Friday, March 29, 2013

My Quarter End: Q1 2013

I must say that I am thoroughly excited for this quarter end. Numbers aside, I’ve been looking forward to writing this piece and putting my nerd hat back on. A lot of my posts this past quarter have been more personal than in the past and it’s nice once in a while to geek out once in a while with market assessments. So let’s get to it.

This past quarter was one of the best I’ve seen during my five year investing history. The DOW pretty much shot through the roof and made me look absolutely stupid in the process J. I expected the results of the US fiscal cliff would sink the market, but the market’s strength and resilience against the recklessness in Washington absolutely amazed me. In general there was some M&A action, ongoing government inefficiency, some stagnant job reports and a slight uptick in consumer confidence.  So in my humble opinion news headlines did not drive the market up. I genuinely feel that this uptick in market valuations is indeed genuine. As our politicians squabble and our citizens are choosing whether or not to change their family trees, I believe that by and large, U.S. companies are positioning themselves in the strongest way possible to plan long term growth and sustain the short term uncertainty surrounding our current economic environment. To me that is the fundamental basis for the S&P and DOW being at/near record level highs.

But at the end of the day you are probably asking yourself what does it all mean and where is the market going? I expect that with the modest uptick in consumer confidence and what should be a steady earnings reporting season that the start of Q2 should see an uptick in value across the broad market. But beyond that I see a pullback by the time the summer season starts. Not because the market is overvalued, but because over the history of the market two things are generally guaranteed during the summer months: low trading volume and a marginal decline in value. It’s just what has come with the territory historically.

So for investors like me that invest for the long term you probably already know what I’m going to say. Over the next decade the market will continue to gain in value and the sky is not going to cave in on itself. I am continuing to steadily invest in my small army of mutual funds every month without a second thought. Steady investing in solid investments over a long period of time will always keep your money ahead of taxes and inflation. But for the short term, as with the fiscal cliff fiasco, I have no clue where it’s going to go. I do know that the market will go up and it will go down. But over long periods of time the market grows more than it retracts, that’s just what history has shown us. So I beg you, if you know of anyone that tries to time the market or is looking for a short term gain through investing, pass to them these immortal words from Dave Ramsey, “The only people who get hurt on a rollercoaster, are the ones that jump off.”

As for me, well this past quarter was surprisingly prosperous for us as we crossed the $300,000 mark to land our Q1 2013 net worth total at $304,339.06. I say surprisingly because this past quarter our household gave away more money than we ever have within any single quarter. And looking back on it I have to honestly say that these gifts were some of the best decisions I think I have ever made with money. We gave meaningful gifts that I think impacted and helped individuals and families change their lives, and we genuinely feel that our church is being a wonderful steward of the resources provided by the congregation. In return I personally felt an overwhelming sense of peace and love that even my best mutual fund couldn’t out earn. Frankly I’m surprised and amazed at how creative we’ve been when it comes to finding ways to give. But I am finding myself speechless at describing how our net worth increased by that much with all of this giving going on. As a Christian I believe that when you give you will receive love and peace in your heart, but I kind of didn’t really believe that I would prosper financially through giving, so I guess this past quarter was God’s way of proving it to me.

Q1 was indeed an excellent start to 2013 and the methods to my madness will remain the same as I roll on towards $1 million. So happy reading and merry Q2 to everyone out there! 

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