Below is an excerpt from our latest WJ Notes newsletter. The full piece examines how inflation affects stocks, bonds and alternatives as well as our own positioning in those asset classes.  Stocks Stocks are always more complicated to predict than bonds. There are several factors to consider when predicting how they will perform during a period of inflation. What were the valuations going into... READ MORE

Recently we wrote a blog covering the signs of inflation we are currently experiencing and defining the type of inflation this could ultimately lead to. All of that is summed up here. This WJ Notes is the Part II to the blog and is going to cover how inflation will ultimately affect the portfolio, and what we can do about it. We recommend reading the first part in order to have a better... READ MORE

Although most of the focus has been on stocks lately, it is bonds that have arguably had the more interesting year. Interest rates (which we will use the 10-year treasury yield to represent) have been climbing rapidly, starting the year from about 0.9% to 1.52% today. This often neglected number is extremely important. It represents the cost of money. Where the 10-year rate sits influences the... READ MORE

As 2020 winds to a close, you will notice the typical barrage of articles being sent out explaining what happened this year and predicting what’s going to happen next year. Typically, it’s best to ignore these as just noise (Spoiler alert: none of the end of year 2019 articles had pandemic on the prediction list). However, the end of the year does provide a good opportunity to reflect on what... READ MORE

In almost any portfolio, for investors large and small, there are two primary parts. There is the side that should grow (almost always stocks), and there is the counterbalance that should give the portfolio safety (almost always bonds). This has been a fantastic strategy, especially for the last 40 years or so. So much so that any advice to stray from this balanced approach is often thought to be... READ MORE

Another decade came to a close last year. I thought it would be interesting to compare the last decade to the previous four decades. The table below shows returns for 5 primary asset classes and a globally balanced 60% stock/40% bond portfolio. For each decade the highest returning asset class is at the top while the lowest returning is at the bottom. A few observations: Stock returns across... READ MORE