It Is All About Perspective

Oct 30, 2018 | Markets

“Some People See The Glass Half Full. Others See It Half Empty.  I See A Glass That’s Twice As Big As It Needs To Be.”

― George Carlin

Given the option of investing in one of the below performance charts over the last 10 years, which represents a better investment return?

 

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The bottom chart represents the cumulative growth of the S&P 500 Index over the last 10 years ended 10/23/2018. The top chart represents the daily investment returns (positive or negative) of the S&P 500 Index over the same time frame.  It’s the same investment but viewed from a different perspective. Obtaining the right conclusion is a matter of perspective. The difference between the two charts could be explained as market noise which can affect short term returns but eventually gets smoothed out over time.

Much has been speculated and written about the potential causes of the recent stock market volatility this year (as measured by among others, the S&P 500 Index price & dividend returns, WSJ posted figures).

·         Rising Interest Rates

·         Inflation fears

·         Strong Economic Growth

·         China and tariff trade wars

·         The bull market run has gone on too long

·         Over valuations

·         Political bickering

·         More sellers than buyers

 

The one constant in the world, as it applies to investing, is that volatility is here to stay no matter how dire or how good the newsOur focus for our clients is to keep an eye on the long term and not get hung up on short term gyrations in the market, no matter the cause.  We believe near-term volatility is normal market noise and will normalize over time.

In the end, it’s all about perspective.  In our view, tying back to George Carlin’s quote, no matter how large or small, perceived emptiness or fullness, we don’t want to waste a glass by getting distracted by all the short-term market noise. We believe our asset allocation strategy is a sound approach through these volatile periods.

Portfolio Update

The recent volatility has forced us to make some changes in our portfolio mix that we would be happy to discuss with you. Forward looking – we are watching the asset allocation as we approach year end for a possible rebalance opportunity as well as tax harvesting opportunities as they present themselves.

Office Update

We officially moved into our new suite at the Lincoln Center on June 15th.

Our address is:

Lincoln Center Tower
10260 SW Greenburg Rd.
Suite 1055
Portland, OR 97223

Our office building is the tallest (12 story) building in Lincoln Center, so it should be easy to recognize.  I have attached a photo taken from our office of the wonderful fall colors.  We look forward to seeing you soon.

Our Mariya Brannon has just earned her Financial Paraplanner Qualified Professional (FPQP) designation earned through the College of Financial Planning.  Mariya is a very important member of The Opsahl Group and we want to recognize her for her hard work and success.

WHAT IS A FINANCIAL PARAPLANNER QUALIFIED PROFESSIONAL TM DESIGNATION?

Individuals who hold the Financial Paraplanner Qualified Professional TM, FPQP TM designation have completed a six-month long course of study encompassing the financial planning process, the five disciplines of financial planning, general financial planning concepts & terminology and product categories.

Additionally, individuals must pass an end-of-course examination that tests their ability to synthesize complex concepts and apply theoretical concepts to real-life situations.

OUR FPQP TM PROFESSIONALS MEET THE FOLLOWING STANDARDS:

·         Education – Designees renew their FPQP TM mark every two-years by completing at least 16 hours of continuing education.

·         Adherence to Standards – All designees have agreed to adhere to Standards of Professional Conduct as outlined by the College for Financial Planning and must reaffirm compliance biannually.

Financial Paraplanner Qualified Professional TM and FPQP TM are trademarks or registered service marks of the College for Financial Planning in the United States and/or other countries.

Sources: Information used for the performance charts was obtained from historical market data on Yahoo Finance.

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De[fi]ned Wealth Management is a unique and modern full-service independent wealth management firm and fiduciary. We work with clients so they can discover, plan, manage and achieve their financial independence.

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