Too much of anything can be bad. Sometimes, it only takes a spoonful, or even less. In July 2014, the Food & Drug Administration warned about powdered pure caffeine. Usually added to drinks before workouts for an energy boost or to aid weight loss, or as a dietary supplement. It was also used as a study aid among college students. In May of 2014, a high school senior in LaGrange, Ohio died, days before graduation, after consuming one teaspoon of powdered caffeine – the equivalent of drinking 25 cups of coffee or 70 cans of Red Bull. His autopsy found more than 70 micrograms of caffeine per milliliter of blood in his system, more than 20 times that of an average coffee drinker. The difference between a safe and lethal amount of caffeine is very small.Continue reading
“Tragedy or Miracle?” – Nvest Nsights Q4 Newsletter
We are thankful for your continued support and for receiving our guidance and advice on investing and “LIVING LIFE” financial planning during the last year – a year which could either be characterized as a “tragedy” or a “miracle”.
Whatever your perspective, 2020 offered BIG surprise (global pandemic, lockdown; or the financial market response to it all?). In this quarterly newsletter we provide brief articles below which aim to provide context about the year we all just experienced and the reaction of the financial markets; what we are focusing on in the year ahead with the dawn of both a new President and congressional political composition; and ponder what unexpected developments might occur.
Our personal finance article this quarter, “Light Bulbs Reveal a Better Idea“, discusses how helpful a big-picture view of your financial position is when the market inevitably encounters unexpected surprises. We observe clients who partner with us in our “LIVING LIFE” financial planning effort so often experience a “light-bulb”, epiphany moment.
A printer-friendly version of our quarterly newsletter can be obtained here: Q4 Nvest Nsights
Light Bulbs Reveal a “Better Idea”
In 1967 Ford unveiled a “see the light” marketing campaign for its new Mustang. That campaign utilized a light bulb which was turned on to illuminate the room with the new Mustang model. This symbolized how seeing something in a new light can result in an epiphany moment – the message: “Ford has a better idea”, a different approach.
Energizer Bunny Breaks Loose – December Commentary
The Energizer Bunny is the marketing icon and mascot of Energizer brand batteries in North America. It is a pink mechanical toy rabbit wearing sunglasses and blue and black striped flip-flops that beats a bass drum bearing the Energizer logo. The Energizer Bunny advertising tagline is brilliant, “Keeps going and going…” When used as a synonym to describe a person or other object, it means a person who seems to have limitless energy and endurance. Is it appropriate to characterize the stock market rally since March 23 as being like the Energizer Bunny? It appears everything is breaking out. Market strategists indicate this is the broadest rally, both domestic and geographically, since 2013. 93% of the stocks making up the S&P500 are above their 200-day moving average (trend line of the last 200 days). That’s a top decile reading historically. The high reading suggests the market is overbought (high enthusiasm; more on this below), but in fact bodes well for 12-month forward returns being positive. The current market rally “keeps going and going…”
“Life in Perspective: Identifying Your Investment Focus” – November Commentary
Many are asking, “what’s next?” given election stress is ending. Let’s start with a true story.
Kati Metro, 74, was hiking near Phoenix, Arizona when she fell, injuring her face, wrist, and hip. Rescue workers arrived by helicopter, and strapped her to a stretcher. Unfortunately, fierce winds caused one of the lines – intended to stabilize the stretcher and prevent spinning during its lift into the helicopter – to fail. As the horizontal stretcher was pulled upward, it started spinning faster and faster, like the runaway hands of a clock – over 170 rotations during the two minute ascent. Katie survived the ordeal, although she was dizzy for days. As horrifying as the experience was, it’s a bit of an analogy about how a lot of people feel right now. Seeing clearly with “20/20” vision is challenging this year. Too many big and noisy developments continue to alter most everything about daily life; we are fatigued by this yearlong dizzying experience. Identifying your focus is important, particularly in the world of investing.
“Forward Expectations & UNCH” – Nvest Nsights Q3 Newsletter
Investment growth was furiously positive in the six months following the March lows, besting even the same interval of time following the “Great Financial Crisis” of 2008. In “Forward Expectations“, we review that while history shows the forward return pace typically slows, performance remains positive – particularly when looking +6, +12, or +24 months forward. While September reminded investors that challenges in reopening the economy persist amid covid-19, it is also good to recall that the 4th quarter is often the strongest performance season for stocks. That pattern includes election years. Should historical data not be convincing enough, we explain in “UNCH” how fundamentally significant are the “all-in” efforts of governments around the globe to support their economies. One chart monitoring change in Money Supply “may be all one needs to know” over the next few years. We should assume that uncertainty on many fronts will persist; and uncertainty results in volatility. But “Fear of Volatility” reminds investors not to confuse volatility with risk of loss (they are very different); those who do are more prone to make permanently impactful errors when investing.
Also, if interested: The Higher Wages of Growth, provides a review economic stats recently published by the US Census Bureau.
A printer-friendly version of our quarterly newsletter can be obtained here: Q3 Nvest Nsights
Don’t Surrender to Cash
“Forced Perspective” is a technique employing optical illusions to make objects appear closer/farther, or bigger/smaller than they actually are. Filmmakers would for example place a miniature dinosaur close to the camera so that it would look gigantic in the film. Similarly, many tourists at the Leaning Tower of Pisa take a “selfie” with their smartphone camera, making it appear as though they are preventing the structure from toppling. Reflecting on years of experience it is hard to recall a time where it felt like there was more uncertainty than the present. A global pandemic, social unrest, and a polarizing US presidential contest are presently being placed very close to the “camera” by media, creating HUGE worry – a forced perspective. We cannot recall a time where there were not several big worries simultaneously distracting investors. The chart below provides just some past examples.
The Higher Wages of Growth – Review of Recent Economic Stats
In case you missed it as most of the media did, the Wall Street Journal (September 17, 2020) published an article by this title. In essence – “Rising economic growth lifted all classes.” The US Census Bureau reported some interesting personal income statistics:
“Humor Lightens the Load” – September Commentary
Our last monthly commentary “Weird Words About a New Abnormal” attempted to update about the markets and a frequent question on investor’s minds – “After the significant financial market rebound, should I consider becoming more conservative (for various reasons)?” The weird words were entertaining and appropriate for a heavy topical discussion. Let’s take a cute (humorous) route this month. Let’s lighten the load with some humor while discussing the current market action and outlook. The biggest difference in people who demonstrate resilience and those who don’t is their perception – how they conceptualize traumatic or stressful life situations. It’s all the little things that happen in your day-to-day life; how do you perceive them? One way to change bad feelings is via good doses of humor.
“Weird Words About a New Abnormal” – August Commentary
Do you feel a little discombobulated by strange words? If someone is talking lots of gibberish, gobbledygook, and poppycock, they may be trying to discombobulate (verb) you. If you are very discombobulated (adjective), you are also flummoxed. Confused? That’s what these two words mean – “confuse” (19th century words).
Amazingly – time is flying; it is already more than 4 months since a large share of the global economy was mandated to a near-subsistence crawl. While there is evidence of emerging green shoots that suggest the trough levels are past, the persistence of COVID-19 with its related behavioral accommodations dampens reopening the economy and makes for an abnormal jagged experience.