Author name: adminalison

Ninety-three year old Buffett, who knows a thing or two about successful  investing, is not suggesting you cannot ever lose money – but he is emphasizing the mindset investors should possess.

It is gratifying to find winning investments. And winning periods are always welcome. But for all of the winners there are also an awful lot of losing investments. Over time, avoiding the losers (and losing years) could help you in achieving your financial objectives. Let’s follow some threads…

Read the Autumn 2023 Advisor

Are we experiencing a market regime change?

Across the West, sovereign debt levels were last this high eighty years ago; back then the US Dollar replaced Sterling as the primary reserve currency. Inflation was last this high forty years ago; then governments retreated from interfering in their economies. Interest rates were last this high fifteen years ago; then the sub-prime mortgage bubble burst. In all of these cases, change arrived gradually, then suddenly.

The focus these days on interest rates is understandable, but what the US Federal Reserve is doing needs to be understood in the context of the most leveraged American economy in history. The damage that the Fed and its monetary policy experiment (zero interest rates & quantitative easing) has inflicted on the American economy is incalculable. 

Read the Summer 2023 Advisor

In the field of chaos mathematics, a sudden, critical change is known as bifurcation – the point at which a small change causes an entire system to shift from stable to unstable.

That’s what happened with America’s Silicon Valley Bank (SIVB) in March. The global financial system was relatively stable until SIVB made a minor announcement that they had sold some government Treasury bonds at a loss. Suddenly markets shifted into chaos. The banking turmoil spread across America with the loss of two other regional banks and over to Europe with the “take under” of the 167 year-old Credit Suisse, a “systemically important financial institution”, and with the share price woes of another SIFI, Deutsche Bank. Governments around the world pumped liquidity into their banking systems in the hopes of stabilizing an increasingly chaotic situation. That small change starting with SIVB led to significant instability.

Read the Spring 2023 Advisor

Welcome to the age of dearer money.

Thanks to resurgent inflation, the US Federal Reserve has raised interest rates more aggressively than at any time since the 1980s, dragging along other central banks in its wake.

Investors must transition this regime change to one of higher interest rates and scarcer capital. Adaptation may not be easy, but taking the long view could help. The new regime has history on its side; it was the era of cheap money that was so out of the ordinary.

Read the Winter 2022 Advisor