The Northern Star Newsletter 7/25/19 - Stocks Descend from Recent Peaks
Message from Jon
We are at high's in the DOW, the S&P 500, and the NASDAQ. We have a FED that is looking to make a 0.25% rate cut and there's an earnings season underway—things seem to be looking positive so far.1,2 All in all, steady as she goes.
I was reading an article on Ray Dalio's Alpha Fund, one of the world's largest hedge funds, and it was -4.9% 2019 to June, and remember someone telling me early in my career that 100% of money managers underperform their respective benchmark at least once in their tenure.3 Warren Buffett's Berkshire Hathaway has even underperformed the S&P 500 for the last decade, and he is often considered the world's greatest investment manager.4
All this goes to show you that not every year will be a good year for 100% of your investments. Some will do better than others, and to have a properly diverse portfolio is to guarantee the market will neither completely destroy your portfolio-but also that you may never see 100% returns either! The best plan is to strategize what your particular needs are, align to the strategy that can currently obtain those needs, but then also monitor, adjust, and realign your portfolio as characteristics and market conditions shift. This explains why during a cyclical bear market condition, a buy and hold approach is not the best approach to take-just like an active managed approach would not be best during a cyclical bull market condition. Preparing to and making shifts is better than benign neglect.
Till we speak again, stay cool!
Stocks Descend from Recent Peaks
WEEKLY UPDATE - JULY 22, 2019
The Week on Wall Street
Stock benchmarks retreated during the first week of the second-quarter earnings season. As some big names shared quarterly results, investors seemed more interested in what might happen at the Federal Reserve's upcoming policy meeting.
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