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

Next Article