Tag Archives: investing

Opportunity Cost

Investing can be stressful, however with financial science as a “north star” it becomes sustainable and palatable provided that one is optimistic and believes that on average, progress is made (albeit slowly at times).

The hard part comes in constructing a well-diversified portfolio that you can live with through good times and challenging times. Markets reward those who are patient, but the patient must endure difficult times to get the higher returns than bond/cash alone have to offer. This is why equities have had higher returns — because equity owners have been compensated for the risk/uncomfortableness that is associated with equity investing. 

A globally diversified equity solution along with bonds and cash can increase your wealth. The important point is, let the power of markets help you!!!

We can only help people who want to be helped. A lot of people come to us and say, “Hey, I want to make some money,” but they put up all these hurdles, like “I never want to have a down, losing month, so I don’t want any volatility.” In order to help somebody, they have to accept the fact that there will be volatility or price fluctuation.

There will be storms. But that is the nature of investing, and that is why we act on financial science. Everything else people see or read about in the headlines is information that has been priced into the markets. People put up these hurdles for themselves to avoid uneasiness, so we try and help people overcome this through the science of financial investing.

To be a successful investor, most people need constant coaching. They need a temperament of believing that, in aggregate, with seven billion people on Earth working hard to make lives better, make money or starting businesses, progress will be made. 

We can show people graphs and charts, but what happens is they’ll look at a chart in the 1930s or ’40s, or whatever, and then say, “Oh, I could live through that,” but living through it in real time is very different than looking at a chart. 

Rather than looking at charts, look back in history and think about how people lived a hundred or a thousand years ago. Since progress is continuing to be made on technology, social issues, and/ or humanities, then you could reason that progress will continue.

Be optimistic, and use financial science as your guide to navigating global markets for your benefit!

Jeff Holland headshot

Jeff Holland | VIAIV

Stocks are Made for This Moment

Three dimensional render of a pile of books that make up the word FINANCE

Inflation is on everyone’s mind. Unfortunately, we do not know when inflation will peak — so all we can do is prepare.

I think one’s natural inclination is to run for protection when inflation starts to rise. But there’s nowhere to hide that’s really comfortable because inflation will slowly eat away at cash and cash holdings will lose value. Bonds, while they are an essential component of portfolios, are actually less attractive in an environment of inflation. Stocks may be volatile, but they’re uniquely suited for the times we are in. But of course, when we say stocks we mean a globally diversified portfolio and time to let equities work for you.

People are sometimes uncomfortable that stocks are “lumpy” —  meaning most returns come in short periods of time. Yet, time after time, the value of a globally diversified portfolio of stocks has stayed two steps ahead of inflation. 

The quest for immediate gratification is ubiquitous, and it’s a shame because that’s not the way the world works. With stocks, the returns often come in short periods of time and you usually don’t know when. You have to be in the “market” at all times to capture these returns.

I think the conclusion for me for inflation is there’s not much you can do about it, but you can protect yourself from it by embracing a diversified portfolio of stocks, bonds, cash; the right mix with value stocks. And I think that’s a way to mitigate inflation. I think you have to remember that we have had approximately 3% inflation over time, yet returns of a globally diversified portfolio have exceeded that by a large margin in the past. The way we can live with uncertainty is by knowing our stock market history well.

I think the takeaway is that inflation is a mindset. It’s people stepping out of their normal mindsets and beginning to panic/hoard. I would encourage people to listen, take a deep breath, and try to do the right thing, which clearly in our mind, is to embrace a globally diversified portfolio of stocks and bonds and execute that plan as soon as possible. Having been professional market participants our whole careers, we are really good at being patient. We’ve seen booms and busts, and one thing we’ve learned is to trust market prices. Let the market be your friend. It can be enormously rewarding if you can stay invested during the inevitable times of uncertainty.

Jeff Holland headshot

Jeff Holland | VIAIV

Is the Market TOO High?

Is the Market TOO High? by Jeff Holland{1:45 minutes to read} The market is a giant processing machine that sets prices by aggregating information from investors around the globe. Future, unknown news is what ultimately moves the market; therefore, the only way the market can be viewed as “too high” is with hindsight. We as people make new highs every day in our lives (our age).

Headline markets like the S&P or Dow Jones may appear too high—but really aren’t when viewed in the context of a diversified global portfolio.  

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Speculating and Investing are Two Different Things: Beware of Cryptocurrencies

Speculating and Investing are Two Different Things: Beware of Cryptocurrencies by Jeff Holland

{3 minutes to read} It’s a strange phenomenon that people want to chase an investment after it has gone up—it can be hard to resist jumping on the bandwagon.

In general, the global stock markets have gone up nicely in the last few  years—however, cryptocurrencies have exploded in value. Relatively new cryptocurrencies, like Bitcoin or Ethereum, have gone up in price in the last three to six months resulting in hype and interest from investors.

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