The Easy Money’s Already Been Made

I used to catch myself saying this ridiculous phrase all the time. Whenever an opportunity had passed, I’d drop this in conversation like the future was abundantly apparent, or only a fool couldn’t have seen how great an opportunity it was. Yesterday the S&P 500 closed at 2805, and unless something drastic happens tomorrow, it will be a stellar first quarter from an investment return standpoint.  Not to throw a wet blanket on a great quarter (or conversely put lipstick on a pig of a Q4 from 2018), but the closing price on January 17th, 2018 (yes over 14 months ago) was 2807. In the last 14 months, the S&P 500 is down 2 points. If any of you watch CNBC, one of my all-time favorite curmudgeons, Art Cashin, is fond of saying, “today was a waste of a clean shirt and cab fare”.  As I look at long-term price charts, not much has changed.

Coming to the realization that we’re in a sideways market should temper your expectations, but more importantly, you should realize that the lack of meaningful price movement over an extended period of time allows the market to catch its breath and sow the seeds for the next advance.  Of course, no one knows whether we will have a decline first.  Also, being down 10% last December sure felt meaningful, didn’t it?  But it wasn’t.  It was a normal ebb and flow that you are required to tolerate, in exchange for the eventual payoff of higher future returns.

We don’t do victory laps around here by patting ourselves on the back when we’re right about staying the course during this last market spasm. That’s because there is no easy money. It’s never easy, it never has been, and it never will be.

– Adam

Diversification Isn’t Sexy – Blair Duquesnay of Ritholtz Wealth Management writes about what diversification is NOT, and the advancements over the last 20-30 years in the investment management industry.

We All Make Mistakes – “We all make mistakes.  The trick is to make them when they matter the least.”

“If you keep investing simple and make it understandable, you’ll lose half your audience, who assume success lies in their own befuddlement” – Jonathan Clements.

“The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.” – Bertrand Russell (I’m positive this one is right…)