markets, specifically the negative rates being experienced around the globe as central banks attempt to boost economic activity through low rates. These actions have taken a toll on the increasing number of retirees that had depended on the income from their savings as they have seen the “riskless” government bonds go from 5%+ to less than 1%. It also, from our perspective, has not accomplished the goal of increased economic investment and the recovery to pre-2008 global economic growth. And in recent weeks, we have heard an increasing number of