Another Cliché Year End Blog?

I debated with myself for a little while if it was too cliché to write a blog about the end of the year?  I decided that it was, but I’m doing it anyway…

2013 was a great year for the US markets, but not a great year for a diversified portfolio.  The news media will “squawk” about diversification being dead and that you don’t need it, but all trends revert to the mean and diversification will become important again when you need it most.

 I recommend using the year end to re-evaluate your goals.  To see if you are on track, comfortable with your allocation and the amount of risk you are taking on.  Take a few minutes to be mindful of what we have.  Odds are that if you are reading this there are lots of things to be thankful for.

During the year, one chapter closed and another began.  2013 marked the start of Boon Capital Advisors and 2014 will be about expansion, growing and deepening client relationships.  This has been an amazing year in many ways and I want to thank my family, clients, advisors and friends for all of your support.  Thanks to all of you, I am very excited about the future of Boon Capital Advisors.

 

Merry Christmas and a Happy New Year!

Too Much of the Bubbly!

It’s officially Holiday season and I am looking forward to celebrating with Family and Friends.  I may enjoy a libation over the Holidays, but that is the only thing Bubbly I am worried about at the moment.

As the major indices climbed through Dow 16,000, S&P 1800 and Nasdaq 4000 there has been a significant increase in the talk of a market bubble.  Granted I can accept the argument that the market may be fully valued or even expensive depending on some metrics, but I disagree with the bubble talk.

I believe that Investor Psychology is as much a part of a bubble as extended prices.  Think back to the Tech Bubble or the Housing Bubble.  In both cases, investors felt that they couldn’t lose regardless of the price.  There was broad group think and market talk was pervasive.  Remember when Taxi drivers were offering unsolicited market advice?

Chart courtesy of @Ryknow

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The markets have had a long period without a substantial pullback or correction, but I don’t think we have entered the mania phase typical of bubbles shown above.  Valuation should always be a constant when evaluating the markets, but so should investor psychology.  I think that your average investor* is far from Euphoric about this market. 

So for now, hopefully the only Bubble you are worried about is the one you will be pouring in your glass this season.

Happy Holidays!

*According to Gallup's annual Economics Personal Finance survey, which was conducted in April, just 52% of Americans are personally or jointly with a spouse invested in the stock market. This is the lowest level since at least 1998.

 

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