timeless principles

2021 Market Forecast

photo shows hands around a glowing blue crystal ball

It is that time of year! Prognosticators and pundits issue their forecasts for the year ahead. Wouldn’t it be nice to know what the future holds? Some forecasts are hedged and don’t really say much. Our prediction is quite specific.

For those who have visited our offices, you know that we actually do have a crystal ball. It forecasts the direction of the stock market for the coming year. It does not say how far the market will go, but it always predicts the direction.

If you knew which way the stock market was going to go, could you make money investing?

Here’s the catch: our crystal ball has only been 74% accurate. So perhaps the question should be, “If you knew which way the stock market was going to go 74% of the time, could you make money investing?”

Without further ado, here is what our crystal ball says about the direction of the stock market for the year beginning January 1: it will go up.

Long-time observers will not be surprised. The crystal ball always says the market is going up. It has never predicted a down year. And checking back over the past hundred years, according to Standard & Poor’s, it has been right 74% of the time.

We don’t know how well its track record will hold up, but we believe this presents a favorable backdrop to buy bargains, avoid stampedes in the markets, and seek to own the orchard for the fruit crop. In other words, to keep on keeping on, following our principles and plans and strategies. And remember the long haul sets its sights beyond the coming year.

It is tempting here to include a discussion of the economy, the strengths and weaknesses we perceive. We’ll leave that to people with more time on their hands. If your plans are evolving and deserve some attention in the new year, please email us or call.

Cheers to 2021, friends.


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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes.

Investing involves risks including possible loss of principal. All performance referenced is historical and is no guarantee of future results.

Any economic forecasts set forth may not develop as predicted and are subject to change.

The 3% Solution

photo shows a red basket full of red apples in the grass

Finding potential bargains is one of the hidden joys of stock market disruptions. (And seeking bargains is a core principle for us!) Sometimes, economic setbacks affect the value of enterprises that are actually quite durable, companies that will probably survive and ultimately prosper.

We noted a few months ago that bargains had emerged among those providers of basics—like food, clothing, and shelter—and that we were likely to still need these things in the future.

Now we are noticing another benefit to some of these prospects.

Dividend yields in the 3% range in name brand companies, although not guaranteed, offer the opportunity for actual recurring investment income. You know another one of our core principles is owning the orchard for the fruit crop. Well, a share of ownership in a profitable enterprise, when some of those profits are distributed as dividends to the owners, can be like owning an orchard.

While the value of the orchard (or the ownership share) will fluctuate, the crop (or the dividend) may be a sufficient reason to simply own it.

Why are we mentioning this now? Income-producing investments may be a way to offset the twin Federal Reserve policies of near-zero interest rates combined with the intent to raise the cost of living by 2% per year. (Officials speak of wanting to “hit a 2% inflation target,” but that is just another way to say “increase in the cost of living.”) When savings is earning less than the inflation rate, purchasing power erodes day by day.

Let’s keep our eyes open.

Clients, if you would like to talk about options for your cash or any other portfolio issue, please email us or call.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.


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Our Work With You

© Can Stock Photo / gajdamak

One of the blessings of a periodic travel day is time to think. My thoughts about our work together recently crystallized at 40,000 feet in the air. The guts of our business may be captured in a single sentence:

People who know us believe we are worthy of helping them manage some part of their net worth.

This thought has three distinct facets.

1. “People who know us” highlights the key role of communicating our principles and values. Who are we? What are we doing? Why are we doing it?

2. To determine if “we are worthy” of helping you, it helps if you can get a feeling for our competence and consistency. Whether we are focused on your results or ours is a key thing, too.

3. “Net worth” figures into our work. We strive to help you two ways, by investing effectively and helping you frame major financial issues so you can make effective decisions. The better off you are, the better off we will be.

It seems to us that this concept of the financial advisory business is timeless, has always been true. Yet our experience with 21st century communications over the past few years says each facet is powerfully improved by the new methods.

People get to know us much more quickly by reading our blogs and seeing the videos. What makes us tick? What are we focused on? Are we paying attention to business? Do we care about our clients? This digital presence makes it easier for you to form an opinion about our worthiness to work with you.

Apart from all that, we know that communication can help drive understanding and attitudes about effective investing behavior. Although some do not need it, others may benefit from the perspective and context we provide. If we are successful in promoting effective investment behavior, we may be helping people build their net worth over time.

It feels invigorating to be using 21st century methods to do business according to timeless principles. Clients, if you would like to talk about this or anything else, please email us or call.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.