Benchmarks, Diversification & Time Horizons – Part 3 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain. If you missed Part 1 or Part 2, start there and come back.

Part 3: Thoughts on time horizons – Define and don’t undermine

In general, the appropriate time horizon for an investor depends on when that investor may need the money. This determination can become quite complicated, depending on specific circumstances, and will likely change over time. It can even differ for various components of an investor’s wealth. For the purposes of this article, we can say that the time horizon for the vast majority of our clients can be measured in many years, and even decades – and in some cases can extend beyond an individual’s lifetime (e.g., with generational transfers). read more…

Benchmarks, Diversification & Time Horizons – Part 2 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain. If you missed Part 1, start there and come back.

Part 2: Thoughts on diversification – Why is it a good thing?

Investors tend to appreciate diversification in bad times, but not so much in good times. Investors like the idea of diversifying to mitigate losses, but don’t like diversification when it suppresses gains. Just look back at 2013 – the S&P 500 was up 32.4%, but any version of a “diversified” portfolio would have gained much less. A balanced benchmark, along the lines of a 50%/50% stock/bond split, was up about 15% (if we just blend the returns of the S&P 500 and the Barclays U.S. Aggregate).

Why should I diversify?” a balanced client may ask. The answer is To control risk and we only need to look back to 2008 for an example. That year, the S&P 500 declined 37%, whereas a 50%/50% balanced benchmark was down only 16%. read more…

Benchmarks, Diversification & Time Horizons – Part 1 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain.

Part 1: Thoughts on benchmarks – What’s the right yardstick for you?

For investors, a benchmark is the yardstick by which to measure the relative success of their investment returns. Broad market indexes, for both stocks and bonds, can serve well to provide a daily status report on how the investment community interprets news and developing trends on the economy, corporate profits and even international geopolitics. And, over time, broad indexes do present appropriate performance standards, which can be used to evaluate an investor’s performance in terms of both achieved return and experienced risk. read more…

Social Security strategies for couples

iStock_000010373589SmallThere are countless articles online on strategies for maximizing your Social Security benefits. Married couples have far more options than singles, and the rules are complex. If you are married and eligible (or almost eligible) for Social Security, it is worth talking to a financial or tax professional to ensure you weigh all of your options. In the meantime, this article from Kiplinger provides a nice primer on two of those available strategies: File and Suspend and Restricting an Application. It’s worth a quick read so you can come prepared to speak intelligently with your advisor, and thereby maximize your probability of a successful outcome.

Leveraged Global Opportunity Fund

In a follow up to a recent blog piece on our TrendWise Investment Program, the Merriman Research Team got together again to discuss our hedge fund, the Leveraged Global Opportunity Fund. Mark Metcalf again hosted Rafael Villagran,  Dennis Tilley, and Alex Golubev for a discussion on how LGO fits into Merriman’s overall investment philosophy.

The Merriman Research Team discusses our TrendWise Investment Program

Recently, our Research Team of Dennis Tilley, Rafael Villagran, and Alex Golubev got together with Financial Advisor Mark Metcalf to discuss our TrendWise Investment Program. Many of the program’s details were covered, including the following:

  • Harnessing market momentum using objective data
  • Rules based trend following
  • Limiting subjective interpretation
  • Dealing with whipsaw trades
  • Small/Value tilt in the program

Enjoy!

Get a free copy of our latest ebook

The Transparent Legacy

Blog Categories

Share This