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Forecasting The Stock Market: A Fool’s Game

It’s that time of year again. We are entering the season of vacations, family reunions, boating, fishing, golf and everything else that makes summer time one of the best times of the year. We are also entering the summer doldrums in the stock market where volatility seems to always rear its head. Almost every summer the end of the world occurs. Last summer it was Brexit. It was going to destroy Europe. The summer of 2015 it happened in August when China’s growth was over, and the country’s progress into a developed market was over. The forecasts that come out generally discuss the stock markets bull run ending, the economy going into a recession and gold becoming the best investment possible. At this point in time, when this volatility occurs, you will also be email bombed or receive some other type of advertising from newsletter writers all predicting “the end”.
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Categories: Strategy.

If You Fail to Plan, You Plan to Fail

What a glorious time to be invested in the stock market! The market has rallied 14% since the election on Nov. 4, the major indexes have rallied to hit all-time highs. We are far from the “euphoria” that Sir John Templeton discusses as being the end of a bull market. Despite all the good news, it’s impossible to know with certainty when it will come to a screeching halt. The hardest thing to do—we may even call it impossible—is time the market consistently. Someone may get luck once, or maybe even twice, but to time it again and again is a fool’s errand. At Iron Gate Global Advisors, we have what we call a “Bear Market Game Plan.” It’s part of our process that we implement when that Bear Market rears its ugly head. Below are a few of the characteristics of our plan. Know when to sell your stocks:
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Categories: Markets, Personal Finance, and Strategy.

Value Investing The Right Way: Four Keys To Buying a Stock

For the past twenty years, we have been perfecting the science of picking stocks. Since the early days of our firm, our methodology has improved dramatically and continues to do so every year. Like every investor, when we first started in this industry we searched and searched for the one “system” that would produce the results we were looking for. The easier this system, the better for us and our clients. In our attempt to find a single system, we learned one thing: there is no easy, simple, or ultimate system. In fact, we learned that the work that needed to be done to analyze a stock was long and exhausting . . . but well worth it. What we have deduced, however, is that there are four keys every stock investment should have. We did not invent these four things. They are core principles that investors, including Warren Buffett,
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Categories: Markets and Strategy.

The Next Apocalypse: Or What The Media Wants You to Believe

This month’s market commentary video is chalk full of fun topics at the top of everyone’s mind. Like: After this bull run is the market cheap or expensive? Should I invest now or hold back? How do I deal with the (next) apocalypse the media is touting? As always we have an Iron Gate perspective that I believe you’ll appreciate. Enjoy the video. What We’re Reading You’re not as good an Investor as you think you are: In celebration of the Bull Market’s 8th birthday, one of our favorite writers, Jason Zweig, discusses how psychology can wreak havoc on investors as they try to go at it alone. The Downfall of the Popular IPO: With Snapchat going public this week, we’ve heard a TON about IPOs. In fact, I was on the ski lift and the ski instructor started talking about Snap’s IPO! Uh oh! Here’s a great article by
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Categories: Market Commentary, Markets, and Strategy.

Buffett’s Hedge Fund Bet: How Iron Gate Compares

Every spring, Warren Buffett releases his annual letter to shareholders. The wisdom that Warren Buffett gives, and the simple way he gives it, has made his annual letter one of the most widely read documents dealing with investing and the markets. At Iron Gate Global, it’s certainly one of our favorite annual letters, and this year was no exception. Proper capital allocation, the good and the bad about companies buying back shares, how great America as a country is, and the importance of low-fees were among the several topics Buffett discussed this year. However, one topic that stood out to me was his update to the big Buffett bet. In Buffett’s own words, he describes the bet: In Berkshire’s 2005 annual report, I argued that active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat
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Categories: Markets and Strategy.

Market Commentary: Inaugural Year Lessons and What You Should Be Doing

It’s once again time for our monthly Market Commentary and I am discussing three things that anyone with any money invested anywhere should be considering. They are: Lessons learned from the transition of Presidential power as it affects the markets; The way to approach hitting the eighth year of a bull market; and What to expect this year along with the “must dos” for any investor right now I know there are all kinds of expectations for the market in the coming year. We hope you’ll approach this year as any: with deliberate, probability-based decision making that removes emotion and optimizes your potential. What We’re Reading Buffett Bought $12 Billion of Stock From Election Through Friday. We LOVE this story. It’s the perfect example of not letting politics get in the way of sound investing. We discuss this more in the market commentary video. What a great example for us
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Categories: Market Commentary, Markets, and Strategy.

A Simple Portfolio Strategy for the Trump Presidency

Over the last few weeks, and seemingly every time I look at the news, I see articles that are trying to forecast whether President Trump will be good or bad for the stock market. Here are a few examples: “The Trump Factor: Should Investors be Bullish or Bearish?” (Marketwatch) “With Donald Trump as President, Here’s What Will Happen to the U.S. Economy” (The Street) “How Donald Trump’s Presidency Will Affect the Stock Market” (Forbes) And, my personal favorite, the potential development of “Trump ETFs” being discussed at this week’s Inside ETF conference. If I’m being completely honest, here’s how I feel: I can’t take this nonsense anymore! And that’s putting it lightly. Nobody can be certain what is going to happen to the stock market, and this early on, these types of forecasts are a waste of time. Their purpose is to generate clicks, not to spread information. That said,
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Categories: Markets and Strategy.

Lack of Liquidity Can Be An Opportunity: A Look At Private Markets

Please join us for our webcast overview of Private Markets and how they might fit in your portfolio. For the last several years, I’ve been studying the world’s ultra-wealthy. I’ve studied not only their habits, but also their investments. Where do they invest? What do they invest in? How do they decide what is a good investment and what is not? Risk, returns—the whole enchilada. The one thing that I have found is that most of their investments are non-liquid, and are heavily concentrated in private investments. Before I go on, you must understand two things: 1) liquidity and 2) private investments. 1) Liquidity – This is the ability to easily sell your investment and receive cash for it. The faster you’re able to sell and receive cash, the more liquid the investment. 2) Private Investment – This is any investment that isn’t publicly traded on an exchange. Think about
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Categories: Strategy.

What Can You Learn From the Rearview Mirror of 2016?

We’re coming to the end of another wild year. In January, the markets recorded the worst start to any year in history . . . and now we’re floating towards DOW 20,000. Just a crazy roller coaster ride! Regardless of how the year goes, whether the markets are up substantially or down, an important exercise that every money manager should go through is a self-evaluation. This includes asking yourself the questions, what did I do well? What mistakes did I make? What would I do different? Were my mistakes emotional or something else? Jason Zweig of the Wall Street Journal said the following regarding self-evaluation. Evaluating yourself honestly is at least as important as evaluating your investments accurately. If you don’t force yourself to learn your limits as an investor, then it doesn’t matter how much you learn about the markets: Your emotions will be your undoing. This whole idea
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Categories: Personal Finance and Strategy.

Myth Busting: Stop Losses are a great tool for investors

One of the best phrases in the market today is a “stop loss.” Think about that . . . who wouldn’t want to stop losing? No one! However, I will tell you from experience, the only thing a stop loss does is stops you from making money! In fact, I’ve talked with several people in the last week that have experienced the very things I discuss in this email. It’s got me so fired up, it deserves to be this week’s content. Let’s start with the basics . . . For those unaware, a stop loss is an order that you can enter with a brokerage saying that you would like to sell a stock (or option) at a certain price. For example, let’s say that you just bought XYZ stock. You’re really excited about the investment BUT you definitely don’t want to lose money after you buy it (who
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Categories: Personal Finance and Strategy.