Aug 09 2017
I hope you are enjoying the profitability that stock ownership can provide as global stock indexes continue to reach new highs. Year-to-date most indexes have reached double digit returns, with global indexes providing the most upside.
I believe that the last bear market occurred in 2015-16 when global indexes fell 20% and corporate profits experienced a very mild recession. Over the past year we have been witness to a significant global corporate profit and business cycle recovery. Though many have called this a “Trump Bump,” it should be obvious at this point that the improving global economy and corporate profits cycle has little to do with the US President and more to do with how the business cycle works. The best part of our message today is that we believe that this new bull market has a brighter and longer future than most investors believe.
Corporate profit cycles last years – not months – and this one is in its infancy. Though many investors are in awe that the Dow Jones Industrial Average is over 22,000, they should try to remember that it is simply a number – it was 800 when I started my career! What is more important is the price of the market related to its underlying profitability or “price-to-earnings ratio.” In statistical terms the market is nowhere near overvalued. In fact, there are sectors of the market that still trade at ridiculously inexpensive multiples to earnings – not at all a symptom of a market that is overvalued.
There are many investors who question the future longevity of this market strength – which is another indication that we are far from a market top. However, there is a much larger crowd who seem immune to the old adage, “what goes up must (at some point) come down.” Though we believe that the recent market strength is well justified and has “legs,” we would not advise investing without some tools to manage the risk of this thesis being wrong and to protect your portfolio from catastrophic loss. As you know, we employ our Active Risk Management process specifically for this reason – this includes actively managing your asset allocation, your sector exposure and the careful placement of stop loss orders – the combination of which we call our “plan B.”
I find it hard to believe that today’s investors would invest aggressively without some sort of “plan B” should it all come to a crashing halt. Surely investors must recall the recessions and corresponding stock market declines of 35-55% that have occurred several times in the past two decades? Or the time it took for stocks to recoup those losses – on average six to seven years? I find the short term memory of the average investor just plain astonishing. However, with the media’s attention on passive/robo/index investing, perhaps we can’t blame these naïve investors for getting sucked in! Let’s face it – while markets are going up the tide lifts all ships and your average index fund will participate in market returns. However this view is extremely shortsighted, particularly when it comes to the bulk of an investor’s wealth as they approach important timelines, such as retirement. They say that stock market history is riddled with investors repeating the same mistakes. The lack of some sort of “plan B” risk management appears to be the most obvious.
The increasing popularity of passive/robo/index investing should be a warning to all investors to employ risk management tools and a plan for avoiding catastrophic loss, for the next inevitable and eventual market decline may just be much bigger than expected. In the meantime, continue to invest with an eye towards growth and be well prepared should things go awry. My book can help.
No matter your level of experience, The Journey to Wealth teaches you to invest using a clear, easy-to-follow sequence of concepts. In a four-step process, you will learn how to identify your lifestyle goals for building immediate and long-term wealth, as well as how to invest according to your risk tolerance and needs. Straight-forward detailed explanations, charts and graphs, inspiring citations about wealth creation, and artwork will keep you reading, learning, and creating a SMART investment plan for your future
Jan 19 2017
The book launch party, held on December 2nd, at Servinos in Tiburon was an amazing event. The party allowed guest to make a contribution to Marin Charitable, and was a great success.
A Huge Thank You to James Demmert, who chose Marin Charitable as the beneficiary of all book sales and donations made at the recent book signing event for his uniquely insightful guide to investment success, The Journey to Wealth, at Servino’s in Tiburon! Through James’ generosity, as well as that of the attendees and associated donors, Marin Charitable received $6,650 — 100% of which will be granted to local nonprofits supporting Marin County’s under-served youth!
And a big Thank You to the amazing people at Marin Charitable, giving it back to our community in the best way!
Jan 15 2016
A Huge Thank You to James Demmert, who chose Marin Chartitable as the beneficiary of all book sales and donations made at the recent book signing event for his uniquely insightful guide to investment success, The Journey to Wealth, at Servino’s in Tiburon! Through James’ generosity, as well as that of the attendees and associated donors, Marin Charitable received $6,650 — 100% of which will be granted to local nonprofits supporting Marin County’s under-served youth!
WOW! Thank you for our copy of The Journey to Wealth. So glad you have held our hand through the 4-step process of SMART investing! The book layout and design is very inviting—love the gold metallic graphics, black and white photos, and the use of white space. Well Done!!
Jean and Mike
Thank you so much for your book. Started to read it and it has some great advice and education. You should be very proud to be able to write a book, it must be a herculean task. Again congratulation on the book and thanks for sending one.
I seriously enjoyed your well-written, well-designed and very thorough “Journey to Wealth”. Thank you for sending it
It was a nice surprise to receive your new book, a few days ago. It looks grand! I am sure it contains a wealth of knowledge. Thanks for thinking of us.
Nancy and Tom
Thanks so much for a copy of your book. I hope it becomes a best seller. I will give it a read.
Larry and Susan
Just returned home after a few days out of town and received your book. Looking forward to the read. Congratulations to you on the book, it certainly appears to be a first class publication! Thanks again, hoping your team and family have a safe and happy Holiday Season!
James – a personal note of thanks for sending us your recent book. It’s a solid read, supported by good statistical information. The chapters including “How to Pick Stocks” and the one on Stop Loss Orders should be clear differentiators on your approach to managing customer portfolios and protecting assets. (BTW – I missed the part on the importance of Standard Deviations relative to ultimate RORs.;D)
In one of our Review meetings, you and I discussed the perception that your practices may lag trends on market rebounds. Now may be a good example – (spoken like a true Monday Morning Quarterback – eh?). In our own “portfolios – we still are also – a bit overweight in cash – but may need some of that for other investment opportunities. Further, as I get closer to retirement, “preservation” leanings are more appropriate.
Sorry we missed the book signing – and thank you again for including Julie and I on distribution of your book. It’s a nice early Christmas present.
Our best to you, staff and family.
Lynne and I finally were able to complete your Wealth Planning documents! After reading James’ new book, I was inspired to do the work. I will drop the documents by your office early this week. We look forward to your analysis. Please let me know if you have questions once you receive the packet. There are a few quirks that needed explanation so I decided to do the printed version, rather than online.
Robin and Lynne
Miriam read James’s book cover to cover this weekend! She called to congratulate and applaud James. She thought the book was very clear, concise and easy to read. She also mentioned that she was very happy to be a client of James!!!