A Time for Resolve
To be grateful for family and friends
To view health as the greatest blessing and to strive to live in more wholesome ways
Seek patience and calm in the face of challenge
Push for discipline and persistence in the pursuit of projects and goals
Recognize giving as the most important act, and embrace the rewards that charity will bring
Calm and serenity is the ultimate goal, to be sought one minute at a time
Always bring a sense of humor to make everything better
As a year ends on the calendar, and new digits need to be learned, we all want to take time to look for new resolutions to make our lives better. How can this tradition yield real results?
“In the absence of certainty, the simplest answer is often the best; the fewer assumptions that are made, the better. See Occam’s razor http://www.britannica.com/EBchecked/topic/424706/Occams-razor
This may be the most important. Let life be simple. Embrace our opportunities in life as much as we can. Take each moment as it comes and remember that the good parts of life are never promised or guaranteed. We must always immerse ourselves in the positive that we have and drive out the negative.
I am so very grateful to be here writing to you and I hope that we can share time and thoughts together as we enter the new year 2015.
The market is closing out 2014 on a very strong uptrend. For a complete recap please see
http://www.bloomberg.com/markets/
The end of Fed bond buying earlier this year has not ended the low interest rates that are relentlessly pushing money into equity and real estate investments. Oil prices have had a 49% price decline in one of the most dramatic moves in many years. This energy price decline has happened in the face of rising economic activity in the US. This price move is really a paradigm shift that may buffer a potential inflation trigger and allow the Fed to keep lower rates for longer than the markets expect.
Persistent low interest rates and the new dynamic of low energy prices are literally fueling economic growth here in the US in a major way. Europe should eventually see many benefits to a global energy price decline that could help the laggards like Spain and Italy exit their long term economic malaise.
It is that time of year that brings lots of talk about what the New Year will bring. These predictive efforts are like any other in that they are of little use. 2015 will bring the same uncertainty that any year can bring, although people who are paid to talk will get to work commenting on how “uncertain” things now are as if future markets have been or will ever be “certain”.
Carl Richards is one of my favorites and he has written about our yearning for certainty recently.
His piece regarding how we think about the world is so very important to be mindful of. The only thing that can be known is that the future is not to be predicted. Ever. We must steel ourselves in the preparation of the unexpected and sometimes scary things that will confront our families and ourselves in the future. This is a way of thinking that needs to be practiced constantly, for the world will test us at the most inconvenient time.
Gratitude, simplicity, and acceptance of uncertainty are great states of mind to strive for in 2015. An approach that does not seek flash or grandiosity is something that I am most comfortable with. Good ideas are something that we can hold onto for generations of time. Quality advice does not change as the calendar turns. Great results are built with the same ingredients that we consistently discuss: discipline, patience and calm understanding of economic history when markets are falling.
Our instincts contain a natural desire for excitement and novelty. This does not help the cause of long term investment results. It is easy to observe the products invented by the food, auto, housing, medical and so many other industries that are placed before us in order to entice and generate spending that is often unnecessary. Seeking new and exciting ideas for investment can be particularly costly.
The challenge for the market now is that higher prices simply bring more risk. As we enjoy the appreciation of asset prices and the rising balance of our portfolios, the need for a pause rises. Higher prices are driven by greater profits, but that are also generated by supply and demand for equites. The demand of buyers in the market eventually is sated. Buyer fatigue will then set in and prices will plateau or decline. This is a certainty and needs to be accepted by our long term mindset.