1-520-327-1019 info@wellspringfp.com

Interconnectedness

  In January 2016, we experienced the worst 10 day start of the stock market since 1897.  I’m an economics history guy and that’s saying something.  If not for the 396 point comeback on the last day of the month, the Dow decline of 5.5% would have looked a lot worse. In the  November 2015 newsletter  we talked about the formation and the independence of the US stock market.  In this letter, I want to talk about the interdependence…

Read More >

Patience Not Patients

The reality is this; When our Creator was giving out gifts and talents, h/she provided us many, but patience was most assuredly not one of them. Thus let us begin this letter with my exhortation to you to learn a hard lesson from us; Patience in financial markets is what will keep you from being a wounded patient due to them. You invest to make money; that’s one of our primary jobs for you.  So that we don’t conveniently…

Read More >

Worldly Matters

  ‘World politics matter’ a statement to which you naturally respond “No (kidding), Sherlock”.  This monthly communication is to state that world financial systems also matter, and to give you semblance of how lucky the United States is in that regard.  However, there are a few things we need to keep on the back of our minds and hopefully on the forefront of Washington policy. Low interest rates exist in many places around the world.  They exist here as…

Read More >

Living and Learning

  This will cover three events, all very different in their base topic but collectively germane as to how financial markets work. First, unless you are Rip Van Winkle, you will recall the great turmoil expressed by economists over the pending damage the Central Bank would unleash on the markets if interest rates were raised in their September FOMC (Federal Open Market Committee) meeting.   Such an increase, it was argued, was ‘too soon’, and ability of companies to pay…

Read More >

Looking Fear in the Face

  “When in the Course of human events, it becomes necessary for one people to dissolve….” We normally write this letter toward the beginning of the month, but given the large volatility in the markets of late, we thought it potentially beneficial to move it forward a week or so.  As the opening line indicates, directly and indirectly, there will be two groups of people that will appear in the next days; Those who view the markets as totally…

Read More >

Controlled Illusion

  When in the annals of finance we see people trying to usurp historically held ‘facts’, we should pay attention to see if something has indeed changed.  New knowledge is almost always good, though blindly seeking it without logical thought commonly leads to the misleading sentiment of investors (whose quote is attributed to the paragon of finance, Sir John Templeton, who said); “The four most expensive words in the English language are ‘this time it’s different”. Alas, far more…

Read More >

Best and Worst

The primary message this month; Some things go well, and some go poorly.   Sure, big deal, that’s life you say.  However, and VERY IMPORTANT, before you can intelligently judge if something is going well or poorly you have to take the emotion out of a subject and deal with the truth.  You must have an objective benchmark.  These days we’re finding that the truth is being conveniently interpreted in too many corners of the world, and that makes subjective…

Read More >

No Free Lunch

  You know the old adage; “There ain’t no such thing as a free lunch”?  Well, it is true in the world of economics as much as in any other context, and commonly the quote is attributed to the great economist Milton Friedman.  We’re going to talk a little bit about that quip this month so you have some perspective and appreciation for how it plays out in your investments. The alluring ‘lunch’ in regards to investments can be…

Read More >

Always Tradeoffs

  Inflation is a beast we want to mostly keep in his cage.  Some of us remember the remarkable days of the 1980’s when inflation was dropping the purchasing value of our savings in the bank by 10-12% per year.  That was ‘too hot’. More recently, though happening in Japan for the last 15 years, is the other side of the coin called deflation.  In this scenario, your money buys more a year from now than it does now. …

Read More >

Pass Over

  It ‘tis the season…no, not that one, the other one.  Therefore, let’s talk about a little history but do so from the financial side vs. the religious one. We’ve said over and over to you that markets go up and down. That motion is volatility.  It is NOT risk, as conventionally defined.  If a particular investment that an investor was holding goes to zero and all your money was in it, that’s a true definition of risk.  Of…

Read More >