The second quarter of 2019 continued at least a third consecutive quarter of heightened volatility in the equity markets.  In fact, in the month from May 3 to June 3, the S&P 500 declined 7.2%. Remember, the market had just recently shaken off a decline of almost 20% that reached its trough on Christmas Eve, only to rally to a new high on April 23.  Then, in a month, it was down over 7%--only to rally again into positive territory and finish the quarter with a return of over 4%.    READ MORE


Following the rapid pullback in the broad market during the fourth quarter of 2018, which bottomed on Christmas Eve, the first quarter of 2019 saw an almost equally rapid ascension. In fact, by the end of March, the S&P 500 index was almost completely back to the level of its previous high at the end of September 2018, and as of the date of this writing, it has fully surpassed the peak reached last September.    READ MORE



The year that just concluded was perhaps the strangest year we have experienced in our careers. Importantly, it was one of the truly great years in the history of the American economy, and by far the best year since the global financial crisis. Paradoxically, it was also a year in which the equity market could not get out of it own way.    READ MORE

 third QUARTER 2018

Market performance for 2018 continued to be strong through the end of the third quarter. Including dividends, the S&P 500 was up 7.7% during the third quarter, was up 10.5% year-to-date through September 30, 2018, and had a return of 17.9% for the past twelve months.  Those “market” returns can be very misleading, however.    READ MORE


Generally, equities recorded gain in the second quarter and have positive returns for the year through June 30.  As is essentially always the case, the quarter experienced both positive news (continued strond economic growth and corporate fundamentals) and negative headwinds (a political backdrop focused primarily on various trade worries).  However, it seems the majority of teh information provided by the financial media outlets was primarily focused on the negative.    READ MORE

 First QUARTER 2018

Every market commentary we have read addressing the first quarter of 2018 discusses the increased volatility seen during the quarter. In fact, the S&P 500 surged during the first month of 2018, peaking with a 7.5% return through January 26, but only needing nine trading days to drop more than 10% from that high. Then, after “stabilizing” and recovering through the rest of February and much of March, another decline at the end of the month resulted in the first negative return during a calendar quarter for the S&P 500 since 2015.    READ MORE


 fourth QUARTER 2017

With a total return of more than 20% for the S&P 500, and the deepest price decline during the year a mere 3% (versus the average annual decline of 14% since 1980), our philosophy of staying the course was well rewarded in 2017, with a limited amount of volatility. We are, as you know, long-term investors, and we remain positive on the equity market for the coming year. That being said, we cannot imagine returns in 2018 will match 2017, or that volatility will remain as subdued. Equity investing is not often as easy as it was this past year.    READ MORE


Investment performance for 2017 has been strong. At the start of the year, we may not have predicted double digits returns for U.S. and international equities, but this is why we follow the mantra of being invested in all areas of the global economy all the time. The discipline of maintaining a properly diversified portfolio allows the long-term investor to benefit from the “good years” when they happen because they cannot be predicted with any kind of consistent accuracy.    READ MORE


The first half of 2017 was tumultuous, but rewarding, to investors. The dominant topics of discussion and concern continue to be about uncertainty regarding government and monetary policy in Washington D.C. While no one can deny a current level of partisan rancor that exceeds anything witnessed in the past several decades, it does not necessarily mean a death knell for stock - at least not historically. In fact, data shows that stocks have risen much faster during periods when partisan conflict has been elevated.    READ MORE


The so-called “Trump Rally” that began in November following the election continued through much of the first quarter of 2017, as investors anticipated a number of pro-growth changes, including tax cuts, repatriation of overseas corporate profits, the announcement of massive infrastructure spending projects, and the elimination of expensive environmental and financial service regulations. Toward the end of the first quarter, however, investors appeared to waver somewhat in their expectations about the timing and scope of those changes.     READ MORE



 In many ways, 2016 was an interesting year that brought several surprises, a few things we had never seen, and many not witnessed in a long time – a sharp 10% drop in equity prices in the opening weeks of the year, the city of Cleveland winning a major sports championship and almost a second, the Brexit vote, the Chicago Cubs winning the World Series for the first time since 1908, one of the most contentious presidential campaigns in almost 200 years that included both the first nomination of a woman by a major party and the first nomination of someone without political or military experience. Despite the uncertainty regarding policy and politics and the continual pessimism from the media, U.S. large companies were up 12% for the year and small companies increased 21%.   READ MORE


One of our favorite portfolio managers, Bill Nygren of Oakmark Funds, recently penned a letter to shareholders following the 25th anniversary of his flagship, Oakmark Fund, on August 5. When the fund launched in 1991, 60 Minutes was the most watched show on television, newspapers were considered one of the safest and most predictable businesses, and AOL was just beginning to connect early adopters to the Internet. Anyone who invested in the S&P 500 in 1991 when Oakmark Fund was launched would now have more than nine times their original investment.    READ MORE


 It seems that every quarterly Investment Commentary we have sent for the past several quarters, and most of the commentary from industry experts whom we read and respect, has included comments about heightened volatility. The second quarter of 2016 was no exception as the unexpected results of the “Brexit” vote in the United Kingdom resulted in a two day decline beginning on June 24, only to see the markets recover almost completely before the end of the quarter and continue to rise to all-time highs as of the date of this writing.    READ MORE


 Even though the financial media, in an ever-present effort for ratings, would have one believe the volatility and pullback during the first quarter was the beginning of a recession or even the end of the world, the portfolio managers and economic strategists we respect were not surprised by the pullback. Nor do they believe the U.S. economy is on the verge of recession as most leading indicators provide no indication of such an event, and reasonable expectations are for corporate earnings to improve in the second half of 2016.    READ MORE