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.

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Still Room for More Good Performance

For investors looking for reasons to be optimistic, the first quarter started off well. The US economy seemed to have finally put the financial crisis into the past and Europe’s sovereign-debt crisis seemed less acute. Investors responded by moving out of money market funds and into equities. Their primary concern was that emerging economies would grow too quickly, pushing up commodity prices and allowing inflation to take hold in their domestic economies. read more

From the CEO

This was a very strong quarter for the clients of Aspiriant. Despite severe geopolitical unrest in North Africa and the Middle East and an unprecedented sequence of disasters in Japan, the world’s underlying economy continued to gain momentum and markets accordingly produced excellent returns for the quarter. While many obvious threats remain and we’ve been reminded, yet again, that we must “expect” threats that are unexpected, we believe that our clients will continue to be rewarded by perseverance in their long-term investment strategies. It’s a much longer perspective than one quarter, of course, but it’s gratifying to see clients being rewarded for that perseverance as we move deeper into 2011. read more

Real Estate...An Inflation Hedge?

Allocation to real assets can play an important role in a longterm investment portfolio and, in particular, as a hedge against inflation risk.

Assets that are tangible or physical in nature encompass a wide range of investment strategies whose values are sensitive to inflation. Examples of real assets represented in Aspiriant portfolios include real estate and commodities. Commodities were added to Aspiriant portfolios several years ago in particular to provide significant and unique protection against inflation. Similarly, real estate has demonstrated that it is a good, albeit partial hedge against inflation. The reasons why are fairly simple. read more

Roth IRA Recharacterizations

American taxpayers in general (and our clients in particular) have been encouraged to defer tax as long as possible. Since Roth IRAs have the same investment risk as other vehicles, those who chose to convert, and pay tax on, some or all of a traditional IRA are at risk of the value declining by the time tax on the conversion is due, owing tax on values that were higher than now.

To avoid this potential regret, Congress created an escape clause which is known as “recharacterization”. Taxpayers can choose to recharacterize, basically undoing the Roth IRA conversion, until mid-October of the year following the conversion (the final deadline to file returns). read more

Making Life Better for Older Adults

As we age, there comes a time when we may need assistance making it safely through the day. Perhaps you have a nagging suspicion that an older adult (a spouse, your parents…) needs that help right now. Of course, you want to avoid being forced to confront a crisis where an older adult has deteriorated, physically and/or mentally, to the point where they are a danger to themselves or others. What can you do to plan ahead? read more