• Bill Bullock

2017 First Quarter

“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” – Peter Lynch, retired Fidelity Magellan fund manager.


We did not make any portfolio changes when Trump became president and I am glad we didn’t. I remember reading several predictions prior to the presidential election where pundits predicted that a Hillary Clinton “establishment” win would boost the stock market due to her coziness to the hedge fund community on Wall Street while Donald Trump’s unpredictable populism would send the market down 10%. While we are far from the end of the Trump presidency, the stock market ride to this point has been remarkable.


With all of that said, I remain cautious looking forward. With the stock market near its all-time high, I would ask that you contact us if you have any major cash needs in the foreseeable future – now is the time to take those dollars off of the table. While I continue to believe the stock market will provide us with decent bond-beating returns (on average) over the long-haul, I also believe near-term volatility will increase. Moreover, Katie and I will be reviewing portfolios to make sure you are within 5% of our target asset allocation. If your equity allocation is over 5% from our target, we will most likely give your portfolio a “trim” in the next several weeks.


Did you hear the news? Charles Schwab and Co., Inc. has reduced their commission rate from $8.95 to $4.95 when we purchase individual stocks and exchange traded funds (ETF’s)!* Do you remember the days in the 1970’s when commissions were hundreds of dollars? Trading is becoming cheaper and that is a good thing for all investors. More importantly for us, Schwab has announced that they are lowering the expense ratios on some of their index funds, one of which is our largest holding: Schwab Total Stock Market (SWTSX). Schwab lowered this fee from an already low 0.09% or 9 basis points to 0.03% or 3 basis points. This rate matches Schwab’s ETF equivalent and will save us a nice chunk of change every single year we hold it. It also makes me feel good that we are invested in the lowest-cost total stock market index fund available – anywhere! I don’t often talk about Schwab in my quarter-end letters, but in this case I could not resist relaying the good news.

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