It is Not Market Timing

Market returns are typically measured from January 1st to December 31st. Although this is short term it allows decisions about future performance to include information from historical trends. When looked at in this manner the 1st quarter returns are equivalent to a good year; especially when expectations for 2013 were around 7.5%. However, the average current P/E ratio is near historic levels and most experts believe that markets have yet to reach over exuberation points.

The emotional connection between market returns and investor behavior is often talked about and hard to delink. Most people have heard that investors trade on fear and greed, or the markets can stay irrational longer than investors can stay solvent but think they are different. Unfortunately the recent inflow of money into funds similar to ETF’s that are traditionally associated with retail trading proves otherwise.

We attempt to limit emotional biases by imputing economic and market data into a process that was formed in academia and refined through experience across market cycles. Sticking to this process that considers diversity a central theme allows portfolios to be managed for the long term while eliminating some of the costs related to short term market timing strategies.

After all, our partnership is meant to create more enjoyable moments that span generations.

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