During this holiday season, we want to thank you for your friendship and trust in us.  Our best wishes to you for a Merry Christmas and Happy Hanukkah!

 

We follow the U.S. housing market closely because housing is such a significant part of our economy. The big problem for the housing market has been a dearth of inventory.  The supply of existing homes has dried up.  Potential sellers are not willing to buy a new home and be forced into a new high-rate mortgage.  That supply shortage means existing homes are getting historically expensive versus new construction.  The graph below shows they are the highest since 1992 in terms of relative median price.

                                                                      Existing Homes Are Most Expensive vs New Since 1992

Source:  Bespoke Investment Group

The good news is that demand for housing has cooled.  Normalized rent growth will lead to lower rent inflation and help overall core inflation slow.  We can also take heart in the drop mortgage rates have experienced since October.  They have helped applications for home purchases pick up, although until refinancing applications start rising again, we know mortgage rates are still not stimulative.

GET INVESTED.  STAY INVESTED.

We recently joked with clients that the stock market had a good year in November!  November’s gains were both unexpected and large.  The Dow Jones rose over 8% in November, the S&P 500 over 9%, and NASDAQ over 10%.  After a dismal autumn, stocks did an about face and surprised many investors.  It is another lesson why market timing doesn’t work.  Long-term investors cannot afford to miss the good times if they want good long-term performance.  It is best to get invested and stay invested.

Below is a graph of the S&P 500 since 1928 along with key news events.  Sure, the market struggles at times, but has always made new highs in spite of “bad news.”  A wise investor once said:  “Never bet on the end of the world, because it only happens once.”

                                                                             S&P 500 Since 1928 (Log Scale)

Source:  Bespoke Investment Group

The next graph shows that stocks have been the top performer among different asset classes over the last 30 years by a wide margin.  Bottom line:  Never bet against stocks!

                                      Growth of $100 in Various Asset Classes Over the Last 30 Years (1993-Present)

Source:  Various

The strong performance in asset markets in November was not limited to stocks.  Bonds also turned in a historic result with the strongest total return since May of 1985.  The aggregate (multiple maturities) investment grade index was up 4.5% in November.  Bonds across the global economy saw a huge drop in yields overall as every excuse for selling bonds from the summer was swapped for excuses to buy into year-end.

Of course the 60/40 portfolio had an amazing month.  Contrary to some pundits thinking, the 60/40 portfolio is not dead.

 

 

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Real Retirement Solutions

designed to improve
  • Wealth Preservation
  • Management of Risky Assets
  • Peace of Mind

This is achieved through an ongoing assessment of market risks given your specific financial situation and goals.

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Professional Expertise

Leadership Team

Richard Furmanski

Richard Furmanski

CFA

has been a portfolio manager and analyst for over 35 years. He manages conservative, tax-efficient portfolios for both pre-retirees and retirees. His lower risk approach appeals to investors who want less volatility and competitive risk-adjusted returns.

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Mary Ellen Adam

Mary Ellen Adam

Director of Operations

has been in office administration for over twenty years. Her experience includes customer service, firm operations, and office administration. She interacts with our clients on a day-to-day basis and handles any requests that may arise.

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Frequently Asked Questions

If you can't find the answer to your questions here, feel free to give us a call at 847-847-2505

Do you manage both stock and bond portfolios?

Yes. We build a portfolio of conservative, high-quality stocks and hold them for the long-term. The average holding period is 4 – 5 years. Our focus is on stocks that are suitable for retirement portfolios.

Our high-quality bond portfolios are designed to provide both income and stability of principal. Bonds provide the anchor for balanced accounts (those holding both stocks and bonds).

What is your investment philosophy?
We take great care in purchasing only high-quality stocks and bonds intent on a multi-year holding period. Portfolio turnover and taxable realized gains are modest in comparison to other active managers. We do not time the market but will become more defensive, in terms of stock holdings, when market conditions warrant.
Will the portfolio be managed in accordance with my financial goals?
Yes. Each of our clients has a custom-tailored portfolio. These custom portfolios are designed to meet specific client objectives with a thoughtful approach to specific constraints such as risk tolerance. And as each client’s situation changes, the portfolio does as well. There is no cookie cutter approach.
What kind of expertise do you have and how can that help me in difficult markets?
We have been working with high-net-worth clients like you since 1982. Over that time we have helped them to navigate several bear markets and financial crises (including the stock market crash of 1987). We hold the Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP) designations.
Are you sensitive to taxes when managing portfolios?
Yes. Our holding period for an individual stock averages 4 plus years which means our turnover is low and realized gains can be carefully managed. Further, where possible, we tax loss harvest small losses as a way of offsetting gains taken elsewhere in the portfolio.
How have you performed?
Results will differ by client and the level of customization but we have provided competitive investment returns for many years.
How do you charge for your services?
We charge a management or consultant fee based upon the size and level of customization of the account. As the account grows, we benefit together.

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