ACTION POINT
CONSIDER INVESTING IN CHINA
China’s economy and markets have reached such a level of size, power, diversity and complexity that it deserves to be treated as a distinct asset class, requiring different investment approaches, as investors have had for years in the U.S. market
BEWARE THE CONSENSUS VIEW
With market volatility is near multi-year lows and investors are becoming much more bullish towards stocks, don’t abandon your insurance policies of cash, treasuries and gold. As WEALTHTRACK guest Andy Lo reminded us recently, it won’t take much of a scare to shake the market up.
CONSIDER PUTTING SOME MONEY INTO HIGH QUALITY COMPANIES WITH A HISTORY OF PAYING AND INCREASING DIVIDENDS
A Morningstar favorite with quality dividends:
Vanguard Dividend Appreciation ETF (VIG)
ASK YOURSELF IF YOU SHOULD BE INVESTED WITH AN ACTIVE MANAGER OR A PASSIVE INDEX FUND
The Underperformance Gap:
- Most investors do substantially worse than the mutual funds they invest in
- Investors sell funds that underperform for 2-3 years
- Investors switch to funds with several years of outperformance
- Sell low/ buy high strategy is sure fire recipe for subpar results
If you can’t tolerate sticking with a manager who isn’t doing well, even if they have a great long term record- then go with a passive index fund. If you are willing to stick with a manager you believe in- stay actively invested.
CONSIDER BUYING A HOME SOONER RATHER THAN LATER IF PLANNING TO BE IN THE MARKET FOR ONE
Until recently waiting to buy a home paid off:
- Prices going down
- Mortgage rates were declining
Exact opposite happening now:
- Home prices and mortgage rates are going up
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