Markets Continue to Advance
Perhaps surprisingly, investment markets continued their
strong performance though the first quarter of 2011.
Investors’ confidence in improving economic fundamentals
have outweighed a series of traumatic events that, in a
different climate like that of late 2008 or early 2009, could
have produced very sharp downturns.
Results, however, were not uniform. Emerging markets were
just barely positive while small cap stocks continued their “best
in class” equity performance again this quarter, outstripped
only by the uniquely strong commodities results.
And, the ride wasn’t smooth. Following a relatively flat January,
early February saw strong rallies, only to fall sharply as the
Japanese earthquake, tsunami, and nuclear reactor disasters
rocked markets around the world, but particularly in Japan
and elsewhere in Asia. But then March resumed the advance,
despite slow resolution to the perceived dangers of nuclear
radiation from Japan and the increasing violence in Libya and
other areas where regime change is in the air.
So, despite what might be a once in a lifetime political and social
transformation now playing out in oil-rich North Africa and the
Middle East, despite continuing risks to the stability of the euro
as Portugal follows Greece and Ireland to sovereign debt rescues,
and despite the considerable uncertainty about the willingness
of the US Government to seriously address its own deficit
problems…despite all this, markets now seem focused on the
accelerating underlying economic recovery. Corporate profits are
strong, the job market is improving, and consumer spending is
increasing. In some respects then, this first quarter of 2011 may be
a microcosm of a lifetime of investment experience: aggregate,
long-term performance reflecting what growth does occur in the
underlying economy, punctuated by unexpected and sometimes
deeply troubling threats along the way. Broadly diversified, global
investment strategies continued to serve Aspiriant clients well
this quarter. A similarly perseverant approach to very long-term
investment strategies should continue those rewards.
In the articles to follow, our Chief Investment Officer, Jason
Thomas, and our Director of Real Estate Research, Lauren
Pressman, comment in further detail about the current
investment climate and the special role that real estate and other
“real assets” can play in client portfolios. Brett Gookin shares
insights for an increasingly relevant concern that faces our clients
as they and their parents age. And Kacy Gott, our Chief Planning
Officer, reminds us of the possible second chapter for the Roth
conversion activity many Aspiriant clients undertook in 2010.
As we get deeper into 2011, we’ll be commenting further
on other tax and wealth planning issues, especially regarding
taking advantage of the current estate and gift tax allowances.
We look forward to discussing all of these matters, and more,
with our clients as the year progresses
Tim Kochis, JD, MBA, CFP® Editor
Director - New Business Lines, Chairman of the Board, Principal